Thread by @DuvalMagic

@LilMcFlurry There is an important question I think is worth asking: What are these company’s values and given that, which of these companies is more likely to progress at the fastest rate on behalf of the customer and the developer/publisher?

@LilMcFlurry The answer to this question is very useful to the answer to the questions you asked...

@LilMcFlurry It is possible that the EGS does not successfully complete enough features for the store before Borderlands 3 launches to be “good enough”. That’s a risk. It’s one that our publishing partner, 2k, was willing to take. I’m not mad about that decision or the risk, but it’s real.

@LilMcFlurry So the question on that angle is really about long game versus short game... What’s best in the long run? I hope to die in office, creating entertainment for as long as people want me to. So I tend to think very long game. Some of us think very short game - I understand that.

@LilMcFlurry So the risk that not all the features are perfect by the time Borderlands 3 launches is a risk I am comfortable with *IF* I believe that in the long-run, Borderlands 3 and future games I make will be best served if the Epic Games Store a) exists, and b) is competitive.

@LilMcFlurry So, do I believe that? Absolutely... Why? Track record combined with company values and the situation at the companies. I can explain all of those.

@LilMcFlurry First, track record. Now, I have a bit of authority on this topic of track record between these companies. I worked with Valve for many years (20) both as a developer in the Half-Life franchise and as a developer and publisher on the Steam platform.

@LilMcFlurry I have also worked with Epic for about as long, too, as a licensee of their engine and, more recently, as a retail publisher of their game, Fortnite. I know a lot about these people and these businesses.

@LilMcFlurry From a track record point of view, my expectation is that Epic’s investment in technology will outpace Valve’s substantially. When we look back at Steam in five or ten years, it may look like a dying store and other, competitive stores, will be the place to be.

@LilMcFlurry The competitive store that happens to be the leader in 10 years may not be Epic’s store, but it probably won’t be Valve’s and Epic’s moves right now are opening the door and paving the way for a vibrant competitive economy.

@LilMcFlurry Competition in stores is going to be absolutely best for consumers and probably good for developers and publishers as well. The stores that tend to win are the stores that offer the best to their customers. It’s very difficult for customer interest to be king with one store.

@LilMcFlurry One may look at other stores, like Origin or U-Play. Those aren’t real competitors to Steam. A competitor to Steam needs to have an installed base and be sufficiently neutral in alignment so that all publishers and developers who support the store can trust a fair economy.

@LilMcFlurry That’s just not possible with direct stores that are controlled by publishing interests. It’s also not going to come from adjacent services that have other priorities (like Discord, for example).

@LilMcFlurry Epic has credibility here because they have been supplying engine technology to the industry for over 20 years and we have all come to be able to trust and rely upon Epic’s fair play and good will.

@LilMcFlurry With the engine, Epic’s technology has gotten better and better at a faster rate over 20 years than any other game engine middleware on the planet. They have tremendous credibility with how they reinvest in their technology to the benefit of customers and developers.

@LilMcFlurry Meanwhile, as the quality of Epic’s technology improved, so did its success in business. What did Epic do? They used their increased success to lead they way in business terms. They reduce licensing rates for developers and created new ways to become a licensee.

@LilMcFlurry They increased accessibility to the engine so that folks like you can download and learn how to use Unreal Engine to become a game developer yourself - for free. And, when you want to commercially release something, there is a very competitive and fair price for that.

@LilMcFlurry Meanwhile, Valve has taken an absurd cut of the revenue - which would be fine except they have not reinvested it. This is where looking at the values of the company are important.

@LilMcFlurry Also, the way the company is organized and managed is really important to this calculus as well.

@LilMcFlurry Valve is a private company and, to the best that we can see, a huge amount of the value that Valve has generated has been used to enrich the handful of people who own and manage the company. There’s nothing wrong with that, BTW! My business is private, too!

@LilMcFlurry Epic’s business, until recently, was private and closely held. It’s still private, but not as closely held as before. This is important to consider...

@LilMcFlurry Every time Valve makes a dollar, they have to make a decision on whether to put in their own pockets or to reinvest it into technology (or whatever). Valve has made significant investments into technology, and should be applauded for the resultant innovations.

@LilMcFlurry But they have also taken a significant amount of value off the table and, when they’ve reinvested, they’ve tended to put it to a lot of other activities besides the store that is generating all of the revenue.

@LilMcFlurry They’ve been able to do this because they haven’t had to worry about it. There has been no viable competitor to Steam. They have had no external force sufficient to challenge their revenue share and no external force sufficient to motivate a sufficient reinvestment of revenue.

@LilMcFlurry Now there is an external force that is real. This external force, the Epic store, is a really significant threat to Steam. Steam *must* adapt or it will perish.

@LilMcFlurry Almost immediately, we saw Steam crumble it’s previously unwavering stance on revenue share. Holy shit! That’s a miracle. I think the folks at Valve are really smart and really great and they are also, probably, starting to redirect investment into their store.

@LilMcFlurry If Valve is smart, and they are, they should preemptively maneuver as many resources as possible towards improving the store and preparing for Epic’s inevitable challenge to Steam from a features point of view.

@LilMcFlurry The faster Valve can maneuver, the longer it can stay ahead of Epic on features. But, if I were to bet on this (and remember I’ve got a pretty good seat with a great view of this competition), Epic will inevitably surpass Valve on features and quality of service.

@LilMcFlurry Epic is differently setup from Valve right now. Epic’s shareholders are *very* motivated not to take chips off the table, so to speak, but to reinvest those shares into the company. They have an incredible valuation right now, but they are motivated to increase it.

@LilMcFlurry And they have the resources to really make some big plays towards that. All of those plays are going to be fed by a business that is not taking cash out of their system and putting it into individual’s pockets, but towards putting all of their cash back into theirs system.

@LilMcFlurry They recently raised some money. Why did they do that? They have been making more money than they ever have made before? They did that so the owners could sell some of their equity and put *that* cash into their pockets (which is totally cool - that’s what should happen).

@LilMcFlurry But what it means is that this business is not enriching it’s owners by siphoning from it’s profits, but rather it is enriching it’s owners by increasing its value.

@LilMcFlurry That is a HUGE and significant difference between Valve and Epic. Epic is motivated to reinvest 100% of its profits into activities (like the store) that will make Epic more valuable in the future.

@LilMcFlurry Valve is organized such that it is motivated to make decisions about how much of its profit it should distribute to its owners and stakeholders and how much to reinvest. MUCH different.

@LilMcFlurry If we only had that understanding, we would expect Epic to be able to surpass Valve, ultimately. But we have a lot more understanding than that. We have track record and we have what those company’s activities have been over the last decade.

@LilMcFlurry Epic has spent the last decade building an engine (no pun intended) that allows them to grow and deploy technology at an ever increasing pace.

@LilMcFlurry That they have decided to invest SIGNIFICANT amounts of the money they have made from Fortnite into the creation of a store to create a real competitive landscape is, frankly, a GIFT to customers and developers and publishers. ALL OF US WILL BENEFIT from this competition.

@LilMcFlurry During the competition, there will be some difficulties and set backs and shit that doesn’t go right - that’s how it goes. But, ultimately, we’re going to be in incredible shape no matter which store you prefer.

@LilMcFlurry Steam will have no choice but to either give up, lose or to get better faster than ever before. This is good for Steam customers, developers and publishers.

@LilMcFlurry Because Valve is pretty damn good with some awesome talent, I do not expect them to give up or to lose. They’ll fight for it. And they’ll hang on. There’s even a chance they come out on top. Whatever the case, customers, developers and publishers are going to be better off.

@LilMcFlurry Meanwhile, Epic is the forcing function that is going to make this all happen. It’s really incredible, but they are the only guys who can really come along to disrupt Steam’s monopoly and help all this get fixed. They will bring balance to the force (yeah, Star Wars shit today)

@LilMcFlurry And here we are... It’s a year with fewer huge titles than we’ve seen in years. It’s a year where the consoles are at peak life-cycle and PC store fronts are getting rattled.

@LilMcFlurry And in a world where EA and ATVI cannot really be the ones to take the risk to help the forcing function happen, Take Two shows some balls and steps up with our game, Borderlands 3, to be the content that catalyzes this moment. Holy shit. What a world.

@LilMcFlurry Because, at the end of the day, these kinds of movements in our industry are always precipitated from content. It takes content to move us. It took Half-Life 2 to even get us (not quite) comfortable enough to swallow the Steam pill back in the day.

@LilMcFlurry And so we’re going to swallow the Epic Game Store pill with Borderlands 3. And some of you guys are going to hate it and scream bloody murder and you’ll even blame me, personally, for it.

@LilMcFlurry And you can bitch and moan and brigade and stalk my shit, but at the end of the day when we look back at this moment we’ll realize that this was the moment where the digital stores on PC became unmonopolized.

@LilMcFlurry And we’re all going to look back and see how change happened and how costs for developers and publishers to be on stores went down and how that value was passed on to the customers.

@LilMcFlurry Years from now, we’re going to look back at Steam’s current installed base and laugh at how we thought that was a big number when we add up what all the different stores are pushing together.

@LilMcFlurry And we’re going to have a disassociation of features we care about (like friends and achievements and such) from the stores and we can just focus on the games. And we’ll all be able to play together, cross platform. This will take a minute, but it will happen.

@LilMcFlurry And we’ll look back and realize that Epic’s decision to reinvest their Fortnite $ into this (valuable) step and Take Two’s guts to put Borderlands 3 out there in this situation in order to be that forcing function the industry needs were the pivotal moments.

@LilMcFlurry It’s fucking sobering. And it’s a little scary. But it’s just video games. It’s going to be okay.

@LilMcFlurry And, Borderlands 3 is fucking great. We still have a lot of work to do, but it’s fucking great. It’s what it’s supposed to be. It’s not trying to fuck with new business models or whatever - it’s doing exactly what it should be doing to be the game it is supposed to be.

@LilMcFlurry And some of you guys are going to look at the Epic Game Store around when it launches and think about how far along it’s come and some of you will go ahead and join in with us at launch.

@LilMcFlurry And some of you guys will hold to your guns. Shit, some of you may hold a grudge forever. I’m confident I’ll be getting shit about this from some people for years. People are funny that way.

@LilMcFlurry But millions and millions of people are going to be playing Borderlands 3 with us on September 13 and it’s going to be a lot of fun for all of us who are going to be playing - whether we’re on our Xbox’s or our Playstations or we’re playing on our PC’s or, maybe, other platforms.

@LilMcFlurry Man... That was a little cathartic. Done. More questions?