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Thread: [IGN] Report: Steam's 30% Cut Is Actually the Industry Standard Reply to Thread
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11-05-2019 07:26 AM
EniGma1987 I found something interesting today. I was looking at the new SW: Fallen Order seeing if I wanted to buy it. The game is an EA game so obviously its on Origin, but EA is also branching out again and putting games on Steam. The price of the game on Steam is $59.99 and $69.99 for the different versions. If you order it on Origin, the price is $53.99 and $62.99. So they are giving a discount when buying on their local storefront and charging higher percentage through Steam. The difference is only 11% discount though on Origin
11-02-2019 08:31 PM
Woundingchaney
Quote: Originally Posted by Bushido Br0wn View Post
Go to any major retailer and they still dedicate floor space.

You're only thinking of PC, only the US market and only major cities that have internet speeds and data caps that allow downloading 80gb games. It's a wide world out there but even when thinking of the US you hit a roadblock. Are you going to poo on Target to sell your game $5 cheaper on Steam? Sure you'll sell better when talking about the major cities but what about the other 50% of the US that lives in rural areas? Some with the worst internet/caps around because net neutrality doesn't exist anymore. How do you get to them now? Retailers aren't going to carry your game, remember?

If retailers let that fly, console games will try it next.

For point of reference, please view most US product makers store pages. They try not to make a habit, cannibalizing their own profit margins and sticking it to their retailers by selling their product at a cheaper price directly to you.



I think you seriously overestimate the importance of games to these stores. It's a small sliver of their total business. They have more floor space dedicated to towels than games. If they were undercut by Steam, it's likely that the total cost of purchasing, shipping and stocking the games simply wouldn't be profitable enough to bother.

If any one of the 3 could do it and get better profits out of it, why HAVENT they yet? Because it's a LOT harder than you think.
Games don't come in different sizes, shapes and colors like towels or other items. Additionally games don't require much shelf space comparably and only newer titles move in large volume. Stores don't dedicate much space to games because there is no reason to. If anything the death of gamestop should speak volumes to the impact digital marketplaces are having and how retail clearly isn't calling the shots.

Online sales and retail sales have virtually never coincided, usually they only do when the cost of a title is cut not for temporary sales. Console game stores and virtual marketplaces have literally just become mainstream. In the coming years I can easily see one of the big 3 undercutting retail. Literally everything the industry is doing right now is undercutting the retail sector from marketplaces to streaming platforms. The console market is going to change in a matter of years. There is no reason to offer a digital good for 5 usd less than a retail good, when the value of a game has been established for over a decade now. There however is a huge incentive to eliminate the need for a physical retail distribution and all of the manufacturers are steadily moving towards this reality.

The notion that there would or could be some organized resistance from retail at this time just doesn't seem realistic. Profit margins on games and hardware have always been thin for retail but they were always carried, because retailer know they have a dedicated market. If manufacturers wanted to undercut retail they easily could, even if one BM store attempted to boycott them they of course could try, but they would just be sending the purchase to their competitor. Even if a consumer couldn't find something on a store shelf, the entire world is familiar with online ordering regardless of where they live. Right now foot traffic is extremely important to retail and I don't buy into this notion that retail stores have anywhere near the leverage over manufacturers like they did in the past, particularly in the modern digital world.

The part I don't understand in your argument is that the manufacturers are clearly undercutting retail right now. New games can be played on their services at launch for a monthly fee a fraction of the cost of buying new. By your argument retail should be revolting right now, but there isn't a change at all because retail for one isn't organized and for two because they simply don't have the clout in the gaming market right now. Retail stores are more than aware of this reality. Its not necessarily a matter of manufacturers shifted their IPs to another digital retail, its a matter of manufacturers owning their own retail channel and for that they very much would undercut existing BM stores.
11-02-2019 04:37 PM
HanSomPa
Quote: Originally Posted by lombardsoup View Post
That horse was been beaten to death years ago and lost handily at the ballot box. OCN living in the past...
Uh huh. The idea that 400$ a month for Internet is commonplace in rural areas is a hyperbole. Another question worth asking is just how many rural Americans even want or need access to games... or high speed Internet. Or what is defined as "rural". For companies who are calculating on the margin, going after rural customers is simply not worth it.
11-02-2019 10:32 AM
Imouto
Quote: Originally Posted by WhiteCrane View Post
I don't understand why you placed struggling devs in quotation marks. I did use the phrase, so it's fair game to quote me but you're obviously implying some level of sarcasm. The lower fees make the difference between some games releasing and not releasing. Shenmue 3 comes to mind. From your comment, it strikes me the only way to avoid the 30% fee is to simply not release the game on Steam, or in any Brick & Mortar stores that take a 30% cut.
If making 20% more from the PC version when the bulk of sales will come from the PS4 at 30% cut is the difference between Shenmue III making it or not we can agree that it is likely to bomb in the most legendary fashion like the previous two installments did.
11-02-2019 08:31 AM
lombardsoup
Quote: Originally Posted by skupples View Post
implying that rural americans weren't already under obscene caps pre- death of Net Neutrality.

I can assure you, its just as bad as it ever was. I've spent the last 5-6 years working for companies that support large #s of remote employees. Most are in rural areas, and are on internet plans you would'a laughed at even in 1995.

I've often wondered the value in a service that assists older folks in adjusting their monthlies. Phone bills, power bills, cable bills, etc etc. Why do I say this? One of these ladies was paying $400 a month for a 10mbit congruent DSL line. You're telling me there isn't money to be made off of saving her ~$300 a month?
That horse was been beaten to death years ago and lost handily at the ballot box. OCN living in the past...
11-02-2019 08:15 AM
skupples implying that rural americans weren't already under obscene caps pre- death of Net Neutrality.

I can assure you, its just as bad as it ever was. I've spent the last 5-6 years working for companies that support large #s of remote employees. Most are in rural areas, and are on internet plans you would'a laughed at even in 1995.

I've often wondered the value in a service that assists older folks in adjusting their monthlies. Phone bills, power bills, cable bills, etc etc. Why do I say this? One of these ladies was paying $400 a month for a 10mbit congruent DSL line. You're telling me there isn't money to be made off of saving her ~$300 a month?
11-02-2019 01:19 AM
Bushido Br0wn
Quote: Originally Posted by Woundingchaney View Post
Considering how the physical pc game retail virtually doesnt exist, this doesnt seem to be true at all.

You could of perhaps made this argument years ago, but I dont see its relevance in the modern market. BM stores do not have this kind of oversight on the market to dictate policy like this.
Go to any major retailer and they still dedicate floor space.

You're only thinking of PC, only the US market and only major cities that have internet speeds and data caps that allow downloading 80gb games. It's a wide world out there but even when thinking of the US you hit a roadblock. Are you going to poo on Target to sell your game $5 cheaper on Steam? Sure you'll sell better when talking about the major cities but what about the other 50% of the US that lives in rural areas? Some with the worst internet/caps around because net neutrality doesn't exist anymore. How do you get to them now? Retailers aren't going to carry your game, remember?

If retailers let that fly, console games will try it next.

For point of reference, please view most US product makers store pages. They try not to make a habit, cannibalizing their own profit margins and sticking it to their retailers by selling their product at a cheaper price directly to you.

Quote: Originally Posted by Woundingchaney
BM stores can't afford to not carry titles these days, particularly AAA console titles. Any foot traffic that a BM store can muster is important to their existence at this point and console games still have some value. Quite frankly is Sony, Nin, or Ms wanted to undercut physical retail they very much could, I simply can't imagine any organized backlash from BM stores. Honestly if BB didn't want to carry a title there is a Target or Walmart just a couple blocks away.
I think you seriously overestimate the importance of games to these stores. It's a small sliver of their total business. They have more floor space dedicated to towels than games. If they were undercut by Steam, it's likely that the total cost of purchasing, shipping and stocking the games simply wouldn't be profitable enough to bother.

If any one of the 3 could do it and get better profits out of it, why HAVENT they yet? Because it's a LOT harder than you think.
11-01-2019 02:50 PM
Shawnb99
Quote: Originally Posted by WhiteCrane View Post
Functionally speaking, what would the purchase experience look like if they genned their own keys? Would there be a game page in the Steam Store? Or are they just using Steam as a download server? If you're going to market the game yourself (to a much smaller audience) I'm thinking hosting for the installer is the least of your worries.
Steam would throw a fit and they would be forced to stop selling keys outside the steam store or make it a separate version. Kinda like what happened to DCS. Used to offer Steam keys when bought through their site, Valve said no and they were forced to make all store purchases only have a key that works on the stand alone launcher.
11-01-2019 01:48 PM
WhiteCrane Functionally speaking, what would the purchase experience look like if they genned their own keys? Would there be a game page in the Steam Store? Or are they just using Steam as a download server? If you're going to market the game yourself (to a much smaller audience) I'm thinking hosting for the installer is the least of your worries.
11-01-2019 01:41 PM
skupples
Quote: Originally Posted by EniGma1987 View Post
And steam doesnt charge for key generation and they dont take a 30% if the game isnt purchased through steam so "struggling devs" can easily get around the 30% steam fee too.
For all the complaints that Indie devs cant afford 30%, not only does key generation get around that but Valve makes exceptions from the 30% amount for smaller games as well
And for larger developers, Valve moves down to a 25% cut as soon as the game generates $10 million in revenue (from game sale, DLC, and micro transactions). If they manage to reach 50 million Valve only takes 20%.
while yes genning your own keys gets around that, it doesn't get around not being hosted in a store seen by 10s of millions.

I'm curious what epic vs. steam active accounts #s are.
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