Epic Games CEO: Epic Would Retreat from Exclusives, if Steam Improved its Revenue Share
This week saw a heated debate unfold on Twitter after Epic Games CEO Tim Sweeney tweeted about PC exclusives on EGS and the store’s revenue share model.
Under this model, the developer receives 88% of each purchase, with the remaining 12% going to Epic. This is in contrast to Steam’s share tires for developers that range from 70/30 to 80/20 revenue share depending on the game’s sales.
Why 12%? We chose this number to provide a super-competitive deal for partners while building an enduring and profitable store business for Epic.
From that 12%, we net around 5% after direct costs and that could grow to 6-7% with greater economies of scale.
— Tim Sweeney (@TimSweeneyEpic) April 22, 2019
While Sweeney was talking about competitive advantages for developers, not consumers, it really set off Twitter users, who were quick to point out Epic’s “negative monopolistic practice” and being “anit-competitive.”
Exclusives is one of the key monopolistic practices that signify when a monopoly has become a bad thing. EGS doesn’t even have a market monopoly, and they’re already engaging in a key negative monopolistic practice. How bad would they act if they had a market monopoly?
— Beegor (@BeegorBucleor) April 22, 2019
The monopolistic sentiment, of course, refers to the store’s penchant for triple-A PC exclusives, like the recent World War Z. To aggravate the exclusivity situation further, several franchises previously avaialbe on Steam moved to Epic. The most notorious example would be the exodus of Metro Exodus (no resisting a pun here, sorry). The title spent a lengthy pre-sale period on Steam before becoming an EGS exclusive.
When asked if EGS would rethink its strategy of pursuing exclusives, Sweeney replied:
If Steam committed to a permanent 88% revenue share for all developers and publishers without major strings attached, Epic would hastily organize a retreat from exclusives (while honoring our partner commitments) and consider putting our own games on Steam.
— Tim Sweeney (@TimSweeneyEpic) April 25, 2019
That too invited a wave of skeptical tweets, such as this one from @Odintdkay (not posting the tweet in its entirety due to its strong language): “Yes. You would be FORCED to stop your anti-consumer exclusivity deals if steam did that, because it simply wouldn’t be possible to get those deals then. It’s not like you’d have a choice in that matter by then.”
Others chimed in with similar remarks:
But steam has alot more to give than you Guys at EGS do? Steam has screenshots, artworks, a community section, guides, fast ingame support thanks to a game overlay and the community discussions attached to it and much more.
EGS taking as much as steam does, would be stealing.— The_Purge (@Zoerid) April 25, 2019
You’re running a business, and everyone understands that and has no problem with it, so why the altruistic posture? Compete, leverage your hand, and try to crush Valve. It’ll be good for consumers and you’ll gain marketshare, no need for the theatrics. Just my two cents.
— Tyler Malka (@NeoGAF) April 25, 2019
Some of the users have brought up the situation with crunch at Epic Games.
Also, Tim’s concern for developers rings hollow when so many Epic employees are trapped in 80 hour work weeks. Why is so much money being thrown at publishers of other games when it should be spent addressing the burdens of one’s own employees?
— Gabriel Jones (@PVJ_Reviewer) April 25, 2019
Despite consistent criticism for the store’s favoritism for high-profile exclusives, the platform has stuck with the strategy since its launch. In the words of Epic’s David Stelzer, “exclusives are one of the ways we look at of capturing that audience.” However, Sergey Galyonkin, who’s in charge of Epic’s publishing strategy, admitted that the PC exclusivity strategy might be temporary, suggesting Epic could abandon it once EGS is properly established.
