Epic Games’ “throw everything at the wall until something sticks” approach continues as it tries to throw money at its problems to compete with Steam.
In a revolutionary new strategy, the Epic First Run, the Epic Games Store is now offering developers, not just a slice of the pie, but the entire cake – 100% of a game’s sales revenue for the first six months. The only catch? All they have to do is to launch their game exclusively on the platform.
Between Steam’s 30% cut on sales on games with less than $10 million in revenue and Epic Games Store’s normal 12% revenue cut, this seems like a no-brainer, or is it?
Epic Games’ new program isn’t just about the financial allure. Developers who launch their products under the First Run umbrella will also bask in promotional support, including but not limited to “exclusive badging, homepage placements, and dedicated collections.” These products will find themselves highlighted in Epic’s storefront campaigns, from sales and events to relevant editorial features.
To qualify, the game mustn’t launch (or have already launched) on any other third-party PC storefront or any streaming service. Console releases, however, remain exempt from this clause. After the golden period of six months, Epic will then revert to its original 88/12% revenue split. Notably, developers can still parallelly release their products on in-house launchers or platforms that support Epic’s keyless redemption program.
Naturally, the primary target is Steam, the dominant force in the PC gaming market, a throne it has held for decades. It’s clear that the audacious move is designed to entice developers to eschew platforms like Steam for the immediate, and potentially larger, returns that Epic promises. This isn’t the first time Epic has thrown down the gauntlet. Past exclusivity deals have come with cash incentives upfront. This new approach, however, simplifies the game for developers. No exclusive contracts, just a direct financial incentive.
On the surface, the prospect of gaining the entirety of one’s game sales revenue might sound too good to pass up. And while larger publishers like Ubisoft, EA, and Square-Enix might find the proposition enticing given their financial robustness, smaller developers face a more complex choice.
The dilemma is encapsulated succinctly: trading 70% of a massive pie (Steam) for 100% of a possibly much smaller one (Epic Games Store). Steam remains the juggernaut platform for PC gamers, despite its criticized 30% industry-standard cut. Several developers have noted that even when their game is available on both storefronts, Epic accounts for a mere fraction of sales.
Historically, many developers choose to go with Epic’s exclusivity offers due to the guaranteed upfront cash, regardless of performance. For smaller development teams with monthly expenses looming large, such guaranteed sums from Epic could be the lifeline that keeps them afloat, even if it meant venturing onto Steam later.
The missing piece in Epic’s strategy, however, is its platform’s ecosystem. While it may woo with financial incentives and free games, it still lacks the infrastructure to genuinely challenge Steam’s dominance. Steam has its community-driven reviews, for instance, which have cultivated a powerful subculture. For a platform vying for the top spot, Epic’s omission of such features is glaring.
For consumers, the dynamics are shifting. It’s a tug of war between two giants, with the consumer watching from the sidelines.
It’s not just about the profits or the developers. It’s about reshaping the landscape of digital game distribution. The ball is now in the developers’ court. Whether they view this as a golden opportunity or a gamble remains to be seen. One thing is certain: the next few months will be crucial in determining the future trajectory of the PC gaming market.
Between the Epic First Run and the continued improvements made using Unreal Engine 5, Epic Games could finally give Steam a good run for its money.
