At the time the Steam game distribution service launched in 2004, PC games were arguably downloaded in the context of piracy more often than that of a legit online store. But these days, Steam has a lot of competition, spurring renewed discussion about long-standing issues like revenue sharing and the visibility of indie titles.
Customarily, Steam takes a 30 percent cut of all revenue for games distributed on its store, which is average for the industry. In recent days, however, it's changed this rule for the first time (and now we know why). If your game makes $10 million or more on Steam, the cut drops to 25 percent. Pass $50 million, and it goes down to 20 percent.
This kind of math appears designed to keep "triple-A" publishers in the fold, but Epic evidently remains unconvinced. After all, a game makes the overwhelming bulk of its money in the first few weeks of availability, just like movies at the theater. Therefore, a smaller cut of a smaller amount of revenue down the road may not change the landscape.
Perhaps sensing an exposed flank, Epic is coming out of the gate with an offer of just 12 percent, for the life of the game. Plus, if a game developer licenses Epic's Unreal graphics engine, the company will waive the attached royalty fee for revenue made on its store. (By default, this royalty is 5 percent of the game's gross, but large publishers can still negotiate a flat rate.)
Epic says that more info will be unveiled at The Game Awards on Thursday, December 6. But for now, we know that the Epic Games Store will feature a "hand-curated set of games" for Windows and Mac, with plans to add Android and "other open platforms" (read: not iOS) next year.
Epic is also doing an extensive influencer outreach. In an interview with Eurogamer, Epic CEO Tim Sweeney said, "We believe the ultimate vector for players to discover new games will not be our storefront but creators. Viewership of creator channels has greatly outgrown any storefront."
Sweeney also said that the store's contents would be manually curated by Epic. Since the closure of Steam's Greenlight program, the store has seen growing complaints about a perceived lack of vetting that can cause lower-quality titles to be more common and more difficult to sift through.
Sweeney notes, "We'll have an approval process for new developers to go through to release a title. It will mostly focus on the technical side of things and general quality. Except for adult-only content, we don't plan to curate based on developers' creative or artistic expression."
Epic also says that game makers will be in full control over the content displayed on their store pages, where product placements for competing games might otherwise appear. And unlike the iOS App Store, there won't be any paid search results.
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How might the Epic Games Store compare to Steam at first?
For now, the Epic games store will not have user reviews. And in general, it arguably has a lot of catching up to do to achieve parity with Steam. The latter sports an enormous game library that includes Mac and unusually robust Linux support; your saved games can be stored automatically in its cloud, for free, indefinitely; and it integrates a system called Workshop where users can create, share, and organize game modifications, if the game is compatible.
Steam also has a robust trading card ecosystem where users can sell these goods for store credit, an instant messaging system, audio chat, community boards, achievements, gifting, and gift cards that you can get at Best Buy and online.
But while Steam's many services and large library give it a lot of momentum and market share, major publishers have still been peeling away, and that 30 percent cut may be the issue. Electronic Arts began publishing games on its own Origin store in 2011, and Epic Games itself provides Fortnite through its own launcher outside of Steam. Just a few weeks ago, Bethesda Games released its most recent title, Fallout 76, via its own launcher as well.
When Epic decided to skip the Google Play Store for the Android release of Fortnite earlier this year, Sweeney specifically called out the platform's 30 percent cut as a core reason.
Epic itself has been around even longer than Valve, since 1991. In the game industry, this is practically the dawn of time, and Sweeney has been there since the beginning as a founder of the company. If you're going to launch something to compete against Steam, it helps to cultivate Epic's long track record of success. Not just in terms of high-quality games, but also high-quality relations with developers and players.
When you add the deep pockets afforded by the blockbuster success of Fortnite to Epic's industry experience, its Games Store has the potential to be a serious contender to Steam's throne.
- Epic Games, the maker of Fortnite, has announced that it's launching a Steam store competitor soon, and publishers will get 88 percent of the revenue share, instead of the industry standard 30 percent.
- More details will be announced at the Game Awards on December 6.
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