Just days after Epic Games’ phenomenally successful Fortnite cleared 200 million registered users, the studio has announced that it is opening an online gaming store.
When you you have already acquired an audience the size of Fortnite’s, that is a step with vast potential to disrupt the ecosystems of the global games industry.
For over a decade, the Steam store has dominated PC gaming; and had an influence that has shaped the way games are designed, distributed, and marketed. Steam has arguably been the foundational ecosystem on which the indie gaming revolution prospered; and it has allowed its creator Valve to stand as an influential force in the emerging VR industry.
Just like Epic, Valve started out as a game developer, becoming famous through series like the iconic Half-Life shooters. With Steam, Valve has spent 15 years leading the way PC games are digitally distributed – and, until now, it has had little reason to worry about threats to its dominance. Arguably, Steam was a significant turning point that moved the piracy-crippled PC sector of the early-to-mid 2000s back on track and en route to success.
But now Epic is moving in on the digital distribution space. Epic, of course, has always done more than make games. While it is behind bolted blockbusters like Gears of War and Unreal Tournament, the studio is perhaps more influential through its Unreal Engine, which is one of the most prolifically used game development tools there is.
And now, with imminent opening of the Epic Games Store, it is offering developers 88% of the revenues of games sold on the marketplace. That is significantly more generous than the standard 70/30% revenue split Steam’s business is built around.
The Epic store, MCV reports, will consist of a devoted launcher for the studio’s own games, along with an integrated store to support third-party titles. The store will also waive the 5% royalty fee applied to Unreal Engine-developed games, if they are sold on the new store. Not that Epic will limit its store to Unreal-created games. We will even see games there that use Unity, the main engine rival to Unreal.
And, according to Epic founder and CEO Sweeney, who spoke to MCV, the store came from all the learnings around monetising Fortnite.
“While running Fortnite, we learned a lot about the cost of running a digital store on PC”, stated Sweeney. “The math is quite simple: we pay around 2.5% to 3.5% for payment processing for major payment methods, less than 1.5% for CDN costs (assuming all games are updated as often as Fortnite), and between 1% and 2% for variable operating and customer support costs.
“Fixed costs of developing and supporting the platform become negligible at a large scale. In our analysis, stores charging 30% are marking up their costs by 300-400%”, he added, asserting that the 88/12% split will still make for a profitable business for Epic.
If the store were coming from almost any other developer, there would be less reason to imagine it can trouble Steam’s dominance. But since Epic evolved from wildly successful developer, publisher, and tools provider into the creator of a true global cultural phenomenon, anything could happen. It’s been a very good 15 years for Valve, and the industry owes them much. But all of a sudden, the future is anybody’s game. Or Epic’s game.
The exact workings of the Epic Games Store do remain a mystery, but Sweeney has confirmed to GamesIndustry.biz that it will support free-to-play, noncommercial titles and mods, along, of course, with premium-priced releases. In the same interview, he revealed that Epic will fund a curated selection of commercial games made available for free through the store.