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Epic Has a Plan to Topple Steam

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I’ve been following the rise and fall of digital storefronts for years now. Back in 2006, I was extremely hostile towards Steam and the need to connect to a remote server to get access to my games. Then monstrosities like Games for Windows Live appeared and Steam critics like me were backed into a corner where we had to choose between Steam and something far, far worse. I realize that Steam is seen as the best in the business these days, but it makes me nervous how much of a market hegemon the platform has become. Since the days of GFWL, I’ve been watching each new platform enter the market, always hoping that we’ll get a serious challenger to Steam.

On Dec. 6, we got a new one, and I think it’s the most promising yet. Yes, even more promising than Discord, which I wrote about back in October.

The challenge that new platforms face is the classic chicken-and-egg problem of needing games to attract customers and needing customers to get games. Why would the average consumer leave behind their massive Steam library and their friends list to use a new platform with fewer features and fewer games? Why would a publisher go to the trouble of putting their game on an obscure platform with no users?

In the digital space, convenience is everything. Convenience is even more important than price. In 2011, Gabe Newell talked about how Steam was successful in Russia despite the country’s notorious reputation for piracy. When presented with the choice of paying for an easy one-click install or going through the hassle to get a free version off the torrents, Russians chose to pay for the game.

There’s an overhead to getting a new user onto your platform. When given a choice, the overwhelming majority of people would prefer to use a familiar platform rather than go through the hassle of downloading a new client, creating a new account, and entrusting yet another giant corporation with their credit card and personal information. It’s hard to overcome this. It’s not enough to offer a product that’s just as good. If you want the user to join your platform, you need to offer them something significantly better.

Not everyone understands this. EA launched a platform with nothing to distinguish it. Origin wasn’t cheaper. It wasn’t more convenient. It didn’t offer a better user experience. It didn’t offer a way to kick-start your Origin library by linking your Origin account to your Steam account and granting you access to EA titles you’ve already bought on the other platform.

We’re on year 14 of Steam’s unbreakable market hegemony and EA still hasn’t figured this out. The only idea they’ve ever had was to make their flagship games like Mass Effect 3 and Mass Effect: Andromeda platform exclusives. That works to get people to use the platform, but doesn’t do anything to make Origin someone’s platform of choice. It doesn’t build platform loyalty. The result is that EA’s Origin ends up being this extra also-ran platform that people use only when they have to, assuming they can be bothered to hunt down the login info they haven’t used in six months.

Ubisoft similarly feels that their Uplay platform is entitled to a share of the market without them needing to do anything strenuous like competing with other platforms with better prices, service, or features. Instead they just attach their ridiculous launcher to their Steam releases like a parasite. This is very similar to the setup the now-defunct Games for Windows Live used, which should give you an idea of how awful it is. The last time I tried to play Assassin’s Creed IV: Black Flag from Steam, Uplay intercepted it, launched itself, and then didn’t launch Black Flag. Uplay isn’t just useless, it actually has negative value for the consumer. It adds hassle and risk to buying Ubisoft games without offering the user anything in return.

I know people will jump on me here if I don’t give some love to GoG. Whenever I mention how awful Steam’s competitors are, people are quick to remind me how excellent GoG is. Just to be clear: Yes, GoG is really good. It’s my preferred platform for games. The only drawback is that GoG is focused mostly on retro gaming, indie titles, and stuff from CD Projekt. There’s nothing wrong with that, but it does mean you’ll need to keep using Steam if you’re looking to keep up with AAA titles. Aside from GoG, the digital games marketplace is mostly just the major publishers selling their own games through their walled gardens to avoid paying a cut of their PC sales to Steam.

But now we finally have a major publisher entering the arena, and they seem to have a plan beyond being entitled and lazy. This year at The Game Awards, Epic Games announced their predictably named Epic Games Store. Like Discord, they’re promising a curated storefront as a counterpoint to the laissez-faire approach used by Steam that results in an avalanche of asset flips and shovelware. More importantly, Epic seems to understand the market they’re entering. They’re making serious moves to draw developers to their platform by offering them a far better cut than Valve ever did.

On Steam, Valve keeps about 30% of a game’s sale price for itself, leaving the creator with 70% of the profits. That means Valve is taking a pretty big bite. Worse, earlier this year Valve announced that they would be giving a better cut to bigger games. Games that earn over $10 million on the platform will get to keep 75% of their sale and games making more than $50 million will keep 80%. On one hand, this is understandable from a business standpoint. Big titles give Steam its strength as a platform. Now that the big publishers are making their own wannabe platforms, Valve needs to do something to make sure the AAA market doesn’t abandon Steam. On the other hand, the optics here are terrible. Valve is taking the biggest cut from hungry indie developers while making sure that already successful AAA games do even better.

The Epic Games Store launched their platform by announcing that they will be giving developers 88%. That is, Epic’s first offer is better than the sweetheart deal Valve is offering to the most successful games. This is a very strong move on Epic’s part. The Epic Games Store is only a few weeks old, and already some developers are pulling their games off Steam and moving to Epic. Rebel Galaxy Outlaw, Genesis Alpha One, and Satisfactory are all either making themselves Epic exclusives or releasing on Epic’s platform first, with a Steam release happening sometime later. These aren’t obscure titles, either. This is a very quick reaction to a very big announcement.

This shift is already propagating through the industry. Discord just decided to one-up both storefronts by offering developers 90%.

Indies now have a reason to put their games on another platform. Two months ago, Steam was the most obvious choice for any developer looking to sell their games on the PC. Now they have two very tempting alternatives. If these new platforms score enough exclusives, they could draw people away from the comfort of their Steam libraries. Lots of fans now have a reason to make the jump to the Epic Games Store if it means getting a game sooner or cheaper, or even just supporting their favorite developer.

On top of this, Epic is also offering free games to entice people to sign up. After Valve steamrolled (no pun intended) all these other storefronts, they’re suddenly finding themselves in a fight with someone who knows what they’re doing.

All of this comes at a moment when Valve’s position is unusually weak. In October a bug caused the Steam discovery system to suggest already popular titles rather than games that were relevant to the current user. Some indies experienced a 50% drop in sales for the month, and those folks can’t afford that sort of abrupt change in fortune. Operation Tell Valve All The Things is a grassroots effort by developers to come together and express their concerns directly to Valve. In years past, indies apparently felt that Valve was doing enough to justify the 30% cut they were taking. This year, the pendulum has swung the other way, and developers are overwhelmingly expressing the opinion that Valve’s cut is too big. It’s dangerous to distill such a large and diverse group to a single opinion, but no matter how you interpret the data, it’s clear that attitudes are going through a rapid shift.

When you’re facing off against an entrenched rival, doing things to disrupt the industry is a good thing. Like Anthony John Agnello said a couple of weeks ago, all of this is good news for indie developers. I think it’s good for AAA developers as well. Which means it’s good for the hobby as a whole.

Shamus Young
Shamus Young is a game developer, critic, and novelist. He's just published a new cyberpunk novel. Check it out!

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