During 2018, we had a number of new players enter the PC games landscape. These included some pretty big players, such as Fortnite and Unreal firm Epic Games, communications platform Discord and Kartridge from Kongregate.
Many of these are launching with seriously competitive offerings, such as Epic's 88 per cent revenue share for developers and Discord's 90 per cent slice. We caught up with our PC Pulse to see what impact these new storefronts might have on the current landscape
We're seeing a number of new players entering the PC marketplace space, such as Epic, Discord and Kartridge. What impact do you think this will have on the market?
More competition is generally a good thing I think. Monopolies can be good in some circumstances, but overall competition drives innovation.
The year ended with a lot of announcements from the new digital stores. So far, it is early to say what will the impact, but I believe that there is already a shift happening in the discussions I have with the studios where there is an assumption that they will need to handle multiple storefronts for their games. Overall, the competition in that space was sorely missing, and it can bring a lot of positive changes for the creative side of the ecosystem. I am looking forward to the stores competing to become the most beneficial, sought after environment for developers.
All this competition is great news for everybody (except perhaps Valve). I think it is going to take a while, but over time the playing field will become more level. We shouldn’t forget, however, that Valve has a massive head start with their enormous existing audience and massive content library. They’re not going to be easy to beat! The big question is whether Valve, as an organisation, is capable of competing? They've been operating on their own since forever, so it would actually be quite surprising if they were ready to take on hungry, well-funded upstarts. On the other hand, they’re an 800-pound gorilla who’s been making smart decisions all the way … So this is going to be very interesting *grabs popcorn*
I can only imagine it benefiting us as developers in the long run. I don't really think Discord or Kartridge will have any effect, but I'm excited about what Epic will bring. There is a downside of fragmentation from a back end point of view. Workshop, Inventory and the Marketplace have been great for us on Steam - it'd suck to have to support both. I know Epic have plans to take that whole thing too and allow you to use it on both platforms - so that's worth keeping an eye on.
As an indie, it's exciting (and partially terrifying) to see new players in the PC marketplace space sprout up. I'd say initially any large changes to the market will be slower than maybe we'd all like. While developers may be more interested in the benefits Epic are offering, as a marketer I'm really interested to see if Discord's store will pan out, since it's built on the cornerstone of a social space. No matter what though, indies will still have to work hard to achieve successful visibility.
Overall the new players in this space (pun intended) will help to shake things up - competition tends to be a good innovating force. However what any challenge for Steam's crown needs to do it not just sell games, but replicate the whole infrastructure and community that Steam has built up over the years. Steam is and has been for some time now more than a store - it's a social network, a community platform, a mod scene provider, an update tool, a development environment, multiplayer services and more. To take more than a cursory bite of the pie needs a serious and sustained level of commitment in resources and time. However each of the new entrants is already well accomplished in key areas and have shown innovation in gaming, so I think it's possible one or more of them can make it, or I'd not be surprised to see a wave of acquisitions as they get in the tech, expertise or users to accelerate this. It's going to be interesting to see!
Epic and Discord were both announced to a generally warm reception, but I think both have a steep uphill battle to make any meaningful impact on Steam’s dominance. The appeal to developers is obvious – an improved revenue share and in theory, increased discoverability – but what’s the immediate benefit to consumers? Free games and timed exclusives will be helping Epic generate business and good-will in the short-term, and maybe Discord can offer some interesting social feature integrations, but is that enough to break the status quo? Without any killer consumer benefits or features I think Steam will continue to reign supreme, at least in the West, for the foreseeable future simply because it is the known and tested commodity.
Finally serious competition to Steam, which will benefit both developers and consumers. I'm looking forward to improved services and a better split of revenue share. The downside is that this will easily lead to communities scattering over multiple stores, which is a challenge to maintain.
Hopefully, these newer platforms will do a better job of curation than Steam. Steam's algorithm changes have been borderline catastrophic for a number of indie developers. Any chance for that to be done better could allow companies other than just the huge triple-A houses to have more impact.
Do you think these stores will make a dent in Steam's business, or do you think their impact will be to force Valve to change up its terms, i.e. Epic and Discord offering hugely competitive revenue shares might force Steam to do the same?
Who knows? Movement is these spaces can be lightning fast, but I imagine Steam, like all great tech companies, will be monitoring the situation and will be able to react if they feel the need. Their competitors have a long way to go to catch up, but in the digital space, that’s not so hard as it would be in the physical arena.
I think the overall change will that the PC player base will grow. Epic will take market share from Valve less by stealing their audience and more by bringing a new audience to PC gaming. At least, this is what I hope will happen, and the Fornite success with a younger generation not plugged into Steam feeds that theory. On the Discord front, the challenge is likely more complicated as their existing user base is already quite committed to existing digital storefronts. But the integration they have with influencers, and the deep community features they offer, mean they have quite a few cards to play, especially on the back of their latest fundraiser.
Both. I think Steam will have to start optimising in every way, but since they’ve got both the user base and the cash, they should be able to do that. Their main barrier is going to be fighting their own complacency (“We’re #1 so why try harder?”). For players, this means more choice and better service. For developers, this means more sources of funding: we’re already seeing "platform exclusive launches” and that means the platforms have to fund those exclusive games, which means money for developers. Bring it on.
I would love for Valve to take a look at this and adjust their royalty rates, but I don't think they're that reactionary. They'll likely sit back and see if the Epic Store lands. That said - Epic are being pretty aggressive with their paid exclusives... that's something I don't think Valve would ever do.
I haven't minded giving Valve their 30% because everything I have right now is down to them - so I view them as a close friend rather than an evil money stealing corporation. That's a relationship that has been bolstered over a decade.
Competition helps. My hope is that Valve see what Epic does and improves Steam - which I feel is starting to buckle under its own weight.
If Epic and Discord can build up a challenging enough audience number, possibly. Steam's been going a long time so it might take some time or ingenuity to catch up.
Yes, we'll see changes in revenue shares, I would note though that things like store visibility, community quality and development tools also matter a lot. After all if you're games lack of visibility means you're not making anywhere near enough income to keep going, a switch from 30% to 25% is not going to make a huge difference, whereas bringing in a few thousand new players might. Speaking as an indie, the competition here offers hope of new spaces that might offer some shelter from the Steampocalypse.
We’ve already seen Valve make some adjustments to its Steam revenue share offerings, but these really only impact the largest developers and publishers with sales above $10m. And even then, the most preferential steam rev split tier of 80/20 still isn’t as favourable as the 88/12 split offered by Epic or 90/10 by Discord. I think it’s unlikely that Valve will make any further concessions in the short term because it knows it still holds the dominant position. Instead, Valve could take this opportunity to revisit some of the most irksome Steam features for developers - such as its discovery algorithms, curator features and review systems – and introduce changes to help it justify retaining its standard 70/30 split. That said, Ubisoft’s recent announcement that ‘The Division 2’ will be completely skipping Steam to be a partial Epic Games Store exclusive indicates that maybe even the largest publishers aren’t entirely content with Valve’s recent changes.
They already have as Steam has changed the terms of the revenue share. All of the stores are after the big players so it's going to be really interesting to see how far they are willing to go, or will we end up having everyone selling their own games at their own stores.
I'm doubtful that Steam will drastically change their model. It's working- for them! And gamers are used to having everything in one place. It's possible, but I think Steam would have to see a pretty big dent in their business (which I'm not certain will happen) before they do anything differently.