Valve has announced a divisive new revenue-sharing system for games on Steam, rewarding the best-selling developers and publishers with a greater share of revenue from game sales.
Under the system, Valve’s 30% cut is reduced to 25% for games that earn more than $10 million in revenue and drops a further 5% down to 20% for any game that scores big with over $50 million in sales. That would leave the majority of AAA publishers with 80% of the revenue on their games compared to the previous 70% cap.
For the big boys, this represents an obvious improvement, as well as a glaringly obvious move from Valve to try to stem the flow of publishers splintering off and using their own game stores and clients. It could well be a case of too little too late on that front though, with Bethesda, EA, Ubisoft and, more recently, Activision to a degree, all leaving Steam for pastures new and, well, a 100% cut of every game they sell.
"We've created new revenue share tiers for games that hit certain revenue levels,” wrote Valve in an official statement. “Starting from October 1, 2018 (i.e. revenues prior to that date are not included), when a game makes over $10 million on Steam, the revenue share for that application will adjust to 75%/25% on earnings beyond $10M.
"At $50 million, the revenue share will adjust to 80%/20% on earnings beyond $50M. Revenue includes game packages, DLC, in-game sales, and Community Marketplace game fees. Our hope is this change will reward the positive network effects generated by developers of big games, further aligning their interests with Steam and the community."
There’s a huge question mark now over whether this system will work, or indeed if it’s even targeting the right sector of the market at this point. Valve’s reduced revenue share favours the games that are already the biggest successes, lumping indie studios with the smallest revenue cut. Essentially, Valve wants to subsidise the biggest publishers’ income in a big to prevent them from launching their own stores. The rich get richer while the indies will be desperately looking to creak past those $10m and $50m sales markers.
Arguably there’s no right or wrong approach to what Valve’s attempting here but it’s certain to ruffle a few feathers. What are your thoughts, does increased revenue share for the most successful titles sound like a fair deal? Or has Valve got its new system upside down? Let us know your thoughts!