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?
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?
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.
Ah I see, you’re correct, I did misunderstand you. I think your point is true, but still lacks finesse in describing the relationship between developers and digital store fronts. I also think you’re disregarding the benefit that the additional 18% cut the developer gets to keep as well as creating partnership options rather than being stuck with a defacto monopoly.
I also don’t think it’s fair to compare GOG or Humble Bundle with Epic or Steam, their purposes and market share is so much smaller than Steam. Epic isn’t trying to compete with GOG or Humble.
Also, you’re correct that the developer is making money either way, but they are making a larger percentage on sales through Epic. You’re probably right that the developers aren’t taking that into account, but they are materially benefited by its success. If they fail to account for that benefit and Epic fails then it will mean they make less money overall.
I think instead of your McDonalds example a better one would be contractors for a large business. Maybe your business frequently uses an electrical contractor and due to special circumstances the field is exceptionally limited (specialty license or security clearance). There is one contractor available and they have a monopoly and can charge whatever they want. So far this company has been really fair and not abused their power, but a new contractor becomes available. The new contractor has an inferior service line and is a bit slower, but they’re also cheaper. You could just ignore the new contractor and what happens happens, but in the real world it’s fairly common for businesses to diversify service contracts to maintain a pool of available contractors.
Why would the developer sell at a loss to help Epic out? What’s in it for the developer?
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?
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.
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.”
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.
Ah I see, you’re correct, I did misunderstand you. I think your point is true, but still lacks finesse in describing the relationship between developers and digital store fronts. I also think you’re disregarding the benefit that the additional 18% cut the developer gets to keep as well as creating partnership options rather than being stuck with a defacto monopoly.
I also don’t think it’s fair to compare GOG or Humble Bundle with Epic or Steam, their purposes and market share is so much smaller than Steam. Epic isn’t trying to compete with GOG or Humble.
Also, you’re correct that the developer is making money either way, but they are making a larger percentage on sales through Epic. You’re probably right that the developers aren’t taking that into account, but they are materially benefited by its success. If they fail to account for that benefit and Epic fails then it will mean they make less money overall.
I think instead of your McDonalds example a better one would be contractors for a large business. Maybe your business frequently uses an electrical contractor and due to special circumstances the field is exceptionally limited (specialty license or security clearance). There is one contractor available and they have a monopoly and can charge whatever they want. So far this company has been really fair and not abused their power, but a new contractor becomes available. The new contractor has an inferior service line and is a bit slower, but they’re also cheaper. You could just ignore the new contractor and what happens happens, but in the real world it’s fairly common for businesses to diversify service contracts to maintain a pool of available contractors.
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.