Fortnite developer Epic Games is launching a digital distribution service to rival industry giant Steam.
According to MCV, the new distribution service, called the Epic Games Store, will distribute 88% of a game's sales revenue to its developer. In contrast, Steam only shares 70% of revenue. Additionally, Epic Games will waive the 5% royalty fee normally associated with the use of its Unreal Engine for games on the platform, meaning those putting their games on Steam will still have to pay that fee, resulting in an even larger cut of their profits going elsewhere.
“While running Fortnite we learned a lot about the cost of running a digital store on PC," Epic Games founder and CEO Tim Sweeney said. "The math is quite simple: we pay around 2.5 per cent to 3.5 per cent for payment processing for major payment methods, less than 1.5 per cent for CDN costs (assuming all games are updated as often as Fortnite), and between 1 and 2 per cent for variable operating and customer support costs.”
“Fixed costs of developing and supporting the platform become negligible at a large scale," he continued."In our analysis, stores charging 30 per cent are marking up their costs by 300 to 400 per cent. But with developers receiving 88 per cent of revenue and Epic receiving 12 per cent, this store will still be a profitable business for us."
Sweeney also explained that the new platform would further expand Epic's Fortnite Support-A-Creator initiative. “Creators earn a share of revenue set by developers," he said. "For the first 24 months, Epic is paying for the first 5 per cent, so it will be at least that. But developers are always free to change the payout for their games as they see fit. Support-A-Creator supports YouTube and Twitch among other platforms but is not limited to them. We welcome creators from all platforms.”
Steam, a distribution service created by Half-Life developer Valve, launched in 2003 and has proven immensely popular among gamers, generating tons of sales annually. Steam recently announced that it would decrease its own percentage take for high-selling games as an incentive to publishers. Although it's unclear at this time how open the Epic Games Store will be to developers, the new service offers a lot of incentives for publishers to put their work on its platform, which may mean more deals for gamers.