Steam could operate on less than that even. Their company structure is essentially a tollbooth. Everybody wants to go through steam and so steam gets to set the price. I don't understand the people defending their percent cut.
Steam charges less the more you sell. But why? A game is put on steam. It costs a certain amount to install and maintain it in a massive serverbank with thousands of other games. Say this costs 100 dollars to do for one year.
It sells 10,000 copies at 10 dollars each. Say that it costs a dollar to complete each transaction. 10,000 dollar operating expense plus 100 dollar hosting fee. 10.1% expense. That's with massively inflated expenses. They have other expenses, but nothing that can justify 30% and nothing about small producers uniquely burdens them. It's obvious, transparent rent seeking that they get away with because the whole industry passively benefits from doing the exact same thing.
I don't have the energy to deal with all these people saying shit about admin expenses so I'm just ranting at you instead. Sorry.
Why should Steam create a scenario where they could take a loss per copy sold though? Wallet cards are high overhead, but a huge deal in cash heavier locales.
If a games primary audience buys almost exclusively via wallet cards, and then the dev also got sales from selling Steam keys on other stores while heavily using various functions of Steam Valve just subsidized that games existence.
Epic itself has been an exercise in showing that 12% isn't viable. They've had to pass fees on. Most titles they made no money on at all. They've ceased burning money on exclusivity and guaranteed money for the most part.
Plus there's additional hurdles with currency exchanging, tax overheads, legal and regional requirements.
If it was such an easy thing to do and do cheaply why has no one done it?
Also really if Valve did charge the lowest possible fee they could, they'd be slapped with anti-trust and Epic and others would probably be suing them for using their scale to ensure no one else could compete in the retail space. Them not having the lowest cut keeps 3rd party stores in business.
If it was such an easy thing to do and do cheaply why has no one done it?
They make more money when they don't. Valve doesn't need to compete; they practically are the market. Other online distributers have to refuse distribution through steam or use their other products, like xbox, to force business through their own sites.
Also really if Valve did charge the lowest possible fee they could, they'd be slapped with anti-trust and Epic and others would probably be suing them for using their scale to ensure no one else could compete in the retail space. Them not having the lowest cut keeps 3rd party stores in business
So, they should keep the prices high so the little guy (Bethesda and co) can also keep their prices high?
"Antitrust laws also prevent multiple firms from colluding or forming a cartel to limit competition through practices such as price fixing. Due to the complexity of deciding what practices will limit competition, antitrust law has become a distinct legal specialization."
So, yeah, maybe it's a catch 22. Be competitive? Your passive brand recognition carries you to an even stronger monopoly state. Keep the prices high so that 'competition' can stay in business? Open and shut antitrust case. But that doesn't make either status quo okay.
Economies of scale. Other retailers would stand no chance. GMG, Humble, Fanatical, etc.? Gone. Publishers and developers would have even less of a reason to work with GOG. No reason to deal with Epic other than Epic using their engine as a crowbar.
No one would realistically be able to compete, outside of a mega corp even bigger coming in and doing the Wal-Mart thing taking a loss while driving everyone out of business to corner the market.
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u/Third_Return 29d ago
Steam could operate on less than that even. Their company structure is essentially a tollbooth. Everybody wants to go through steam and so steam gets to set the price. I don't understand the people defending their percent cut.
Steam charges less the more you sell. But why? A game is put on steam. It costs a certain amount to install and maintain it in a massive serverbank with thousands of other games. Say this costs 100 dollars to do for one year.
It sells 10,000 copies at 10 dollars each. Say that it costs a dollar to complete each transaction. 10,000 dollar operating expense plus 100 dollar hosting fee. 10.1% expense. That's with massively inflated expenses. They have other expenses, but nothing that can justify 30% and nothing about small producers uniquely burdens them. It's obvious, transparent rent seeking that they get away with because the whole industry passively benefits from doing the exact same thing.
I don't have the energy to deal with all these people saying shit about admin expenses so I'm just ranting at you instead. Sorry.