In the nearly 15 years since Steam has existed (which means that yes, Half-Life 2 was released nearly 15 years ago), the platform has taken a 30% cut of sales on the platform. For a long time, that’s been enough for most developers and publishers. It’s a huge slice of the profits, but it’s one that’s been worth it just by virtue of being listed on Steam.
Valve is now making the biggest change to that revenue sharing model since the service began. Instead of the straight 30% cut, there is now a tiered structure in place. The first $10 million of sales generated will still earn Valve the 30% cut, but once sales move between $10 million and $50 million, the cut goes to 25 percent. And for every sale beyond the first $50 million, Steam’s cut drops to 20 percent. The tally includes DLC, so you might reasonably expect the bigger publishers to push even more of that, as they’re incentivised to do so.
“The value of a large network like Steam has many benefits that are contributed to and shared by all the participants. Finding the right balance to reflect those contributions is a tricky but important factor in a well-functioning network,” Valve said in a statement on the Steam Community page. “It’s always been apparent that successful games and their large audiences have a material impact on those network effects so making sure Steam recognizes and continues to be an attractive platform for those games is an important goal for all participants in the network.”
Of course, this new revenue sharing scheme benefits the bigger players more, as it’s unlikely that indies and other smaller developers will reach the threshold for a lower revenue split.
If anything, this is likely Valve’s response to the bigger publishers like Bethesda, EA, Activision, Ubisoft and Epic having their own launchers and distribution platforms that aren’t subject to such high fees. Epic making the decision to launch Fortnite on Android outside of Google’s Play store was probably a deciding factor too.
Of course, many indie developers don’t feel that this new scheme is fair, as it doesn’t benefit them at all. While they’re right, capitalism seldom is fair.
Last Updated: December 3, 2018
Gavin Mannion
December 3, 2018 at 11:13
Okay so doing some quick maths,
PUBG has sold over 24 million copies, it retails for around R500
500 * 24 000 000 = R12 000 000 000
30% of R12 000 000 000 = R3 600 000 000
R3.6 BILLION Steam has made of PUBG….
yes I know not all are sold on steam and yada yada yada.. but people. THIS IS ONE GAME
Kromas
December 3, 2018 at 11:25
And Valve has just over 300 employees. And almost no overheads.
HvR
December 3, 2018 at 14:58
I wouldn’t say no or very little overheards; their hosting and download bill must be something eye watering. Also they probably spend and insane amount on system security since they are both liable for the monies collected (which we see runs in the billions) and the IP security.
But they are definitely very very profitable.
Kromas
December 3, 2018 at 15:12
Their hosting costs very little as ISPs at one point were literally jumping to be able to host. I member the battle mweb and IS had to get the first hosting rights.
Magoo
December 3, 2018 at 11:36
The standard price on steam is R319.
It also goes on special a lot.
But just for interest sake, let’s see how this new system would have benefited the publishers using your example.
R12 000 000 000 / 13,67 = $877 764 042
30% of $10m = $3m
25% of $40m = $10m
20% of $827 764 042 = $165 552 808
Steam takes
R2 441 013 293
vs
R3 600 000 000
HvR
December 3, 2018 at 15:51
From published 2017 numbers of SteamSpy:
27 795 000 copies of PUBG sold for estimate revenue of $600 million
Total value sold for all games were estimated $4.3billlion for 2017
Interesting that Steam has only been a cash cow the last 4 to 5 years for Valve, in 2014 their own games sales still surpassed their Steam revenue.
Original Heretic
December 3, 2018 at 12:03
Only reason capitalism is unfair is because of the people who make it so.
Pariah
December 3, 2018 at 12:23
That would be us. The consumers. Who are then put in charge of large companies. And greed wins.
Original Heretic
December 3, 2018 at 12:25
Greed. Greed never changes.
HvR
December 3, 2018 at 14:51
Think it is really shit of Lord Gaben to put this on a monetary limit instead of units sold.
As for the indies; agree that it is unfair but then again they wouldn’t have had a proper platform if it wasn’t for Steam which was made big as it is by AAA games and the awesome specials of yesteryear.
If Steam is going to start suppressing indie and smaller dev company games in favour of the big AAA titles as we have seen on other online media platforms (*Youtube cough cough*) there should be huge outrage.