I've been dunking on some people who have been talking in apocalyptic terms about the Epic Store (Hi @boogie2988 !), so let's get real and talk about the box price of PC video games. (1/22)
We spend a lot of time talking about how AAA video games are getting more expensive to make. $60-70M dev costs are not uncommon, and some games have crossed $100M easily. And these costs will increase as graphics become higher fidelity. (2/22)
. @raphkoster started warning about 'the Age of the Dinosaurs' a decade ago. Since then, AAA dev has become so expensive that most mid tier devs have fled the business. (3/22)
But we don't talk a lot about the other half of the pie, the price tag. And how little of that goes to the developers/publishers who make your games. (4/22)
The price tag for most AAA games out of the gate is $60 bucks. Here's one article about how those costs are split when you buy a game at Best Buy. As you see, the game developer/publisher gets less than half of that sixty bucks! (5/22)
This article doesn't go into how dev/publisher splits their money if its a third party dev, which is an amazing bit of fuckery. Summary is that the publisher usually pays the dev zero royalties until all dev costs are recouped. (6/22)
... which means that if a game cost $60M to make, a game dev may not actually see revenue for months, even if the game is a monster hit! (7/22)
Anyway, eagle eyes will note that in that split, there's a whole bunch of costs that don't EXIST on Steam. Distribution & warehouse space. Printing the discs and manuals. XBox/PS licensing fees. Online PC games should be MUCH cheaper than what you pay at Best Buy. (8/22)
Why aren't they? Well, because frankly you'll pay it. But ALSO, Best Buy makes us. Brick and mortar stores demand that there be no price advantage, and right now, they still have enough clout that publishers cave. (9/22)
Still, the advantage of selling on Steam is clear. They operated on a 30% revenue split for a while. Dev/Publisher splits $42 per copy sold rather than around half. This is on top of lots of Steam bennies like cloud saving. Excellent! (10/22)
The fact that more sales have moved to digital has reduced pressure on the idea that games need to be more expensive, to offset higher dev costs. More of that $60 that goes to artists instead of printing DVDs, the less we need to sell sparkle ponies. (11/22)
Recently, Steam changed their rules for AAA games (screw indies, right?) so that games that sell more than $50M gets a 80/20% split on revenue earned after that amount has been reached (12/22)
ANYWAY, then Epic comes along asking for only a 12% cut. Basically they say 'How about you keep $52.80 out of every $60 game you sell.' And... um, $10 bucks a box is a LOT of money. (13/22)
Borderlands 2 sold between 5-10M copies on Steam, says SteamSpy. At the low number, my back of the napkin math says the difference is about $27M dollars even w/Steam's improved rate for AAA. That's a LOT of enchiladas. (14/22)
And more to the point, that's a LOT of money that can pay for more art and programming of the game. Gamers should be HAPPY when game devs get more of the $60 price tag, because that results in better games down the road. (15/22)
Now there's a lot of handwaving in this math - the hidden costs throughout the industry are complex, every game is a unique problem and it's not really my field. But the takeaway is that I don't know if Epic paid Gearbox for their exclusivity. But they didn't NEED to. (16/22)
A copy of Borderlands they sell on Epic nets them $5-10 more than a copy they sell on Steam. Offering a choice of both is crazy, because most gamers will choose inertia (i.e. Steam), which screws Gearbox! (17/22)
A smaller indie developer might be wrong to make this choice, because for many gamers Steam is their method of game discovery. But BL3 is different - Gearbox believes gamers will seek it out wherever it is. They're probably right. (18/22)
People like @ErikKain who handwave away the revenue split are basically arguing that Gearbox should turn down tens of millions of dollars because its inconvenient for gamers to have another icon on their desktop. Actual headline: 'there is no god'.(19/22)
Meanwhile, in the real world, developers getting a bigger cut of the pie is a great way to actually reduce the pressure to either raise the price of games or to try to sell lootboxes and sparkle ponies. (20/22)
Steam has the ability to effectively end this war. If they offered the same royalty rates (or even close) as Epic, game devs would be crazy to not favor Steam's wider install base. Its odd they haven't yet. (21/22)
But I gotta tell ya, I'm happy that we may end up in a situation where there are two stores competing to make lives easier for game devs, and I'm disappointed that gamers are pissed off about it, and that some observers are milking this outrage for clicks and views. (22/End)
Addendum: one thing that gamers don't get is that they aren't the customers in this EXTREMELY capitalistic, EXTREMELY competitive dance happening.

They're the product.

Gearbox and 4A Games are the customers being courted.
Addendum #2: I have further expanded on my math and other notes here. Of particular note, if Borderlands 3 is using Unreal for their engine, this deal is even MORE attractive.

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