Steam went live in 2003, five years before the App Store debut. It was Valve’s attempt to simplify the upgrade process for its own games – in particular Counter-Strike – with a pipeline for software solutions embedded directly in the client. Steam valve became mandatory with the release of Half-Life 2 in 2004, and in 2005 the service began hosting a significant number of third-party games. By 2007, Steam had more than 13 million registered accounts and 150 games; in 2019, it had 1 billion accounts on record and tens of thousands of games. No other PC hub can compete, and few have tried.
The 70/30 revenue split has been part of Steam’s business model from the start. Neither Google nor Apple referred to Steam when they opened their respective stores in 2008, but they both launched with the same revenue-sharing model, to little criticism.
This rate is still the standard on Steam (and Apple, and Google) today.
Recently Steam’s revenue-sharing model has only been done under public scrutiny, and only because a brand new competitor has finally entered the market. The Epic Games Store went live in December 2018, and has billions of dollars behind it, thanks to cash from Fortnite, the Unreal Engine and investors including Tencent Games. It launched with a brave promise for developers: revenue sharing of 88/12.
The Epic Games Store has picked up a handful of exclusives, keeping these titles off Steam, sometimes forever and sometimes for a limited window. In classical monopoly fashion, Valve did not respond.
Epic Games CEO Tim Sweeney openly challenged Valve to commit to a higher revenue rate for developers, saying, “If Steam committed to a permanent revenue share of 88 in -cent for all developers and publishers without major ties, Epic was in a hurry to organize a retreat from exclusive (while honoring the commitments of our partners) and consider putting our own games on Steam. “
Valve did not respond.
This is COMPETITIVE that Apple has kept 30% cut the same for a decade. So just as competitive.
– DHH (@dhh) July 29, 2020
Today, Apple CEO Tim Cook answered questions about the treatment of App Store content that could potentially compete with Apple’s own services, and whether it handles all apps the same. Developers including Spotify have filed complaints about unfair competition against Apple. Basecamp CTO and co-founder David Heinemeier Hansson recently made their publications with Apple after its email app, Hey, was rejected on the App Store for scanning its integrated shopping services. in the app. After a few flip-flops from Apple, Hey is live on the App Store without the IAP and no 30 percent cut.
“We treat every developer the same,” Cook said at today’s hearing.
In response, Hansson tweeted, “I think this has to take the best cake to a lie so far?”
Answering a question about Apple’s revenue-sharing model, Cook said, “We’ve never increased in-store commissions since the first day it operates in 2008. There’s competition for developers as there is competition. for customers. ” It then listed the App Store competitors as Xbox, PlayStation, Windows and Android.
“Lol,” Hansson replied via Twitter. “Yes, we should have written HEY for PlayStation. That was our mistake.”
This week, Sweeney also called Apple and Google for having an “absolute monopoly” on app stores. Just like Hey on the App Store, Epic tried to bypass Google’s ecosystem – and split its revenue – completely when it made the Android version of Fortnite available outside the Play Store at launch. However, many players found the design difficult to use and Epic launched it Fortnite via Google earlier this year.
Sweeney is planning to eventually launch the Epic Games Store on Google Play and the App Store, but so far, this has been impossible.
“They are [Apple] are preventing an entire category of businesses and applications from being embraced in their ecosystem by excluding competitors from every aspect of their business they are protecting, “said Sweeney CNBC last week.
Scott Miller is the founder of 3D Studio Realms Duke Nukem and the longtime advocate of independent developers. He officially entered the video game industry in 1987, when Sweeney and Valve founder Gabe Newell were also starting their own careers in the industry.
“I had a higher opinion than Gabe,” Miller told Engadget last month. “But the fact that he’s not fixing rates in favor of developers is disappointing because he has a developer background as well. And Valve is a development company. Because he’s no longer a pro-developer in the position he’s in. and at least reduce it to 20 percent? “
Valve operates in secrecy, earning a reputation as too fresh a company to do what it wants, in its own timeline. With this strategy, he has acquired a horde of diehard fans. This, despite Valve not yet releasing a new game in most of its highly regarded franchises, is ridiculously popular in a decade. Even though he refused to communicate with developers who are claiming for a more reasonable revenue deal. Even though she has a habit of abandoning some of her longest-running communities.
Valve did not respond to Epic’s ultimatums because Steam, like the App Store, is secure. It’s big enough, with a rabid enough fan, to ignore the needs of developers, players or economic competition.