Only 6% of Developers Think Game Stores Should Get a 30% or Higher Cut
Although Steam is by far the most popular PC game distributor, most developers don’t believe Valve is making enough money from their 30% cut. Just 3% of over 3,000 professionals in the game industry (mostly from North America and Europe) surveyed felt that it is reasonable for retailers like Steam and GOG to keep 30% of their sales. A further 3% responded (oddly! ) that more than 30% is justified, but the majority believe the cut should be reduced. For 43% of respondents, a 10% or 15% cut makes sense.
“What do you think is a justifiable amount of your game’s revenue for digital storefronts (eg Steam, Epic Games Store, App Store) to take?” was the question posed in the 2021 GDC State of the Game Industry survey.
Though it was directed specifically at Steam, a question along these lines was posed in the GDC 2020 survey: “What do you think is a justifiable amount of your game’s revenue for Steam to take?” Only 7% of participants in that survey felt that 30% or more was appropriate. A yes-or-no question in the 2019 survey asked if Steam’s 30% cut was justified, and Valve did not do well there either. Of those surveyed, 27% said they “probably not,” and 32% said “no.”
The 30/70 revenue split, which was once thought to be an unchangeable industry norm, has come under intense scrutiny recently, in part because Epic Games made a big splash when it introduced the Epic Games Store in late 2018. Declaring that a thirty percent cut is unjustified, Epic set its own fee at twelve percent, taking direct aim at Steam, GOG, and the Apple and Google app stores.
Although it hasn’t rushed to join Epic, its rivals have conceded. Though only for large publishers who have made over $10 million on the platform, Steam reduced its cut. In contrast, Apple reduced the 30% App Store cut for developers making less than $1 million annually in order to support smaller iOS developers. This year, Google’s Play Store will do the same.
The Epic Games Store only offers games that Epic has personally selected, whereas anyone can submit a game to Steam for a $100 fee. It isn’t as feature-rich as Steam, particularly when it comes to community content. Although Epic continues to develop new features and intends to open up its store to more developers by the end of the year, its exclusivity strategy continues to enrage PC gamers. Hundreds of millions of dollars have been spent by Epic on deals that keep games off Steam and on the Epic Store for a year in an attempt to encroach on Steam’s territory.
Although it is currently losing a lot of money, Epic is adamant that its 12% cut will be sufficient to turn a profit in the long run, refuting the notion that game distributors must take a 30% cut in order to remain profitable.
Since Steam’s 30% cut is obviously unpopular, if Epic can maintain a store on 12%, it might eventually draw in more publishers and developers. However, there is still a long way to go until the Epic Games Store reaches Steam’s scale. Just 6% of the developers polled stated that sales through the Epic Games Store account for the majority of their income, and 78% of them don’t sell anything there. By comparison, only 40% of developers claimed they didn’t sell games on Steam, and 47% of all developers questioned said Valve’s platform accounted for half or more of their revenue.
In connection with Epic’s significant criticism of industry titans, Apple and Epic will go to court next week to settle a disagreement that resulted in Fortnite being removed from the App Store a year ago. It’s not entirely accurate to say that the lawsuit is about Apple’s 30% cut, as is sometimes misinterpreted. While Epic does contend that the thirty percent fee is excessive, its true demand is that Apple allow it to manage iOS device payment processing so that it can completely avoid taking a cut of the money made from in-app purchases in Fortnite and any future iterations of the Epic Games Store. Epic recently put its words into practice by permitting independent retailer itch.io to release products on the Epic Games Store.