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Comment by methodover | Hacker News Reader

> I am surprised that ... are able to command as high a margin as they do for sales commission.

Yep. Me too. I’ve long thought that Steam charges way too much considering the platform. There would seem to be tons of room for a competitor to undercut Steam. I’m excited about Discord’s new store.

Revenue share is a killer for a business, especially as one as volatile as computer games. Any game needs to be 25% better than it otherwise would have been because of Steam’s revenue share. Does it really bring that much to the table? In 2018? Enough to justify their absolutely enormous cost?

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The money games can make on steam is infinitely higher than other platforms - what you're paying for is to get your game on the platform with the most users.

A local game company I knew had a game on the humble bundle, their website, and a few other platform for months - they made a few thousand. Then it got greenlight on steam and they pulled 1m over 4 months.

Steam is not merely a payment processing system, it's an audience.

Steam used to be the best way to make your game visible .. but now haha, not really.

Not that I am against Steam opening its doors .. the curation was very subjective which was problematic since it could mean life or death for a studio.

Right now .. I guess it is still better than nothing if you have an unknown game to sell .. but I would not have my game only sold on steam.

There's a GDC talk about this (up on YouTube, can't remember the title) about the cost/difficulty going alone vs going through steam.

The tldr is that valve apparently knows exactly how much it costs you to run this apparatus yourself, and the rev share reflects that reality. The numbers are apparently really close.

The catch is that as you sell more units, the cost of the apparatus starts to diminish as a percentage of revenue, so running your own marketplace starrs to make sense when you get into the blockbuster territory.

This pricing update apparently takes that fact into account, which means that when companies start running the numbers on their new game launch, the justification for building their own marketplace starts to go away.

I'm pretty sure it's not the talk you're thinking of, but Jeff Vogel (who has been mostly-successfully making indie games consistently since 1995) mentions it in this GDC vault talk: https://www.youtube.com/watch?v=stxVBJem3Rs

They were able to stop paying a third employee when they went to Steam. That's a lot of value to the business.

> They were able to stop paying a third employee when they went to Steam. That's a lot of value to the business.

They were able to stop paying? Doesn't that mean they make less money?

Revenue is fairly useless it’s profit that you care about. Having less employees also means less effort managing them.

Ah I see.

They also made more money, even with Steam's cut.

People are expensive. (Hence the whole "oncoming economic doom" thing.)

For sure, a service like Steam offers tons of value for a game developer. And I’m sure you’re right that the price of Steam matches the cost of an individual developer developing a launcher and hosting service. That’s all true.

But I feel like the margins for Steam are so wide that it’s wide open for undercutting; for others to offer a cheaper, probably better product. I’d hope that game hosting quickly becomes commoditized due to lots of competitors vying for the cheapest possible price.

That’s good for developers, and really good for gamers.

> Any game needs to be 25% better

Actually, 42.86% better with the 30% cut, and 33.33% better with the 25% cut, and 25% better with the 20% cut.

I appreciate the precision!

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