Round Table: Why are publishers leaving Steam?
In 2018, the trend towards decentralization of digital PC retail has become more noticeable. More and more companies are leaving Steam and moving to their own sites. In parallel, near-gaming services have become more active. They set about launching their own grocery storefronts. We talked about the reasons for the current situation with experts of the gaming market: Sergey Galenkin, Ivan Pomytkin and Nikolai Bondarenko.
App2Top.ru : What is the main reason why big publishers are leaving Steam?
Sergey Galenkin, Director of Publishing Strategy at Epic Games
There are several such reasons:
1) The 30% that Steam charges does not meet the level of service that it provides. Consoles for the same 30% provide much better promotion, marketing, testing and placement in an uncluttered store.
2) The Steam toolkit is hopelessly outdated and modern games have to essentially write their own, which works on top of what Valve has. At the same time, some features that are considered standard on other platforms (such as tracking marketing campaigns) are not just missing on Steam, but are prohibited by the rules.
3) Steam, in fact, resells the developer's audience to him. How many good indie sequels have failed on Steam? While the release of a sequel on its platform is almost always a guarantee of good sales.
Ivan Pomytkin, producer of 1C Publishing
Previously, Steam was primarily an effective sales channel and advertising platform for large publishers. Today it is a highly competitive environment. The games they release on Steam are now forced to compete aggressively on the site with other products.
It would seem that this is a normal situation, but there is a nuance. Companies invest huge efforts and money in marketing, but in fact these efforts are directed not only to projects, but largely to Steam itself in the form of traffic that settles there.
Let's say you brought 5,000 customers to Steam for your money. But these 5,000 customers are not assigned to you and your product line. They spread across Steam and there is no guarantee that next time they will buy your new product or at least hear about it.
Also, one of the main reasons for the outcome is the absolute opacity of Steam. Even if you have good relations with Steam managers, with access to the backstage, you will not have a complete picture, a complete vision. Steam provides very limited analytics, very little data. You can't even control where the traffic goes. Access to Big Data is critical for any large company today, Steam does not have it.
Nikolay Bondarenko, Chief Technology Officer (CTO) at Protocol One
Steam manages to remain a big popular platform only due to the fact that there are large publishers who regularly publish their AA- or AAA-class games on it.
They are very important for Steam. Publishers of AAA projects not only sell games to the audience of the site, but also bring new users to the site (both through the brand and through marketing activities at the launch and when updates are released).
Then simple math. Large titles from large publishers gain about a million sales in a year alone. The release cycle for such companies is annual. They release from one to three blockbusters a year.
Each release brings a huge number of their users to the site. But at the same time, the site does not pay them for this, but they pay Steam, and significant amounts.
Yes, I am sure that the contracts of large companies like Ubisoft are different from those of ordinary publishers. It's definitely not about 30%, but you're still giving away your percentage, which you might not have to pay.
App2Top.ru: Are there additional factors that also annoy publishers on Steam?
Sergey Galenkin, Director of Publishing Strategy at Epic Games
Many complain about the dominance of bad cheap games, next to which it is somehow awkward to sell AAA for $ 60, especially when modern AAA games have collector's editions for a hundred or two dollars.
Ivan Pomytkin, producer of 1C Publishing
Now Steam does not perform the function of an effective advertising platform, which it previously was. The amount of advertising space has remained largely the same, but the number of products has increased significantly. Therefore, Steam today can no longer guarantee the fulfillment of its obligations to partners.
It is also important to understand that Steam is primarily customer-oriented. Sellers on Steam are in a very vulnerable position. The fact that the site is always on the side of customers is logical and correct, but up to certain limits.
For example, take the rating system. On Steam, it is subject to external influence, mass hysteria, and trolling. Steam also leaves negative feedback from those people who made the refand, and, in my opinion, this is completely unacceptable.
The very system of refands on Steam raises questions. With her help, it is too easy and fast to return the money.
Plus, Steam charges money for the sale of loot boxes, for any in-game purchases. This also makes big publishers very angry, who make very decent money on them.
Leaving Steam may also be motivated by emotional reasons, such as "why am I paying them 30%?".
Nikolay Bondarenko, Chief Technology Officer (CTO) at Protocol One
There is a problem with audience control and management on Steam. When you work with Steam, you don't have the mechanisms and capabilities that you have when working with your site.
On Steam, even if you have several million people, you are not able to interact with them. You can't send them an email, you can't manage discounts the way you want, because Steam restricts it, it has its own internal rules.
If a company launches its own platform, even if it does not have a large flow of its own releases, it is profitable for it.
Look at Bethesda. The company does not plan to release the PC version of Fallout 76 on Steam. And this is logical. In a few years, only one game of this level (under such a popular IP) will attract several million active players to the company's new site.
These active players will leave their contact details, which will allow the platform to interact with them the way it wants. In particular, it will be possible to use classic advertising campaigns that are not available on Steam.
In addition, it will be possible to invite other companies to your platform, to give the opportunity to come out to other people's projects. The latter will allow you to better manage the retention of the site:
- your main project has been released, you have gathered an audience;
- you publish third-party projects so that the audience does not leave you;
- users are playing third-party projects while you are preparing your next major release.
On Steam, the traffic and retention story doesn't work at all. The possibilities for converting an existing audience into a new project are severely limited.
- You can use the tools related to sales – this is the time.
- You can use tools related to the bundle of your products – these are two.
- You can use the coupon–related tools - these are three.
That's the end of all your activities, you can't do anything else. Even being a large company, it's still tied to the need to communicate and negotiate with a Steam manager – it's a hemorrhoid.
But, again, the main problem is not that you need to communicate with the manager, but that if you are a large company, the cost of attracting and PR from release to release falls, since you have direct access to the audience of your previous projects.
App2Top.ru : On the contrary, what can stop large companies from "exodus"? The same Ubisoft, for example, despite having its own store, remains on the site.
Sergey Galenkin, Director of Publishing Strategy at Epic Games
Until recently, Steam had a loyal player base, which quite loudly expressed its displeasure with any attempts to release the game somewhere else. But after the success of EA and Blizzard, companies stopped being afraid of this, so I believe that Ubisoft will leave Steam in 2019.
Ivan Pomytkin, producer of 1C Publishing
I think the main factors here are the lack of expertise and focus on the PC market for those companies that have not yet left.
For many large companies represented on Steam, the PC market can generate significantly less money than consoles. Plus, one launch of the launcher is not enough. It needs to be developed, regularly add features, pour and count all traffic independently. Not everyone is ready for this yet.
Nikolay Bondarenko, Chief Technology Officer (CTO) at Protocol One
Custom working conditions. But it stops temporarily. As soon as there are more minuses than pluses, they will leave.
Steam is also interesting to publishers as long as it has a sufficient number of top products that bring people and increase sales of all market participants.
We are now in a situation where the cons of Steam distribution are starting to outweigh the pros.
App2Top.ru : The main advantage of your own site is obvious — you do not need to share 30% of the revenue. But does this really outweigh such disadvantages as the need to build your own infrastructure and recruit an audience from scratch?
Sergey Galenkin, Director of Publishing Strategy at Epic Games
It depends on the turnover of the company and its technological capabilities. For even an average publisher, yes, it outweighs it, especially if you consider the possibility of direct contact with your own audience, which Steam extremely dislikes.
Ivan Pomytkin, producer of 1C Publishing
Not everyone pays 30%. Someone pays less. For example, Rockstar Games, I'm sure, doesn't pay at all. Rockstar Games is such an office, without which Steam itself, and not its publisher, will lose first of all.
App2Top.ru: Who, besides the big publishers, makes sense to look closely at launching their own store today?
Sergey Galenkin, Director of Publishing Strategy at Epic Games
For medium-sized publishers, online game developers, and cross-platform game developers.
Ivan Pomytkin, producer of 1C Publishing
I think it makes sense for everyone, including indies, to create their own sales channel, namely their own personal one. It just doesn't mean that you have to completely quit Steam.
Steam has an important image: "Steam is a place where people play." Anyway, it's where everyone comes to in the first place in search of new games, so it's stupid to ignore such a platform.
So we must not leave the site, we must sell wherever possible, including Steam, but at the same time we must keep the focus. We must strive to ensure that the main fruits of marketing activity, efforts and money go to our own site, so that users are assigned to it.
The problem with Steam for small and medium-sized teams is that they find themselves in a situation with it in the role of completely dependent on it. It's wrong when your business depends on the site. This means that your case can kill someone's decision at any moment.
I perfectly remember the situation when Steam removed guaranteed impressions. Madness was going on in the indie forums. People lost all their money in one moment.
So, all companies should strive to protect themselves. It's like storing money in different currencies in different banks.
Nikolay Bondarenko, Chief Technology Officer (CTO) at Protocol One
Any team that develops a game with a serious online component should think about their own store. The team does not necessarily have to work on the MMO. This includes a product where co-op plays an important role or a very high retention game that players will play for several months or even more.
In all these situations, it should be understood that you should not limit yourself to Steam alone.
On the other hand, it is important to understand that in the case of launching your own store, the team must have a certain marketing budget. According to my estimate, it should be at least $250 thousand.
The team also needs to have a release plan, some kind of business connections, so that between the release of its own projects, the site can release other people's games. This, as I noted above, is necessary so that the platform itself does not lose its audience.
App2Top.ru : If you adhere to the position that you should cut your store, then it should be done by the developers themselves, or does it make sense to look at the services that have now begun to offer solutions to automate these processes for revenue share?
Sergey Galenkin, Director of Publishing Strategy at Epic Games
It depends on the service and its conditions, but yes, it can often be more convenient to use a ready-made solution than to do your own.
Ivan Pomytkin, producer of 1C Publishing
Important: it is not necessary to make a large client. For the first time, you can make do with a website with access to social pages, the ability to download a distribution kit and a tool for collecting user mailboxes.
And the accumulation of the audience does not happen at one moment. Even if you create a launcher and the whole binding, you should not expect that your users will instantly switch from Steam to you. No, this is a long process in which you gather an audience, trying to put a purchase through your channel with a more attractive offer.
And no one forbids you to sell both on Steam and on your site. It's just that you will have the opportunity to offer the player a choice. For example, download from Steam or download from you, but with exclusive content, and also give links not to the forum on Steam, but to the forum on your page.
Nikolay Bondarenko, Chief Technology Officer (CTO) at Protocol One
There are few third-party solutions on the market right now that allow you to make your own store. Xsolla makes such a tool, there are a couple of Chinese products, and a similar service is being developed in Mail.Ru Group.
Due to the fact that there are not many of them yet, they are just beginning to appear, I cannot say whether the teams should cut the store on their own or it makes sense for them to look at the mentioned solutions.
I am currently promoting a different concept myself.
I think it's worth creating an open universal solution that would allow neither the developer nor the user to think about choosing a launcher or a platform.
Next year there will be about 12 platforms, besides Steam, on which you can upload something. These are the ones about whom something is known. Much more has been announced. And this does not include Asia.
I'm talking about full-fledged stores right now, not about key sales services.
The developer will have to spread the game not on 2-3 sites, as he is doing now, but on a dozen. This will affect all products except AAA class.
This is not the most favorable situation for the market, because an unhappy active player who plays different games is waiting for hell from a dozen launchers that he has on his computer.
Ten launchers are ten accounts, a blur of activity.
A solution that allows you to use a single account for all launchers will eliminate the problem. And it would be good for the market to move in this direction.
App2Top.ru : In addition to the migration of large players from Steam, there is another trend. Gaming services acquire their own storefronts. Twitch did it, Discord announced it. Can they reshape the market? What do they need to do for this?
Sergey Galenkin, Director of Publishing Strategy at Epic Games
Twitch-you just have to sit down and do it, no matter how funny it sounds. They have everything to deal with Steam — Twitch's audience, Amazon's infrastructure and customer base, and an almost unlimited budget. But technologically, Twitch remains very much behind Steam and has not yet made any moves to close this gap.
Discord, of course, is more complicated. Its developers have a good base of engaged players, but they need to convince this audience to switch to shopping in another store. Temporary exclusives, free subscription games and other things can work, but Discord, like any platform, needs a killer app for which players will spend their money here for the first time, and not somewhere else.
Ivan Pomytkin, producer of 1C Publishing
If Twitch and Discord succeed, it will take a very long time. Plus, it depends on their chosen strategy. If they just sell games, in addition to their main activities, they will not succeed. But if they focus on children who spend a huge amount of time on these services, if they teach these children to watch content, discuss content, play content in one place, and if they are given several years to do this, then I think everything will work for them. But, again, this is a long-term job.
Today, Twitch is not a place where people watch games, and Discord is not a place where people discuss them. On Twitch, people primarily watch show makers, and on Discord they discuss near-game memes and agree to play something. Neither there nor there are they ready to buy games yet, as long as the sites are not suitable for this.
From the point of view of promotion, they may be effective, but by themselves they are insufficient. A person makes a purchase decision on average within the framework of the idea of "five repetitions". For example, on Twitch, a user saw a game in the top, his favorite band is discussing the game on Discord, the game is in the top on Steam, and a hefty banner and an article are hanging on Polygon. If all this has managed to get into the field of vision of a person for a short period of time, then after that he can make a purchase decision.
Nikolay Bondarenko, Chief Technology Officer (CTO) at Protocol One
I would not call the arrival of near-gaming services in digital retail a separate trend. This is a link in the same chain mentioned by the decentralization of the PC market.
I am sure that Twitch will make a platform out of the store. It is beneficial for him to keep the audience at home, and not send it somewhere else.
Discord also has every chance to compete with Steam. Its authors publicly declare about 300 million players who use the platform. I think its metrics are much more modest and the actual number of users is six times less. But it's still a lot, considering that we are talking about the core of the playing audience.
Discord is also in favor of the fact that it knows no less than Steam about its audience: what it plays, how it interacts with each other, what it likes. Plus, unlike Steam, major updates are released not a couple of times a year, but one per month. If its authors seriously take up the creation of a Steam competitor, they will succeed.
