Epic Games Storefront Could Provide Valve with Real Competition

For years, game developers of all sizes relied on the Steam network to sell their games and related wares. In exchange for a significant cut of all revenue, Steam would give those developers access to thousands of customers anxious to download the latest puzzler or shoot ‘em up.

In December, Valve, which runs Steam, lowered its cut of developer revenues—provided the developers made over $10 million. If you’re an indie developer, in other words, you’re stuck paying Valve its longtime fee of 30 percent of your earnings. In a posting on Valve’s community forum, the company insisted that the benefits of the cuts would nonetheless trickle down to developers of all sizes: “Successful games and their large audiences have a material impact on those network effects.”

The cuts were clearly intended to entice mega-developers such as Electronic Arts and Activision Blizzard to place their ultra-popular games on Steam. But there are new signs that those massive firms don’t find Valve’s revenue adjustments enticing: according to The Verge, Ubisoft plans to bring The Division 2, the sequel to its hit open-world game, to the new online storefront set up by Epic Games, which also created the Unreal game-development platform that many tech pros rely upon (not to mention the ultra-popular Fortnite game, seen in the image above).

Launched in December, Epic Games’ online store takes only a 12 percent cut of gaming revenues. “As a developer ourselves, we have always wanted a platform with great economics that connects us directly with our players,” Epic CEO Tim Sweeney said about the economics in an interview at the time. Not only is that lower than Valve’s cut—it’s also better than the 30 percent that Apple’s App Store and Google Play demand from game developers.

Here’s the trailer for The Division 2. As you can see, it’s the sort of thing that takes an army of tech pros a couple of years (and many millions of dollars) to create; placing it on the Epic Games’ storefront is not a random experiment or small bet:

There’s every chance that The Division 2 (which launches March 15) could attract other big games to the Epic storefront, especially if it does well. But the real game here (so to speak) might take place among smaller developers; if gamers flock to Epic (and stay there), it could give developers a chance to take home more cash from their hard work. Would that, in turn, convince Valve to further lower its fees? That’s a much harder question to answer.