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  1. Paradox exec: Steam’s 30% fee is “outrageous” Wester says modern game distribution "doesn't cost anything" compared to retail model. Aurich Lawson Paradox Interactive (Cities: Skylines, Surviving Mars) seems to be getting fed up with the "standard" 30% fee on sales charged by Steam and many other game platforms. Speaking at a Gamelab panel hosted by GamesIndustry.biz last week, Paradox Chairman of the Board and former CEO Fredrik Wester called that state of affairs "outrageous," adding, "I think the platform holders are taking too much money. Everyone in the press here, just quote me on that." The 30% fee baseline, Wester argues, can trace its origins back to the economics of the home video market in the 1970s, when studios like Warner Bros. negotiated similar fees with retailers selling early VHS tapes. "That was physical. It cost a lot of money," he said. "This doesn't cost anything. So Epic has done a great job for the whole industry, because you get 88 percent. Fantastic move. Thank you very much." Saying that it "doesn't cost anything" for stores like Steam to distribute and service a game is going a bit far. Beyond the simple costs associated with processing payments and providing download bandwidth, platforms often provide everything from multiplayer APIs to achievement and leaderboard systems to anti-cheat services and a whole host of other useful features. The Epic Game Store, with its undercutting 12% fees, does not provide many of these features as of yet (but the company does have a public roadmap for adding many of them in the near future). Platforms like Steam may also pocket substantially less than 30% of a game's total sales once you take into account the "free" keys that publishers often distribute via other means. Yet those platforms have to provide services even for game sales that don't provide them any direct revenue. None of that means a 30% platform fee standard is necessarily justified or sustainable, though. Epic CEO and co-founder Tim Sweeney recently said on Twitter that his company's controversial strategy of buying up exclusives for the Epic Game Store is a necessary move to break that market standard. The extra 18% of revenue publishers get under Epic's 88/12 split will lead to reinvestment and price reductions that will benefit the entire ecosystem, he argued. "The 30% store tax usually exceeds the entire profits of the developer who built the game that's sold," Sweeney writes in the thread. "This is a disastrous situation for developers and publishers alike, so I believe the strategy of exclusives is proportionate to the problem. If the Epic strategy either succeeds in building a second major storefront for PC games with an 88/12 revenue split, or even just leads other stores to significantly improve their terms, the result will be a major wave of reinvestment in game development and a lowering of costs." Source: Paradox exec: Steam’s 30% fee is “outrageous” (Ars Technica)
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