[IGN] Report: Steam's 30% Cut Is Actually the Industry Standard - Page 7 - Overclock.net - An Overclocking Community

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[IGN] Report: Steam's 30% Cut Is Actually the Industry Standard

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post #61 of 90 (permalink) Old 10-09-2019, 03:06 PM
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I had always assumed Valve went with 30% so as not to upset relations between publishers and other Retailers (e.g. if games are suddenly cheaper at launch on Steam then it could upset relations with companies like Wal-Mart).

If Epic starts releasing AAA games at $50 again that would just be a sign that publishers are willing to cut ties with physical retail stores.
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post #62 of 90 (permalink) Old 10-09-2019, 03:24 PM
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Quote: Originally Posted by ILoveHighDPI View Post
If Epic starts releasing AAA games at $50 again that would just be a sign that publishers are willing to cut ties with physical retail stores.
I felt we already were way past that point; so much so that it was physical retail stores almost begging for the business.

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post #63 of 90 (permalink) Old 10-09-2019, 04:14 PM
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Quote: Originally Posted by maltamonk View Post
I'm fairly confident once Epic gains more users and becomes standard their cut % will increase.
Agreed. But they way they have it set up, it will look great to investors. They can easily increase profits 10% each year by upping the % for many years before they hit 30% of steam (like 10% increase next year would be 13.2% taken). Since they aren't in a massive need of cash right now, they can easily keep is low for a while to get dev's on board. (I think I did that math right...)
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post #64 of 90 (permalink) Old 10-09-2019, 05:49 PM
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Quote: Originally Posted by Woundingchaney View Post
What?

Im telling you their infrastructure costs are extremely minor in comparison to their platform and the revenue it generates. Even on a per title basis the infrastructure cost should be minimal.

Please tell me what infrastructure costs you think are so expensive or what cost you think is justifying the 30% fee.
Do you know how much it costs for Valve to maintain the infrastructure? Do you know how much it costs to initialize and expand said infrastructure? Do you know how much the development of Steam costs, and I mean actual software development of a complex applications network with many complex features and not a pathetic browser like the Epic store is. Do you know how much the Valve spends on legal, municipal, licensing fees?

It seems that you know a lot, so please enlighten us with such juicy info.

Valve does not just pay hosting fees to GoDaddy once a month. There is a lot more to it, Valve runs a complex business operation. There is a huge overhead for just keeping that business running as it is and keeping it legal.

If Valve wanted to simply take that 30% cut and do nothing with it, they sure could. However, the fact is that Valve is constantly injecting the profits from the 30% cut back into the platform and directly benefits us, the gamers/consumers. If you do not recognize the benefits of everything Valve has done for PC gaming, you are either misinformed or simply blind to the facts. For example, guess which company, pretty much on their own, converted the whole of eastern Europe from pirates to paying consumers? The answer is Valve. All those consumers had no way of purchasing games legally and absolutely zero % of the illegal sales went to the developers before Valve has solved the service problem. You all sure do forget important achievements like that real quick. What has Epic Store done for us? The answer is stupid exclusives, distribution monopoly and exactly nothing more.

So is the 30% cut too much? Maybe. Is is justified in Valve's case? I think it is.

You may be amazed by this, but 30% cut was a standard before digital was a thing.

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post #65 of 90 (permalink) Old 10-10-2019, 03:00 AM
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Quote: Originally Posted by Mirotvorez113 View Post
Do you know how much it costs for Valve to maintain the infrastructure? Do you know how much it costs to initialize and expand said infrastructure? Do you know how much the development of Steam costs, and I mean actual software development of a complex applications network with many complex features and not a pathetic browser like the Epic store is. Do you know how much the Valve spends on legal, municipal, licensing fees?

It seems that you know a lot, so please enlighten us with such juicy info.

Valve does not just pay hosting fees to GoDaddy once a month. There is a lot more to it, Valve runs a complex business operation. There is a huge overhead for just keeping that business running as it is and keeping it legal.

If Valve wanted to simply take that 30% cut and do nothing with it, they sure could. However, the fact is that Valve is constantly injecting the profits from the 30% cut back into the platform and directly benefits us, the gamers/consumers. If you do not recognize the benefits of everything Valve has done for PC gaming, you are either misinformed or simply blind to the facts. For example, guess which company, pretty much on their own, converted the whole of eastern Europe from pirates to paying consumers? The answer is Valve. All those consumers had no way of purchasing games legally and absolutely zero % of the illegal sales went to the developers before Valve has solved the service problem. You all sure do forget important achievements like that real quick. What has Epic Store done for us? The answer is stupid exclusives, distribution monopoly and exactly nothing more.

So is the 30% cut too much? Maybe. Is is justified in Valve's case? I think it is.

You may be amazed by this, but 30% cut was a standard before digital was a thing.
You missed Asia, Africa & South America.

Also Steam had started accepting many local payment cards & other digital payments methods, & also cash on delivery!.

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post #66 of 90 (permalink) Old 10-10-2019, 04:22 AM
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I have to say that this isn't surprising at all. In the late 80's early 90's, I worked for Software Etc, which eventually got folded into Gamestop.

I remember during training that the margins for software was about 30%. For hardware, it was about 10%. Peripheral items like cans of compressed air, mouse pads, screenwipes and other similar items were closer to 50 to 75% or way more margin. "Add on sales" was the big time push with Software Etc. They always emphasized add-on sales. It was their bread and butter.

Last edited by LancerVI; 10-10-2019 at 06:21 AM.
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post #67 of 90 (permalink) Old 10-10-2019, 04:50 AM
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Quote: Originally Posted by Mirotvorez113 View Post
Do you know how much it costs for Valve to maintain the infrastructure? Do you know how much it costs to initialize and expand said infrastructure? Do you know how much the development of Steam costs, and I mean actual software development of a complex applications network with many complex features and not a pathetic browser like the Epic store is. Do you know how much the Valve spends on legal, municipal, licensing fees?

It seems that you know a lot, so please enlighten us with such juicy info.

Valve does not just pay hosting fees to GoDaddy once a month. There is a lot more to it, Valve runs a complex business operation. There is a huge overhead for just keeping that business running as it is and keeping it legal.

If Valve wanted to simply take that 30% cut and do nothing with it, they sure could. However, the fact is that Valve is constantly injecting the profits from the 30% cut back into the platform and directly benefits us, the gamers/consumers. If you do not recognize the benefits of everything Valve has done for PC gaming, you are either misinformed or simply blind to the facts. For example, guess which company, pretty much on their own, converted the whole of eastern Europe from pirates to paying consumers? The answer is Valve. All those consumers had no way of purchasing games legally and absolutely zero % of the illegal sales went to the developers before Valve has solved the service problem. You all sure do forget important achievements like that real quick. What has Epic Store done for us? The answer is stupid exclusives, distribution monopoly and exactly nothing more.

So is the 30% cut too much? Maybe. Is is justified in Valve's case? I think it is.

You may be amazed by this, but 30% cut was a standard before digital was a thing.
Im quite familiar with hardware, licensing, operating costs on large scale platforms. How familiar are you? What is your work experience?

Im also quite familiar with cost associated with cloud operations as well as general infrastructure costs and the like. How familiar are you? What is your work experience?

Im telling you a 30% revenue cut for hosting a game sale is nowhere near what it costs them to operate. The operating cost is literally a fraction of this.

Valve does give good incentive to end consumers, you know how else that does? The people that make the damn games....... If they can keep more of the money for their product Im all for it. So all these games you enjoy, you dont feel like the developers themselves or the publishers dont deserve a larger cut from their product, because you like Steam or dont like Epic? This is literally a market standard that is going to be extremely difficult to break and of all companies I would prefer it not be Epic to challenge it, but at the same time it has to be done by a corporation with very deep pockets.

Just because you dont directly have to deal with a 30% cut on your product doesnt mean it isnt a problem for others or the industry in general.

Valve didnt single handedly stop pirating in Eastern Europe that is a fallacy. The 30% cut was a cost to market before digital become mainstream, with a considerably larger overhead and distribution model than taking a script and a file and selling the product on a digital platform.

If you want to know more about traditional cost to market:

https://gamerant.com/video-game-prices-breakdown-514/


---Alex Pham discussed the video game prices division back in 2010 with the New York Times. We can assume that some things have changed since these statistics were gathered, but it's still a good starting point. From every $60 video game sale, we can estimate that roughly 27 of those dollars go to the publisher (Ubisoft, for instance), $15 goes to the retailer (GameStop, Target, or other stores), $7 each goes to returns (games that don't sell) and the platform (such as Xbox), and the remaining $4 goes to distribution and cost of goods.---

So a digital market place literally costs comparable to the physical production, shipping and retail of a good. From a retailer standpoint Valve is taking a much larger cut than traditional BM stores did........ for a digital marketplace.


Last edited by Woundingchaney; 10-10-2019 at 05:07 AM.
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post #68 of 90 (permalink) Old 10-10-2019, 05:26 AM
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People telling a corporation how much they should earn in behalf of other corporations not to benefit the consumer in any meaningful way. "They make too much!". Yes, it sounds as stupid as you think.

God forbid someday you're wildly successful and you can charge what you want for non essential and intangible goods.

#EnthusiastLivesMatter
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post #69 of 90 (permalink) Old 10-10-2019, 07:37 AM
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Quote: Originally Posted by Woundingchaney View Post
Valve didnt single handedly stop pirating in Eastern Europe that is a fallacy. The 30% cut was a cost to market before digital become mainstream, with a considerably larger overhead and distribution model than taking a script and a file and selling the product on a digital platform.

You keep leaving out the majority of the digital platform in what you keep saying, yet include the whole "platform" when talking about retail stores. You cant have it both ways.
The "taking a script and a file and selling the product on a digital platform" is effectively like the final step in a retail store such as moving the game from the stock room to the shelf and then selling it. The bandwidth Valve has to pay for is like the trucking part of retail stores to move the product from developer to the store, and the store location costs are like Valve's cost for datacenters and hardware they have to pay for.


Do you really think this kind of bandwidth is free or something?


Valve is partnered with Level 3 for ISP service to their 66 datacenters. A couple years ago they upgraded to 100gbps network ports for connectivity. Anyway, Level 3 has 42 terrabits per second capacity, and according to that image it seems that Steam alone actually uses 12% of Level 3's entire network capacity. Crazy. It seems that Valve says Steam uses around 500PB of internet traffic a month, and is still growing.








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Last edited by EniGma1987; 10-10-2019 at 07:49 AM.
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post #70 of 90 (permalink) Old 10-10-2019, 08:07 AM
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Quote: Originally Posted by Ashura View Post
You missed Asia, Africa & South America.

Also Steam had started accepting many local payment cards & other digital payments methods, & also cash on delivery!.
Steam offers there own exchange service with a better exchange rate then the banks or anyone else offers.

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