Tim Sweeney on EGS' Impact [Jun 26, 2019, 11:18 am ET] – Share – Viewing Comments
A lengthy
series
of tweets from Tim Sweeney looks to address some of the concerns gamers have
expressed over Epic Games Store exclusives and other issues:
This question gets to the core of Epic’s strategy for competing with dominant storefronts. We believe exclusives are the only strategy that will change the 70/30 status quo at a large enough scale to permanently affect the whole game industry.
For example, after years of great work by independent stores (excluding big publishers like EA-Activision-Ubi), none seem to have reached 5% of Steam’s scale. Nearly all have more features than Epic; and the ability to discount games is limited by various external pressures.
This leads to the strategy of exclusives which, though unpopular with dedicated Steam gamers, do work, as established by the major publisher storefronts and by the key Epic Games store releases compared to their former Steam revenue projections and their actual console sales.
In judging whether a disruptive move like this is reasonable in gaming, I suggest considering two questions: Is the solution proportionate to the problem it addresses, and are gamers likely benefit from the end goal if it’s ultimately achieved?
The 30% store tax usually exceeds the entire profits of the developer who built the game that’s sold. This is a disastrous situation for developers and publishers alike, so I believe the strategy of exclusives is proportionate to the problem.
If the Epic strategy either succeeds in building a second major storefront for PC games with an 88/12 revenue split, or even just leads other stores to significantly improve their terms, the result will be a major wave of reinvestment in game development and a lowering of costs.
Will the resulting 18% increase in developer and publisher revenue benefit gamers? Such gains are generally split among (1) reinvestment, (2) profit, and (3) price reduction. The more games are competing with each other, the more likely the proceeds are to go to (1) and (3).
So I believe this approach passes the test of ultimately benefitting gamers after game storefronts have rebalanced and developers have reinvested more of their fruits of their labor into creation rather than taxation.
Of course, there are LOTS of challenges along the way, and Epic is fully committed to solving all problems that arise for gamers are for our partners as the Epic Games store grows.
El Pit wrote on Jun 26, 2019, 13:21:Beamer wrote on Jun 26, 2019, 13:18:Bumpy wrote on Jun 26, 2019, 13:01:Fion wrote on Jun 26, 2019, 12:43:
The moment games start selling for $45 on EGS, while they are $60 everywhere else - because EGS takes a smaller piece of the pie - is the moment I'll believe any of this bullshit and install the software.
QFT.
What if, instead of lowering the price, they increase the budget for the game, resulting in a game that has some combination of more content, fewer bugs, better graphics, etc.? Or they make no changes but they reduce the break-even volume, and therefore the game is more likely to be considered a success and be supported longer, get more DLC, and be more likely to get a sequel?
Would that make you happy? I doubt it, because those are invisible benefit that most people would still be very angry about.
It only this would be true... Our economy works like this: any money you don't invest or can even rip out of a product is given to the shareholder and does not go back into the production or the wallets of the employees. It is like Apple does it: cut the productions costs where possible but keep the price up and give all the bonus to the shareholders. And be loved by them.
Sometimes yes, sometimes no. Yes, shareholders are all our economy seems to care about these days. But no, budgets are made based upon forecasts. Forecasts change when costs get cut. Budgets are often tied to an expected margin. When the costs permanently go down, the margin improves. Often, this is reinvested, rather than seen as a windfall.
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Music for the discerning:
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http://www.hydrahead.com
http://www.painkillerrecords.com
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