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
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
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.