Epic Games Admits In Court That Its PC Store Still Isn't Profitable
Epic Games Admits In Court That Its PC Store Still Isn't Profitable
The company behind Fortnite is currently in a legal fight against Google over in-app fees
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I have a crazy idea for Epic. Instead of paying a fortune for exclusives, leverage the lower 12% cut and have game publishers sell for less (so that the publisher makes the same amount on Steam and Epic)
And GOG. They used to have several games up there, and then delisted them.
Publishers sets their own prices though.
So why can't they sell their game for $56 on Epic and $70 on Steam? They'd make about the same money per sale on each?
Are you seriously asking why a company in a capitalist economy would keep more money for themselves?
Most likely reason, contracts.
Example Nike sales shoes directly at the same price as footlocker. Why dont they under cut footlocker? They have a contracts that says they won't under cut footlocker
There could br an issue like that but well you can make new contracts
But price disparities already exist in other places sometimes. Like YT premium using the App store (due to the 30% cut) and everywhere else.
it depends on what the contracts say
Valve prohibit that, according to the lawsuit filed by Wolfire Games.
There's no way that can be legal. I generally support Valve but that is monopolistic as hell.
That only applies to the steam keys valve supplies to developers that have a 0% cut. Also doing regional pricing would be a massive headache if that were true due to different stores having different recommended price conversions.
The claim specifically mentions Epic and quotes a Valve employee who made statements to the effect of it being prohibited, irrespective of whether a Steam key is involved. Read from page 47 and pay attention to the last paragraphs of page 55.
What do you mean by this?
doing regional pricing would be a massive headache if that were true
Aren't games regionally priced like forever ? I've buying key's in GB because they are cheaper. Also Doesn't steam lock you out of your games if you bought US version and travel to the other side of the world? I just vaguely remember people complaining about it.
If the developer chooses to do so themselves then it's likely ok, but forcing the developer to do so likely violates some sort of law.
I imagine that when Epic instituted it's lower percentage they hoped that developers would sell exclusively on their platform for higher profits. Instead the developers decided to sell on both platforms and just make a larger percentage on the Epic sales. From the developer perspective it would have been wise in the long run to lower prices so that Epic could grow, but that hurts their short term profits and also stymied Epic's potential.
If Epic's store grew to truly rival Steam more developers might have jumped ship, but to do so prematurely would be losing a large portion of the potential customers.
Ultimately Epic had to develop a full Steam clone quickly while all Steam had to do was not suck for the end user.
Why would the developer sell at a loss to help Epic out? What's in it for the developer?
Epic paid $146 to make borderlands exclusive to epic. The game kind of flopped.
Completely untrue. It was a major success and brought record numbers of new customers to the store, which is the main metric pursued by Epic.
Well it shouldn't be at a loss. As the person I responded to pointed out, Epic had a lower fee than Steam so the developer can sell on Epic for less than they would on Steam and make the same amount of money.
Doing so wouldn't be at a loss, but it wouldn't make as much profit as possible.
If the developers did choose to sell on Epic for less than it would bolster the Epic store and potentially lead to more people moving to Epic.
If Steam's fee is 30% and Epic's is 15% the developer could sell on Steam for $70 and make $49 and they could sell on Epic for $60 to make $51. That's a 4% increase in profits.
If the Epic store takes off and a large enough user base switches they could maybe increase the Epic price to $62.5 which would result in an additional 4% increase in profits.
Epic's deal is that they're offering a lower rate, but the developers aren't sharing the benefits of that to help Epic grow. If they did the long term profits would likely exceed the short term.
Again, why would the developer care about making Epic grow? It's the store's responsibility to offer good service, you don't see Nintendo trying to help out Target or anything like that now do ya?
hing like that now do ya?
I'm not sure if you're being sarcastic or if you really don't understand. If you don't understand I'd be happy to elaborate.
Basically what I'm saying is, there is no reason for the developer to try to help a specific storefront, the developer does not work for the storefront, the developers that release games on Epic are just as much a customer of the store as, well, the customer.
If Epic has a shit storefront, the correct answer isn't to give it a lower price there to "Help Epic grow", the correct answer is "Well we'll just focus on selling it on GOG, Humble Bundle, and Steam"
It is unrealistic to expect or even ask for a developer to give Epic special treatment without proper cause "Just to be nice", not how the business world works.
We see this all the time offline, or rather, we don't see it... At no point did Nintendo, Sega, or anyone go "Oh no Toys R Us and KMart are facing tough times, we should lower our prices for those stores to help em out."
Now if it was a developer with actual stake in Epic, maybe they'd do that.. but I don't see Sweeney handing out large amounts of Epic stock to anyone do you?
Slightly edited for clarity
Sure, but the idea of fostering a mutually beneficial preferential relationship between two companies is far from new. I'm not saying that the developer has to take a loss, but they could decrease the sell price on Epic while still making more money than on Steam, GOG, or Humble Bundle. If doing so causes more people to switch to Epic it also means they'll make more money in the long term and in the short term.
I'd argue that the statement that Epic is just as much a customer as the consumer isn't really true. Epic as a storefront is different from Gamestop as a store front. Gamestop buys the product at a given price and then marks it up to make profit, Epic provides fulfillment and gets paid a percentage of the sale. Epic isn't a customer in that sense because they aren't buying and reselling the product.
Yeah, the developers can say fuck it and not help out Epic, but it just furthers the limited monopoly that Steam is. They can't complain that Steam takes too big of a cut and then make businesses decisions that are counter to that complaint. It's like complaining about Reddit but choosing to stay there.
I would agree that Epic is a customer in the sense that they are paying for exclusivity, but I think that contract should also include a reduced sale price in it.
EX: Epic pays the developer X dollars so that the first week of the release it's sold at -Y% of the MSRP exclusively on Epic. After that they can sell it on other storefronts for the MSRP for Z months (with no sales) or they have to refund the X dollars.
I’d argue that the statement that Epic is just as much a customer as the consumer isn’t really true. Epic as a storefront is different from Gamestop as a store front. Gamestop buys the product at a given price and then marks it up to make profit, Epic provides fulfillment and gets paid a percentage of the sale. Epic isn’t a customer in that sense because they aren’t buying and reselling the product.
No, you misunderstand what I mean. I'm saying the DEVELOPER of the GAMES is a customer of Epic, what's Epic selling? Store space in exchange for a cut of the profits. There is no reason for a customer to want to help out a business, they don't have a stake in the company.
If McDonalds is having a hard time, I don't pay them double for cheeseburgers to "help em out", I say "Sucks to be you, but hey we still have a Wendy's."
Sure, but the idea of fostering a mutually beneficial preferential relationship between two companies is far from new. I’m not saying that the developer has to take a loss, but they could decrease the sell price on Epic while still making more money than on Steam, GOG, or Humble Bundle. If doing so causes more people to switch to Epic it also means they’ll make more money in the long term and in the short term.
Except they're still making money selling on Steam, GOG, and Humble Bundle.... There's really nothing in it for them if Epic succeeds and nothing of value lost if Epic shrivels up and dies.