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Epic reduce their cut to 0% for the first $1 million in revenue for devs on the Epic Games Store
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this post was submitted on 02 May 2025
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30% has been industry standard across any digital storefront until Epic found out they couldn't beat steam by just paying for exclusivity deals. Then they decided to go down this race to the bottom strategy.
Steam is good because of that 30%.
Firstly, data transfer and storage isn't free and is an ongoing cost for Steam even after purchase. How many times can you think that you installed a game, then deleted it and ultimately downloaded it again—Steam doesn't get any more money, but that costs them. They could have done all the limited number of downloads or transfer speed limiting shit that used to be more common.
The profit they make on top goes straight back into Valve. They are a private company without shareholders to please and pay dividends to. This has allowed them to keep reinvesting into Steam and making it the best experience for the consumer they can—they've been rewarded with a load of goodwill and market share following that. You can guarantee that we wouldn't have proton or the steam deck without the money valve made from steam sales.
Epic doing this is just another attempt to try and tempt developers to choose their store and not list on Steam. They have no interest in actually improving their offering, their only strategy is to try and find ways to put Steam users at a disadvantage and hope that people go "well I guess I'll go for it on epic if I have to". They don't have any problem getting companies to list their games on Epic, this is 100% about manipulating developers to not list on Steam.
GoG is the alternative to Steam, and offers something that benefits consumers to compete with Steam in DRM free games.
Friends don't let friends reward Epic for anti-consumer business practices.
Simple just use short term oriented goals because that's what the company is focusing on. Steam was always long term oriented from the beginning Gabe said CD less gaming.
Didn't Steam essentially create the "standard" for 30% price point for digital distribution in the first place? While a 30% margin makes sense for physical retail, it's never made sense for digital distribution.
If they created the problem in the first place, then isn't that actually an issue?
I'd argue it makes more sense for digital distribution, once the sale has been made in a physical store, there's no ongoing cost for them.
A digital storefront has the ongoing cost of downloads and updates, as well as the distributed storage costs (Steam has many copies of games all over the world to mean downloads are quick)
Data transfer costs back in the mid 00s mean that every install of a game like HL2 cost them a dollar or so (A quick Google suggests they might have paid a couple of cents a gigabyte, but they may have had a better deal given the volume of data). If a user ever uninstalled and reinstalled more than a couple of times (a lot more common back then with the limited storage everyone had), and couple that with ongoing update transfer costs then most of the profit from a full price sale could easily be gone, let alone if the game was bought with a discount as is very common. If they never made any profit from the sales, Steam never makes it past its awkward years.
Data transfer is definitely cheaper these days, but then games are bigger and they probably spend a lot more on datacenter space than back in the day
A physical storefront has to deal with asset depreciation however. A product can sit on the shelf and reduce in value as it ages, there is no such thing with digital distribution.
Based on estimates, and various reports, leaks etc. since they aren't a public company... Steam makde an estimated $10.8 Billion in 2024. They made $780,000 per employee as of 2018 based on an internal report, more than nearly every other company on the planet. They're not spending anywhere near that on operations.
Surely the sales are an equivalent there? Both ultimately mean the total price goes down and the store's cut goes down accordingly.
Don't get me wrong, they're definitely profiting these days. $11bn is a massive amount of revenue* for a company with the number of staff they do. But Steam are going to have disproportionately high datacenter costs compared to most other companies. As a rough comparison: Watching an hour of netflix at HD quality is about 1GB of transfer or so, Call of Duty is something like a quarter of a terabyte. Someone who downloads call of duty once would have to watch 250h of netflix to cost them the same—and Netflix is funded by subscription.
Then remember they're likely paying their staff very well, I would not be surprised at all if well over half of their revenue just goes to operational costs before any reinvestment.
*Checked the figure was revenue and not profit.
The sheer data transfer happening is insanely costly and is not something people think about. Valve could certainly tweak their cut for small developers in sone way, but they arent just pocketing 30%.
Valve actively increase their cut for small developers and their entire business model is to keep staff to a minimum and costs aggressively low.
They are absolutely just pocketing 30%.
What they are doing with the 30% is anybody's guess, because they are a private company, so I don't know how much of it becomes new boats and knifes for Gabe and how much goes to VR HMDs and handhelds, but they are a VERY lean company that sure seems to like being cash-rich.
It would be impossible for them to pocket 30%
They apparently transfer approximately 50 exabytes a year.
Some napkin maths has that as costing around $5bn to do from a provider like AWS. Which is half their annual turnover not profit.
Now sure, they will not be spending that much on just data transfer, everyone in the industry knows you get bespoke deals with the cloud providers before the bill gets close to that—but they'll not get anything close to half price.
Then they need to pay for the actual storage costs
And the compute needed for running all of steam's API and web servers
And staff, which if they only have 80 of them, will be paid some of the best salaries in the industry.
If you think they're taking even half of that 30% as profit, I think you need to give this another look.
Also killed physical media for PC games, carving out a near monopoly for themselves.
Eh, I would argue that the expansion of broadband internet and the increased expectation of instant gratification by consumers made it a perfect time for Steam's expansion. The death of physical media is a side effect of the ability to near instantly download anything you want.
Physical media died when games expanded beyond their capacity. Optical discs are physically fragile, they have a limited shelf life, they have to be reproduced by specialized equipment (not considering piracy here), they have to be physically transported to the customer, some regions are financially unviable (imagine the Helldivers 2 situation but with every game), and production has to end at some point. Having to set up a physical supplier also severely limits the ability of indie or solo developers to have any kind of success or even presence.
Those are issues we've had to look past because we didn't have anything better at the time.
The gaming industry is not immune to the Dreadnought effect. Magnetic tape has made punch cards obsolete. The optical disc and flash storage have made the magnetic tape obsolete. Now, digital distribution has made physical media obsolete, and people clamoring for its return are nostalgic for a world that doesn't exist anymore.
I liked physical discs when they were relevant, but I don't relish the idea of having to pray that Clair Obscur DVD #8 is not damaged when I have to transition to a new area.
By offering a far better experience for the vast majority of people. Like how DVDs killed VHS, where some people who couldn't afford to upgrade were left behind.
I don't think this is true. 20% was the standard, as I recall, not 30%. I think it has moved that way over time, though. And even that only made some sense while retailers were too powerful to compete with them on price. Storage and bandwidth are much cheaper than bricks and real estate and salaries.
This is a good thing, Steam's cut is too big, especially for a company with next to no staff that runs on a heavily Uber-ified model and produces very little and I an very tired of the fanboyism.
I agree that people should default to GoG when possible, though.
What valve produces is a user friendly platform. That's their value proposition and its worth many times its weight in gold
Thats worth 30% of the sale to me as a user. And is something epic and other publishers are completely unable to replicate. (I.e. no one in their right mind would ever trust epic to maintain such a position)
Valve sure does show how to run PR from the design level out and does this by putting the squeeze on developers rather than users whenever it can.
I am not ok with that. I would much prefer a user friendly platform that is investing on more than its position as a dominant market force and putting more of the revenue back into the space where games are made.
Oh, and on being DRM-free, too.
So I don't need to trust Epic for anything, but I also don't need to trust Valve with a monopoly. Which is, of course, why I default to GoG, as I said.
Lol in what way are they "putting the squeeze" on developers aside from the 30% cut?
Also your prior comment that valve does nothing else is hilarious, the steam deck, steamOS, Proton, the valve index.
They do SO MUCH more.
Automatic save cloud syncing, steam remote play, steam link, the community forums, steam workshop.
Get your head out of your ass, no other platform comes close to feature parity and putting back into improving pc gaming.
Also steam DRM is laughably easy to circumvent and they haven't shown any interest in over a decade of doing anything about it.
Valve hasnt increased their %age since steams inception. you can argue its too high. but its certainly not a squeeze which requires an unnecessary and increasing rate that is detrimental to the developers.
its hilarious how well the publishers propaganda arm has influenced you to your own detriment. do you know much EA and other publishers demand as their cut? 50%. valve as a publisher is actually a fucking discount.
I do wonder just how much a policy like this would effect Valves bottom line though.
This would be pretty amazing for small studios.
Steam is amazing because of that 30%. That money goes into features that attract users which in turn brings publishers.
No other store has invested so much money on their platform. If you take that 30% off, you defund development.
That said, Steam has different percentage tiers for different amounts of sales. That could obviously be better or refined to give indies a better chance.
But I'm more than happy when Steam takes big chunk out of Rockstar, EA and Ubisoft for example.
Sure, but this just gives the publisher a bigger cut, developers and gamers will see absolutely no difference, as usual.
Developers do care about this. Investment on software is fleeing the market like crazy. Unless Valve has decided to go back to financing games, developers are desperate for publishers to get some cash flow these days.
Just curious what issues you're having with the Epic store. I've bought a few games now and thought the process was pretty smooth.
Honestly, it used to have much, much bigger functionality gaps than it currently does.
The things all major Steam competitors are missing are value added features Steam has been investing on for decades. Those aren't basic or fundamental, but you may miss things like their controller compatibility layer if you favor a Sony controller or their metadata layer if you use that a lot. And devs do get value from their dev back-end, that is true (although console digital distribution systems have similar features these days, albeit a bit less streamlined).
I don't think that extra value justifies a whole-ass monopoly, though.