Most game developers do not believe Steam is getting a 30% cut of revenue

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Most game developers do not believe Steam is getting a 30% cut of revenue

Steam is by far the dominant distributor of PC games, but the majority of game developers do not believe Valve is getting a 30% cut of revenue. in a survey of over 3,000 game industry professionals (mostly in North America and Europe), stores such as Steam and GOG are getting a Only 3% said it was reasonable for them to charge 30%. Another 3% said more than 30% was reasonable (a strange answer!), but ), the majority thought it should be lower; 43% said a 10% or 15% cut was reasonable.

This question appeared in the 2021 GDC's "State of the Game Industry" survey, which asked, "How much of your game's revenue do you think the digital storefront (Steam, Epic Games Store, App Store, etc.) is justified in taking?" The question was.

GDC's 2020 survey asked a similar question, albeit directed at Steam: "How much of your game's revenue do you think Steam should take and is justified?" In that survey, only 7% of respondents said that more than 30% was justified; the 2019 survey asked a yes-or-no question about whether Steam could justify a 30% cut, but Valve did not fare well there either. 32% of respondents said "no" and 27% said "probably no."

The 30/70 revenue split, once thought to be an unchanging industry standard, has come under intense scrutiny in recent years, in part because of Epic Games' much-publicized launch of the Epic Games Store in late 2018; Epic declared the 30% cut unreasonable and and set the fee at 12%, directly challenging Steam, GOG, Apple and Google's app stores.

Epic's competitors did not scramble to join it, but it budged; Steam lowered its reduction, though only for major publishers who had sold more than $10 million on the platform. Apple took the opposite approach and halved the App Store's 30% reduction for developers making less than $1 million in revenue per year in order to favor smaller iOS developers. Google's Play Store plans to follow suit this year.

The Epic Games store is not as feature-rich as Steam (especially when it comes to community) and is currently limited to games handpicked by Epic; Epic plans to open the store to more developers by the end of the year and is continuing to build new features, but its exclusivity strategy has drawn the ire of PC gamers, who have spent hundreds of millions of dollars on a deal to sell games on the Epic store for a year and not on Steam in an effort to eat into Steam's territory. So far it has run out of cash, but Epic claims that the 12% cut will be enough to make it profitable in the long run, challenging the notion that game distributors have to take 30% to stay afloat.

Steam's 30% cut is clearly unpopular, so if Epic can indeed keep its store at 12%, it will attract more developers and publishers in the long run. For now, however, there is still a long way to go before the Epic Games Store can match the size of Steam. Only 6% of developers surveyed said the majority of their revenue comes from the Epic Games Store, and 78% of those developers do not sell anything on Epic's store. In contrast, only 40% of developers said they do not sell games on Steam, and 47% of all developers surveyed derive more than half of their revenue from Valve's platform.

In connection with Epic's big shakeup against the industry leader, Epic and Apple will go to court next week to settle the dispute that led to Fortnite being pulled from the App Store last year. The lawsuit is sometimes misinterpreted as being about the size of Apple's 30% cut, but that is incorrect; Epic argues that 30% is too high, but what the company really wants is to allow Apple to process its own payments on iOS devices and to allow Fortnite and future Epic Games Store for iOS to avoid the revenue cut for in-app purchases altogether. In this regard, Epic recently practiced what it preaches by allowing indie store itch.io to release on the Epic Games Store. (You can read more about the Epic v. Apple lawsuit here.)

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