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During Gamelab 2019 at a panel hosted by GamesIndustry.biz, Paradox Interactive's former CEO Fredrik Wester (now the Executive Chairman of the Board at Paradox Interactive) talked about the cut "platform holders" take from sales and they're not impressed.

The one this always comes back to is Valve's store Steam, which has a standard 30% cut they take from developers. Although, they did tweak this for higher earning games in December last year so for games that earn $10 million it's reduced to 25% and 20% at $50 million and that does include money from DLC, in-game transactions, Steam market fees and so on.

Wester said "I think the 70/30 revenue split is outrageous", noting that it was likely established in the '70s by Warner Bros when distributing physical media like boxed VHS tapes and so on saying "That was physical. It cost a lot of money". Wester went on to say "This doesn't cost anything." and thanked Epic Games for what they're doing with their much smaller 12% cut.

Claiming it "doesn't cost anything" isn't quite right though, considering all the services Steam actually provides including things like Cloud Saving, Achievements, Leaderboards, Valve Anti-Cheat (VAC), Inventory Services and quite a bit more. Valve also provide free keys to developers to sell on other stores like itch.io, Humble Store, Fanatical and many others (there's a huge amount of Steam key stores out there) of which Valve don't see a penny from. That's on top of various open source projects Valve fund too like DXVK, improving KWin and a ton more those are just two very recent examples.

Wester isn't the only one who has mentioned this of course, former Valve staffer Richard Geldreich said on Twitter back in April:

Steam was killing PC gaming. It was a 30% tax on an entire industry. It was unsustainable. You have no idea how profitable Steam was for Valve. It was a virtual printing press. It distorted the entire company. Epic is fixing this for all gamers.

The State of the Industry Survey done by GDC also noted how only 6% of developers asked thought Valve's 30% cut was justified.

What are your thoughts?

Hat tip to Mr. Doomguy in Discord.

Article taken from GamingOnLinux.com.
Tags: Editorial
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F.Ultra Jul 3, 2019
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  • Supporter
Quoting: Purple Library Guy
Quoting: F.Ultra
Quoting: Tuxee
QuoteWhat are your thoughts?

That Wester is either an idiot or a hypocrite. I'd go for the latter.

I would more say that he is speaking from the viewpoint of his own company, it's of course in Paradox best interest to keep their own prices as high as possible while having to pay as little as possible to others like Valve. That is hardly being a hypocrite.
Just because being a hypocrite is solidly in your best interests does not make it stop being hypocrisy.

So what does his hypocrisy consist of? AFAIK he is not imposing a 30% cut of other companies to use the Paradox store?!
Munk Jul 3, 2019
What's 100% of $0?

I buy games on Steam because I want them in my Steam library, specifically. I would rather have a game through Steam than GoG or direct from the publisher, because I know the servers are fast, reliable, updates are automatic, proton is integrated, community content is facilitated for, etc.

If you're not selling your game on Steam, there's a very good chance I'm not going to buy it. I'm just being honest.

Paradox can complain all they want, but the harsh reality is, I'm not alone in my significant Steam preference. It's a wrongheaded assumption to make to think that sales on one platform are the same as sales on another. I may buy your game on Steam. I will never buy your game on EGS, Origin, and likely not on GoG.
Mal Jul 3, 2019
  • Supporter
Quoting: MunkI will never buy your game on EGS, Origin, and likely not on GoG.

Careful, that exactly the message that Epic is trying to pass. Which is blatant lie.

The day Steam competitors offers the same/equally worth/better features, people will naturally buy games from there too. It's a matter of value proposition. There is people who doesn't like Steam and value more GoG for instance. Other people would likely be happy to buy from present day EGS if they were discounted the value of missing features from the front price. That is way nobody has tried before (ofc they don't, in the end it's all about raping customers, not about fair deals).

In case of Paradox for instance if they put together a service with friends, multiplayer, mods, save cloud, guides/forums, automatic updates and patch management and such I'd say they would already have a compelling case for them going by themselves (though I would still miss streaming in my case and controller profiles for niche games like Magicka2, I absolutely love how they used Steam Controller api in that game it's fantastic). Ofc all that stuff costs and so 12% (which already do not contain transaction fees in Epic implementation, so they do sell at higher prices) becomes a chimera.


Last edited by Mal on 3 July 2019 at 1:52 pm UTC
sketch Jul 3, 2019
not only it has huge expenses, but have anyone ever stop and actually think that steam is a service to provide every game, for ever and ever, anytime you need it? in 10 years they will still need to deliver the 60gb game to the one in need to download it. that's the deal you make as a buyer when you buy games on steam, and even if no one can be sure for this to happen, that's the business in which valve is in and for to guarantee it you need a steady revenue coming only from the sales, you can't and shouldn't rely on the CURRENT ones, but you need a SOLID business, capable of sustaining itself for the time being. That's the same reason why Google is a so much believable player in the gaming business even if they are stupidly new to it: it's gaming branch it's already worth more, in stock value, than the whole NVIDIA. The capability to LAST in time is the majour SERVICE to the users they can provide. The Epic Store revenue cut wouldn't make it last a second beyond this stage of NEW and UPCOMING games. Epic is only a joke and a direct attack to consumers by big producers who only try to maximize profit.


Last edited by sketch on 3 July 2019 at 2:44 pm UTC
namiko Jul 3, 2019
Quoting: Mal
Quoting: MunkI will never buy your game on EGS, Origin, and likely not on GoG.
Careful, that exactly the message that Epic is trying to pass. Which is blatant lie.

The day Steam competitors offers the same/equally worth/better features, people will naturally buy games from there too.
There are also other considerations. AAA developers and publishers think (mostly correctly) that they have people by the balls, that they've gotten people hooked on a franchise/dev team/genre and the only thing to do is follow them wherever, however, they go.

I'm not like that. I'm still pissed at EA for Mass Effect 3 becoming an Origin-only title. I'm still pissed at developers acting like they can stomp on their customers because a series is beloved, so they get lazy and fuck up the game, insult their customers, give it too many DLC so that you have to pay over $100 total to have a complete game, change the mechanics, the characters, because they know people need their "fix" and will buy the game in droves anyways.

In this specific case, Epic has made a dick move doing exclusivity deals. I understand devs wanting more money up-front, but in the long run, they've probably lost the good will of people like me who deliberately watch what they do in the long run.

Steam looks a lot better in comparison, the only exclusives they have are their own games and any games made from their own assets (ie. Black Mesa, Portal Stories: Mel). (For the record: I'd buy from GOG, itch.io or maybe Nutaku if I had no other choice of storefront for a game.)

Munk is making a good point, there are people that are extremely loyal to Steam and I'm also one of them. But it's more nuanced than good service for me, because I want to punish bad actors in the industry with a lack of money. I believe Steam is the best overall, the best storefront for Linux gaming, and Valve themselves support the development of software and hardware that greatly benefits we Linux gamers, though Steam is definitely not perfect (censorship, reducing the sometimes-warranted effects of review bombs by legitimate customers).

Even if Epic does grow to a big storefront that also supports Linux, I'm not going to forget what they did now. They're banking on people forgetting in the long run, but I won't be one of those people.
tonR Jul 3, 2019
Quoting: SalvatosI'm speechless. It's like you intended to post this to a completely different community. Take it easy, mate.
The problem here is some "elitist" (Publs, devs, some ignorance journalist and so-called gaming fans, etc. etc.), accused us the "3rd world citizens" (I'm using that term on purpose) as pirates! They accused or "called" us too poor to buy their games.

I was former "sailor", I was a loyal customer of "pasar malam" CD/DVD either games or films, and I'd been a part of so-called "illegal analog hole" community. You know why? Because of service. Buying their product was either hard or almost impossible. Valve's Steam changed it for us either you like it or not.

Best part of Steam, they offers various types of payment, local or international. Either credit card, pay via mobile phone credits/bill, and hell, even on cash on delivery! Explained on this reddit post. (reddit link)

I know some indie devs (not so-fucking-called "indies" backed by big publs) are poor (or even poorer than me). That's why I always check their games are available on itch.io first and then if available I buy it from there. Most itch.io games always includes Steam keys, so theorically I got 2 copies in one price even do it's always 2-3 times more expensive than my "local" Steam.

For example Slipstream : (Steam link)

On itch: USD 9.99 (or RM 41.34) (itch link)
On Steam, non discount : RM 23.50 (or USD 5.68) (steamdb link)
Purple Library Guy Jul 3, 2019
Quoting: F.Ultra
Quoting: Purple Library Guy
Quoting: F.Ultra
Quoting: Tuxee
QuoteWhat are your thoughts?

That Wester is either an idiot or a hypocrite. I'd go for the latter.

I would more say that he is speaking from the viewpoint of his own company, it's of course in Paradox best interest to keep their own prices as high as possible while having to pay as little as possible to others like Valve. That is hardly being a hypocrite.
Just because being a hypocrite is solidly in your best interests does not make it stop being hypocrisy.

So what does his hypocrisy consist of? AFAIK he is not imposing a 30% cut of other companies to use the Paradox store?!
I feel like backing up a moment and talking about what hypocrisy is. If you don't agree with me on that, then obviously we're going to see different things as hypocrisy. To me, hypocrisy is when people morally condemn the same or similar actions in some cases but not others, usually precisely because they are speaking "from the viewpoint of" their personal (not necessarily monetary) gain. It's a violation of the "what's sauce for the goose is sauce for the gander" principle. Refraining from hypocrisy requires speaking not "from the viewpoint of your own company" but rather from the viewpoint of principle. That may seem like an unreasonable requirement, but it only kicks in if you're making ethical or normative claims--of course those should be based on principle because you can't have it both ways; if you want to talk from your parochial interests then you have no business bringing morality into it.

So here we have a guy who clearly charges what the traffic will bear for his products, condemning Valve for charging what the traffic will bear . . . and doing so in a disingenuous fashion which makes what are pretty clearly knowingly false claims about Valve's (lack of) expenses. So, clearly his condemnation is not made out of genuine moral impulses--he knows he's lying and he knows he'd do the same because he more or less does; he's just trying to put some pressure on Valve in hopes of getting a price break. The details are different, and no doubt he could defend his pricing practices, but he's making false claims about Valve's so it would appear he doesn't care about that kind of fairness. And of course another element of hypocrisy there is that he would surely object strenuously if someone claimed to him that all those DLCs cost Paradox nothing to make.

Seems to me like he's pretty clearly treating the Valve case very differently in terms of rhetoric and moral judgment than he would treat his own. And he is doing so in the interest of monetary gain. So that's hypocrisy.

If he just said "Valve's cut costs my company more than we want to pay, we don't want to pay it so we'd rather they reduced it" then he would be talking about his company's interests but not making a moral judgment and so would not be open to accusations of hypocrisy. One thing I find interesting is that in a world which is supposedly all about the dollars and cents, where the official ethos of the market is that there is no such thing as morality and profit is its own justification, CEOs very often end up reaching for ethical claims because in the end, no matter how much our system tries to explain them away, they remain compelling.
Salvatos Jul 3, 2019
Quoting: tonR
Quoting: SalvatosI'm speechless. It's like you intended to post this to a completely different community. Take it easy, mate.
The problem here is some "elitist" (Publs, devs, some ignorance journalist and so-called gaming fans, etc. etc.), accused us the "3rd world citizens" (I'm using that term on purpose) as pirates! They accused or "called" us too poor to buy their games.
I understand, but the post I quoted was basically throwing a fit at everyone here at GoL for siding with EGS (?) even though we have plenty of users from such countries and we almost all see EGS as an adversary. It's just weird.
F.Ultra Jul 3, 2019
View PC info
  • Supporter
Quoting: Purple Library Guy
Quoting: F.Ultra
Quoting: Purple Library Guy
Quoting: F.Ultra
Quoting: Tuxee
QuoteWhat are your thoughts?

That Wester is either an idiot or a hypocrite. I'd go for the latter.

I would more say that he is speaking from the viewpoint of his own company, it's of course in Paradox best interest to keep their own prices as high as possible while having to pay as little as possible to others like Valve. That is hardly being a hypocrite.
Just because being a hypocrite is solidly in your best interests does not make it stop being hypocrisy.

So what does his hypocrisy consist of? AFAIK he is not imposing a 30% cut of other companies to use the Paradox store?!
I feel like backing up a moment and talking about what hypocrisy is. If you don't agree with me on that, then obviously we're going to see different things as hypocrisy. To me, hypocrisy is when people morally condemn the same or similar actions in some cases but not others, usually precisely because they are speaking "from the viewpoint of" their personal (not necessarily monetary) gain. It's a violation of the "what's sauce for the goose is sauce for the gander" principle. Refraining from hypocrisy requires speaking not "from the viewpoint of your own company" but rather from the viewpoint of principle. That may seem like an unreasonable requirement, but it only kicks in if you're making ethical or normative claims--of course those should be based on principle because you can't have it both ways; if you want to talk from your parochial interests then you have no business bringing morality into it.

So here we have a guy who clearly charges what the traffic will bear for his products, condemning Valve for charging what the traffic will bear . . . and doing so in a disingenuous fashion which makes what are pretty clearly knowingly false claims about Valve's (lack of) expenses. So, clearly his condemnation is not made out of genuine moral impulses--he knows he's lying and he knows he'd do the same because he more or less does; he's just trying to put some pressure on Valve in hopes of getting a price break. The details are different, and no doubt he could defend his pricing practices, but he's making false claims about Valve's so it would appear he doesn't care about that kind of fairness. And of course another element of hypocrisy there is that he would surely object strenuously if someone claimed to him that all those DLCs cost Paradox nothing to make.

Seems to me like he's pretty clearly treating the Valve case very differently in terms of rhetoric and moral judgment than he would treat his own. And he is doing so in the interest of monetary gain. So that's hypocrisy.

If he just said "Valve's cut costs my company more than we want to pay, we don't want to pay it so we'd rather they reduced it" then he would be talking about his company's interests but not making a moral judgment and so would not be open to accusations of hypocrisy. One thing I find interesting is that in a world which is supposedly all about the dollars and cents, where the official ethos of the market is that there is no such thing as morality and profit is its own justification, CEOs very often end up reaching for ethical claims because in the end, no matter how much our system tries to explain them away, they remain compelling.

Thanks for clarifying your position! Laying out the details the way you did here I think that I agree with your position to 100%.
cprn Jul 3, 2019
"Epic is fixing it" while they have money... But they'll have to start making it at some point. And those extra data centres aren't free. Things like power, storage, transfer, backup, people and hardware redundancy cost a little fortune. That debt will sooner or later have to be paid. By us. So lets not fall in love yet. With any side.


Last edited by cprn on 3 July 2019 at 10:29 pm UTC
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