“Most likely Epic will be the more mainstream version of Steam,” says Joost van Dreunen, the managing director of SuperData Research, a Nielsen company.
Van Dreunen talked to the New York Times about the Steam-dominated PC market.
Tom Clancy’s The Division 2, Epic Games Store exclusive
Here’s what’s at stake
According to Newzoo, PC games are expected to bring in $35.7 billion in 2019, up four percent from 2018.
47 percent of all studios sell their games on Steam, as per this year’s GDC study. For the majority of developers using the platform, Steam accounts for 75-100 percent of their sales revenue.
Being on a go-to storefront does not come cheap to developers. Steam takes 30 or 20 percent of all revenue generated by the game depending on the sales.
EGS enters the scene
That might change in the future, according to Van Dreunen, as Epic Games Store is uniquely positioned to challenge this status quo. What are the advantages at Epic’s disposal?
- Tons of cash. As per SuperData estimates, Fortnite: Battle Royale has generated $3.9 billion in revenue or even more.
- Focus on community building. “They’re going to be this social platform where there are going to be cool games but you are also going to be hanging out with your friends,” van Dreunen said.
- Access to the Chinese market that Steam does not necessarily have. Through Tencent that owns 40 percent of Epic, the store can tap into more than 300 million computer gamers.
- EGS only keeps 12 percent of game revenue. Additionally, Epic waives the 5 percent royalty fees if you used Epic’s Unreal Engine for your game.
Epic has been putting these advantages to some good use. Not only do many indies prefer Epic’s revenue share model, the company managed to get xclusivity deals for blockbusters, like Metro Exodus, Borderlands 3, The Outer Worlds, and Control.
Ubisoft that has been on Steam for years, decided to partner with Epic for the release of The Division 2.
“It’s unrealistic, the current business model that they [at Valve – Ed.] have. It doesn’t reflect where the world is today in terms of game distribution,” said Chris Early, Ubisoft’s vice president for partnerships and revenue.
We are yet to see how this turf war plays out between different stores. But the competition is good, right?
“What’s a Sony without a Microsoft and a Nintendo?” said Greg Kasavin, the creative director at Supergiant Games, whose title Hades has been EGS’s exclusive for a year. “The console cycles were always best when the rivalry is heated.”