Epic Games Store - the console war comes to PC

[MuscleSpark]

There ya go, they're going to fund and publish the games themselves, making the exclusivity justified and okay according to what you've all been saying.

Correct.

 

[Reinhardt]

There ya go, they're going to fund and publish the games themselves, making the exclusivity justified and okay according to what you've all been saying. The crisis is over!

We were saying this from the start, no?

 

[DalekFlay]

We were saying this from the start, no?

Yes, I wasn't being sarcastic. The smug emoji is just like a "they went and did it" thing, not a sarcasm signal. I don't personally see a major difference between funding an exclusive and buying one, from a consumer perspective, but it's a good change in strategy that should hopefully calm down people who were morally opposed rather than just Steam enthusiasts.

 

[markec]

I don't personally see a major difference between funding an exclusive and buying one, from a consumer perspective

There is a difference when a said exclusive is a kickstarted game that was kickstarted with promised Steam release.

Only that those people now had to wait for a year before playing their game.

 

[DalekFlay]

There is a difference when a said exclusive is a kickstarted game that was kickstarted with promised Steam release.

Yes, that was complete bullshit and I said so at the time. I mean in a general sense.

 

[Infinitron]

https://www.pcgamer.com/is-epics-publishing-deal-good/

Is Epic's publishing deal good?
Here's how Epic's game publishing terms stack up.

On top of everything else, Epic Games is now a publisher. Fortnite baron Tim Sweeney and company announced the news this week by outlining Epic's financial agreement with the developers it'll be working with, which include Remedy and Playdead. That would've been a weird way to announce a publishing wing for another company—most don't shout their contract terms from mountaintops—but we're getting used to it with Epic, which revealed its store in late 2018 by announcing an 88 percent revenue share for developers.

For those of us who don't make games ourselves, though, it isn't immediately obvious how Epic's proposal compares to other publishing deals. For starters, here's what Epic's announcement outlines, and a short explanation of what it means:

● Developers will have "full creative control" of their games. This claim is hard to assess without seeing the exact wording of the contract, but I'll mark it down as a commitment not to meddle with the creative details—a nice sentiment to start with.

● "Developers retain 100% of all intellectual property." In other words, the developer gives Epic a license to distribute its game and take its share of the revenue, but holds onto ownership of all the copyrighted code, character designs, art, and so on. Practically speaking, this means that if Remedy wanted to make a sequel to one of its Epic-published games, but didn't want to involve Epic, it could theoretically do that. (Give or take any stipulations laid out in the contract.)

● "Epic Games Publishing will cover up to 100% of development costs, from developer salaries to go-to-market expenses such as QA, localization, marketing, and all publishing costs." The "up to" suggests this will vary from contract to contract, but one of Remedy's press releases confirms that Epic is providing the entire budget for two of its games.

● "...Once costs are recouped, developers earn at least 50% of all profits." After Epic makes back its investment and covers retail, marketing, and other costs, it'll split the rest of the revenue 50/50. The "at least" here suggests that, in some cases, the developer will get a bigger net revenue share. In Remedy's case, it's 50/50.

How Epic compares to other publishers
After clocking the reactions on social media and talking to people in the industry, I've gathered that a 50/50 split is pretty good, and that developers retaining ownership of their intellectual property is very desirable but not aberrant. What makes Epic's offer exceptional is the part where Epic pays for the entire cost of development.

Another publisher's deal with Remedy makes for an excellent comparison: For investing €7.75 million into Remedy's development of Control (which cost between €20 and €30 million to make) and handling marketing and distribution, 505 Games secured publishing rights for 20 years. For that 20 year period, Remedy gets 45 percent of Control's "net revenue," which refers to revenue after the investment is recouped, retail costs, marketing costs, and so on.

Remedy's deal with Epic is clearly better. In both deals, Remedy keeps ownership of its intellectual property, but Epic is investing 100 percent of the development costs and paying 50 percent of the net revenue back. The numbers: they're bigger.

Practically, this means that if Remedy's new games flop and Epic never recoups its investment, Remedy won't have lost money, because Epic paid for the entire cost of development. The deal with 505 Games didn't even cover half of Remedy's development expenses, and took a 5 percent greater net revenue cut. Epic is bearing more of the risk.

Vlambeer co-founder Rami Ismail expressed awe at Epic's terms, saying that each bullet point exceeds industry standards. "I have rarely heard of anything even close to this," he tweeted.



Publisher Devolver Digital jokingly took offense at Ismail's comment, and tells PC Gamer that its publishing terms are "similar to those proposed by Epic." It offers a 70/30 revenue split, with the larger portion going to the developer.

That's obviously better than the 50/50 deal Epic has with Remedy, but we can safely guess that Epic is investing a lot more money into Remedy than Devolver put into, say, the development of Hotline Miami, which was made by two people. The kinds of games Epic is funding can cost tens of millions of dollars to make, and again it's that commitment to 100 percent funding that makes the whole deal stand out.

Nightdive Studios director of business development Larry Kuperman, who has worked in the industry for two decades, says that Epic's terms seem "very favorable"—but also notes that the devil is in the details, which we don't have many of.

For instance, most publishers tie funding to milestones, which can frustrate developers. "This seems straightforward, but in practice, it impacts the course of development," says Kuperman. "You do things in the order that gets you paid rather than what makes the most sense in your opinion."

Does Epic's guarantee of creative control and full development funding mean that it's taking a different, maybe better, approach to game production itself? We don't know. For now, Epic says it's only discussing what's in the announcement and that it will "share additional information in the future."

What does Epic Games Publishing mean for PC gamers?
Epic is funding the development of two new Remedy games (Remedy says one of them is its "most ambitious" yet), a game from Limbo creator Playdead, and a game from GenDESIGN, which includes some of the people behind PlayStation 2 classics ICO and Shadow of the Colossus. So, it's good news, at least if you want to see what those famous developers create with their finances covered and the promise of total creative control. I definitely do.

The three deals announced so far aren't the only publishing contracts Epic has signed, either. "Additional information, development partners, and games will be announced in the coming months," it says.

Because Epic is publishing these games, it's obviously likely that they'll be Epic Store exclusives on PC—but we don't know that for sure. For one thing, we don't know if Epic will still be doing store exclusives when these games release. A lot can change over the several years it takes to develop a game. (Just a few years ago, the Epic Store didn't even exist.)

Even if Epic Store exclusives remain a thing, I'd expect timed exclusivity for these games. Epic wouldn't be a very good publisher if it didn't do everything it could to turn a profit for itself and its developers, and so I'd expect to see year-long exclusivity periods at most—the same as it's been doing with other games. It'll have to negotiate with itself on that one.

As for whether the game publishing industry as a whole will shift in response to Epic's publicized terms, I think it's too early to say. Epic can't publish every developer's game, and given how much money it's putting down for each, I have to assume it'll be selective. Meanwhile, Steam didn't adopt the Epic Store's more generous revenue model just because Epic said it was fairer and snagged some exclusives—and as far as I can tell, Steam and Valve are doing just fine.

For now, I'm just glad to see that Epic is investing some of its revenue into developers, taking risks rather than growing conservative and sitting on its Fortnite cash (or perhaps swimming in it, Scrooge McDuck style). Obviously a company worth billions doesn't do anything just to be altruistic, but if Remedy and other developers truly do find a better source of funding in Epic, that's good news to me.

 

[Sentinel]

hmmm. a company funded by epic doing articles on them...
wonder if it's worth reading...

 

[A horse of course]

I'm sick of seeing that fucking twat Rami Ismail's twatter posts everywhere.

 

[MadMaxHellfire]

i swear this is what i read:

Epic is fucking the development of two new Remedy games

 

[Multi-headed Cow]

There ya go, they're going to fund and publish the games themselves, making the exclusivity justified and okay according to what you've all been saying. The crisis is over!

Though the numbers themselves seem a little suspect, but it depends on the type if games people are making and their expected sales I suppose. Epic covers your development costs, marketing, etc (Note: it says UP TO 100%, so they may not even cover all of it) but that just eats into your revenue, since you get jack shit until Epic's gotten their money back from covering development. Once you've sold enough for Epic to cover that, you get 50% of the profit on each sale, so that's presumably after any cuts from storefronts and everything. So if you're making a small game it's a safer bet, since if your 2D platforming roguelike about being a gay teenager in the 80's doesn't sell well you're not out of pocket on money, just time. But if you make something that sells like gangbusters then you'll sorely wish you made it out of pocket so you were just losing 30% on Gaben's store rather than 30% cut from store and then 50% cut from Epic on the remainder. As far as publishing deals go though it sounds good. Takes a lot of risk off the developer. And keeping all the rights to everything is big of course.

 

[passerby]

So if you're making a small game it's a safer bet, since if your 2D platforming roguelike about being a gay teenager in the 80's doesn't sell well you're not out of pocket on money, just time.

You are not out of time, you've got paid for your job.

But if you make something that sells like gangbusters then you'll sorely wish you made it out of pocket.

If something sells like gangbusters, then 50% is plenty, so no sane personr wish for that. Usually people won't find an investor that will give all the money for 50% profit cut though, but are so passionate about their bussiness/product idea, that against better judgement put on the line a 10 years worth of work and savings from minimalistic lifestyle, get zeroed out and suicide. The only issue to consider is whether something can sell great on Epic store, this is the only questionable part.

 

[Multi-headed Cow]

You are not out of time, you've got paid for your job.

True, but that's why I said you're not out of pocket on money. For small developers you aren't eating ramen and stealing ketchup packets from fast food joints to develop your game even if it ends up flopping. And for larger more mid-tier developers like Remedy it keeps the lights on even if a game flops and the only real lasting damage is to their reputation if they release a stinker. I was mainly talking about small/solo developers in that example though, and my gut tells me that someone cranking out an indie game that looks appealing enough for Epic to agree to publish it probably is going to spend more time/effort on it than if they just got a regular 9 to 5 job, so whatever Epic determines is an acceptable salary for X years of development is probably still harder work than doing something else, which is what I was getting at. And also why I still said it sounds like a good deal.

If something sells like gangbusters, then 50% is plenty, so no sane personr wish for that. Usually people won't find an investor that will give all the money for 50% profit cut though, but are so passionate about their bussiness/product idea, that against better judgement put on the line a 10 years worth of work and savings from minimalistic lifestyle, get zeroed out and suicide. The only issue to consider is whether something can sell great on Epic store, this is the only questionable part.

No sane person would wish for that? That sounds downright un-American. I got my eye on you. And don't forget that 50% is AFTER Epic's taken a full reimbursement for the development/marketing/etc costs. Still not saying it's a bad deal by any means, but if your game does end up selling well then you have to wait for all your gravy train money to get paid off first, then they start milking you for half the profits. The big thing is it removes almost all risk from the developer's side, which is great, but if indie devs are bitching about the oppressive yoke of 30% of Steam sales going to Valve then in the event they make a successful game with this they'll be losing that 30% (Provided the contract allows them to sell on Steam) and then 50% of the remainder after all development costs are paid back to Epic.

 

[DalekFlay]

I think it says a lot about the industry that it's supposedly a sweetheart deal compared to most.

 

[rusty_shackleford]

I think it says a lot about the industry that it's supposedly a sweetheart deal compared to most.

Publisher takes all the risk. Devs don't finish, they lose their investment. Game doesn't do well, good chance they won't even recoup their investments, etc.,
Just look at this list, it's basically a graveyard: https://en.wikipedia.org/wiki/List_of_video_game_publishers
The video game industry may be extremely large, but the massive majority of profits are made from a tiny minority of games -- Fortnite alone made up more than 2% of all video game revenue in 2018.

Also, if it involves publishing the games to consoles there's a lot of bullshit involved(less so now, but still a lot.) There's a reason Gabe criticized Sony so heavily.

 

[J1M]

You are not out of time, you've got paid for your job.

True, but that's why I said you're not out of pocket on money. For small developers you aren't eating ramen and stealing ketchup packets from fast food joints to develop your game even if it ends up flopping. And for larger more mid-tier developers like Remedy it keeps the lights on even if a game flops and the only real lasting damage is to their reputation if they release a stinker. I was mainly talking about small/solo developers in that example though, and my gut tells me that someone cranking out an indie game that looks appealing enough for Epic to agree to publish it probably is going to spend more time/effort on it than if they just got a regular 9 to 5 job, so whatever Epic determines is an acceptable salary for X years of development is probably still harder work than doing something else, which is what I was getting at. And also why I still said it sounds like a good deal.

If something sells like gangbusters, then 50% is plenty, so no sane personr wish for that. Usually people won't find an investor that will give all the money for 50% profit cut though, but are so passionate about their bussiness/product idea, that against better judgement put on the line a 10 years worth of work and savings from minimalistic lifestyle, get zeroed out and suicide. The only issue to consider is whether something can sell great on Epic store, this is the only questionable part.

No sane person would wish for that? That sounds downright un-American. I got my eye on you. And don't forget that 50% is AFTER Epic's taken a full reimbursement for the development/marketing/etc costs. Still not saying it's a bad deal by any means, but if your game does end up selling well then you have to wait for all your gravy train money to get paid off first, then they start milking you for half the profits. The big thing is it removes almost all risk from the developer's side, which is great, but if indie devs are bitching about the oppressive yoke of 30% of Steam sales going to Valve then in the event they make a successful game with this they'll be losing that 30% (Provided the contract allows them to sell on Steam) and then 50% of the remainder after all development costs are paid back to Epic.

The average number of games made by a game studio is one. ONE. Because they go under so frequently. Eliminating the risk of failure, getting to build your dream game, and securing 50% royalties is an amazing deal.

 

[DalekFlay]

Publisher takes all the risk. Devs don't finish, they lose their investment. Game doesn't do well, good chance they won't even recoup their investments, etc.,
Just look at this list, it's basically a graveyard: https://en.wikipedia.org/wiki/List_of_video_game_publishers
The video game industry may be extremely large, but the massive majority of profits are made from a tiny minority of games -- Fortnite alone made up more than 2% of all video game revenue in 2018.

You tagged disagree, but I'm in agreement really. By "says something about the industry" I mainly meant volatility. You laid it out better though, tip o' the cap.

 

[rusty_shackleford]

Publisher takes all the risk. Devs don't finish, they lose their investment. Game doesn't do well, good chance they won't even recoup their investments, etc.,
Just look at this list, it's basically a graveyard: https://en.wikipedia.org/wiki/List_of_video_game_publishers
The video game industry may be extremely large, but the massive majority of profits are made from a tiny minority of games -- Fortnite alone made up more than 2% of all video game revenue in 2018.

You tagged disagree, but I'm in agreement really. By "says something about the industry" I mainly meant volatility. You laid it out better though, tip o' the cap.

Woops, misunderstood you and thought you were implying publishers are purposely giving game devs a raw deal.
Most publishers are shit, but they also take on a lot of risk -- especially when financing newer studios.

 

[passerby]

No sane person would wish for that? That sounds downright un-American. I got my eye on you. And don't forget that 50% is AFTER Epic's taken a full reimbursement for the development/marketing/etc costs. Still not saying it's a bad deal by any means, but if your game does end up selling well then you have to wait for all your gravy train money to get paid off first, then they start milking you for half the profits. The big thing is it removes almost all risk from the developer's side, which is great, but if indie devs are bitching about the oppressive yoke of 30% of Steam sales going to Valve then in the event they make a successful game with this they'll be losing that 30% (Provided the contract allows them to sell on Steam) and then 50% of the remainder after all development costs are paid back to Epic.

Yes, no sane person would wish to start a risky business with their own savings, as opposed to getting a financieer in exchange for 50% profits and would do it only out of necessity, you are clueless about making business.
The devs retain all intellectual property, if it's a success, then they can make a sequel with this 50% profit cut on their own.

If you have plenty of money, you can loose some of it on a failed venture, it doesn't matter. If you put a decade worth of work and savings on the line, it's far more important to not get zeroed out, than to make a truckload of money.
The best way to start a business, without fucking up anyones life, is if a person who wants to get job done, meet a person with excess of money and it's a very American way from my understanding.

 

[Black Angel]

So does that 88/12 thingy worked out or nah?

 

[passerby]

88/12 thingy is fine but not enough alone, they failed mostly because they've announced in advance these are all timed exclusives, or didn't pay enough to make them permanent exclusives.
They should just kept the timed nature of exclusives secret and wait to see what happens, there was literally no advantage to announcing it in advance and I can't wrap my head around why they did it.

They're also bloating the store with non exclusive indie trash, that no one buys and dillute the exposure exclusives get there.
They should have a separate section with only exclusives at the top of the store page and the rest of the games below it.

 

[rusty_shackleford]

Here's the problem with the 88/12 cut: If the store is taking less, why do I have to pay the same for games? Shouldn't they be passing some of those savings onto the customer?
And the answer to those questions are why you shouldn't care at all about the 88/12 cut.

 

[J1M]

Here's the problem with the 88/12 cut: If the store is taking less, why do I have to pay the same for games? Shouldn't they be passing some of those savings onto the customer?
And the answer to those questions are why you shouldn't care at all about the 88/12 cut.

They didn't do a good job of explaining to the consumer that it's about keeping the studios you like alive. The way they approached it was, as you said, about "savings" and the implication that it would lower the cost of games.

Not an easy thing to explain. Most people assume that "fun game" translates to "rich and famous developers" instead of "made $30k/year as indie game dev, not sure if I should keep doing this".

Though that's entirely the fault of Epic and the studios parroting their talking points.

 

[DalekFlay]

Metro 3 did launch at $50, I believe. No one else followed suit though.

To be fair to Epic they have consistently said they're more about giving developers more money and freedom. They haven't really said jack shit about helping consumers, to my memory. Obviously this isn't the best pitch to consumers, but give them credit for being consistent I guess.

 

[J1M]

Metro 3 did launch at $50, I believe. No one else followed suit though.

To be fair to Epic they have consistently said they're more about giving developers more money and freedom. They haven't really said jack shit about helping consumers, to my memory. Obviously this isn't the best pitch to consumers, but give them credit for being consistent I guess.

I disagree. When they blast out press releases and give interviews to game "journalists" they are speaking to consumers. There are more effective ways to spread news to dev studios about why your store is attractive.

 

[DalekFlay]

I disagree. When they blast out press releases and give interviews to game "journalists" they are speaking to consumers. There are more effective ways to spread news to dev studios about why your store is attractive.

I mean, I don't think they're being effective but their main message has always seemed to me to be "Steam is bad for developers, we're gonna make it better." They might be pitching that to consumers hoping they will care, but that's their message isn't it? Not saying they're right by any means, by the way, just that it's their pitch.