GamesIndustry: Google has no plans to lower its 30% cut on Google Play, "It's been the industry standard"

Oct 26, 2017
4,668
So 30% is some magic number where platforms suddenly become profitable with improvements. Yeah I don't know, I'm gonna need to see some source about the costs. In my amature opinion it would be enough with 2-5% cut to still be profitable with improvements.

The point is that neither you nor me know the economics of platforms. But I'm certain that 30% is not some magic number and that there is a lot of profit until you reach 30%.
Epic Store charges 5% fee for some payment methods. So yeah you have no idea how much things cost. Payment fees from customers alone are 2-5%, then as far as i know companies pay fee to pay out developers. And those are just fees for payments. On top of that you need to pay for infrastructure, employees, insurance...
 
Oct 25, 2017
4,790
So 30% is some magic number where platforms suddenly become profitable with improvements. Yeah I don't know, I'm gonna need to see some source about the costs. In my amature opinion it would be enough with 2-5% cut to still be profitable with improvements.

The point is that neither you nor me know the economics of platforms. But I'm certain that 30% is not some magic number and that there is a lot of profit until you reach 30%.
Hahahahahaha.
Just for the record:
https://www.theverge.com/2018/11/29/18118217/itchio-steam-leaf-corcoran-pc-games-indie
"Itchio’s own profit varies from month to month, Corcoran said, but it usually breaks even. "
 
Oct 25, 2017
123
"it's been the industry standard" is not much of an argument though. It's kind of like saying "it's always been this way, we're in control and it benefits us so why would we even bother", which makes sense considering they control more than half of a massive worldwide market on which many, many developers' livelihoods depend.
 

Hektor

Community Resettler
Member
Oct 25, 2017
5,686
Deutschland
So 30% is some magic number where platforms suddenly become profitable with improvements. Yeah I don't know, I'm gonna need to see some source about the costs. In my armature opinion it would be enough with 2-5% cut to still be profitable with improvements.

The point is that neither you nor me know the economics of platforms. But I'm certain that 30% is not some magic number and that there is a lot of profit until you reach 30%.
Half your post is literally just projecting things into my post i didn't even wrote lol, but let's go with that:

The fact that the epic store needs to charge additional fees to their 12% cut in multiple countries proves that 12% isn't enough to actually cover their costs in these regions, as said by the CEO of Epic himself:


Apart from that, most popular payment methods (Credit Cards, Paypal) already charge between 2 and 5% per transaction:

https://www.paypal.com/us/brc/article/understanding-merchant-credit-card-processing-fees
https://www.merchantmaverick.com/the-complete-guide-to-credit-card-processing-rates-and-fees/

The idea of operating an entire global backend and continously developing the platform profitably at 2-5% is nothing but a complete pipedream because that'd make you lossleading.

Then you have epic saying they won't have forums like steam does because "they want to make it optional for devs, so those that want can use steam/discord/reddit) which is an obvious lie if you look at how they say they want to handle user reviews, where it'll be an opt-in feature for the devs.
If it would be about options they would just implement forums as a feature and give the devs a toggle like they'll do for userreviews, but they won't, because it's factually not about options, it's about cutting costs.


To reitarete on my initial post: I'm not saying it's impossible to go beneath 30% at all, i'm saying epics 12% make it impossible for epic to ever be on par with other platforms because they literally won't be able to afford it with their incredibly razor-thin margins.
 
Oct 27, 2017
3,802
"it's been the industry standard" is not much of an argument though. It's kind of like saying "it's always been this way, we're in control and it benefits us so why would we even bother", which makes sense considering they control more than half of a massive worldwide market on which many, many developers' livelihoods depend.
I kind of understand this cut when you provide the hardware and the network (Sony/MS/Ninty), but it makes less sense for stuff like PC or Android. Though Google is sure trying to improve Android at every release, even if said improvements are somewhat marginal (or so they feel with the latest version, IMO).
 
Jul 14, 2018
425
How did this Google Play Store article go all the way back to Epic/Valve anyways
because of this post

Which is what Steam also does.
People keep thinking Steam is only a storefront when it became an entire backend that is necessary to PC gaming, VR and Linux.
BTW... Sorry, but he is drunk to think Steam do the same leg work of Google, Apple, MS, Sony...
 
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BronsonLee

Don't worry I'm on the case
Moderator
Oct 24, 2017
11,610
The storefronts will take whatever cut they can, so most settled on 30 since that got less pushback until now
This ain't a democracy
It's a cheerocracy~
 

BronsonLee

Don't worry I'm on the case
Moderator
Oct 24, 2017
11,610
Yeah Patreon has trouble because it has super aggressive VC's who are stupid and want as massive of a payout as quickly as possible
 
Oct 26, 2017
4,906
What? That makes no sense. On an open platform there are no royalties, and the only thing a storefront absolutely has to offer is a way to purchase and download games. A 15GB game that costs $60 does not cost four times as much for a storefront to sell and distribute as a 15GB game that costs $15. The percentage charged to publishers has no direct relation to the actual costs of distributing their games. Ideally a storefront on an open platform would charge developers for their real operational and distribution costs along with a reasonable profit. The low cost of PC distribution due to it's lack of royalties has always been one of it's strengths.
I don't understand the point you're making. I said that open platforms have less revenue streams than walled gardens which is why I believe that efforts by developers to reduce the 30% cut should begin from said walled gardens. Allowing walled gardens to collect the full 30% in addition to all the other revenue streams while pushing for services on open platforms to reduce their cut is a recipe for disaster as the viability of these services might be threatened. I'm saying that developers will have played themselves if they don't push for a reduction of the cut that walled gardens ask for. If open platforms dwindle, many developers will be well and truly fucked.
 

TSM

Member
Oct 27, 2017
1,274
I don't understand the point you're making. I said that open platforms have less revenue streams than walled gardens which is why I believe that efforts by developers to reduce the 30% cut should begin from said walled gardens. Allowing walled gardens to collect the full 30% in addition to all the other revenue streams while pushing for services on open platforms to reduce their cut is a recipe for disaster as the viability of these services might be threatened. I'm saying that developers will have played themselves if they don't push for a reduction of the cut that walled gardens ask for. If open platforms dwindle, many developers will be well and truly fucked.
The walled gardens have a barrier to entry that publishers must meet to reach their customers, and thus it's 30% or you just don't sell games on IOS/PS4/XBO/Switch. The major store fronts on open platforms get to charge 30% because they have historically had no real competition on the open platform. Publishers have no leverage to push for lower percentages on the walled gardens, and only recently on PC has a viable alternative presented itself for the majority of publishers to exert any real pressure there. The percentage should abolutely come down across the board for all store fronts on all platforms, but only on the open platforms are there any potential alternatives to apply pressure. Ideally the percentage on store fronts on open platforms would lower to something more reasonable and this would apply pressure to the walled gardens to follow suit.

Still waiting on someone to explain exactly why 30% is too much, other than "it sounds like it should be less."
What has a store front done that adds enough value for them to deserve 30 cents of every dollar earned? On a walled garden like PSN it's simply the cost of being able to do business at all, but on an open platform publishers get to question if they are being provided enough value for the store front to earn their 30%. It's up to the individual store fronts to justify their cut, and many publishers do not feel like they have done so.
 
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MistaTwo

SNK Gaming Division Studio 1
Verified
Oct 24, 2017
1,750
because of this post


BTW... Sorry, but he is drunk to think Steam do the same leg work of Google, Apple, MS, Sony...
I have published games on every single one of those platforms, and they all have their advantages and disadvantages.

If we are just talking about storefront and developer backend, Steamworks cleans the floor with all of them.
I can actually think of multiple improvements Valve has added to Steamworks in the last year.

TPRNet is still a goddamn mess and an absolute bitch to do even the simplest things. And it has been that way for a long time.
 
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Oct 26, 2017
4,906
The walled gardens have a barrier to entry that publishers must meet to reach their customers, and thus it's 30% or you just don't sell games on IOS/PS4/XBO/Switch.
Agreed. This is one of the reasons why walled gardens are bad. Do we agree on that?

The major store fronts on open platforms get to charge 30% because they have historically had no real competition on the open platform. Publishers have no leverage to push for lower percentages on the walled gardens, and only recently on PC has a viable alternative presented itself for the majority of publishers to exert any real pressure there.
Walled gardens have lots of customers because people expect to be able to find the content they want on those platforms. If Activision, EA, Ubisoft and Take 2 all banded together and pressured Sony, Microsoft and Nintendo to lower the cut, you don't think that the publishers would have leverage over the platform holders?

The percentage should abolutely come down across the board for all store fronts on all platforms, but only on the open platforms are there any potential alternatives to apply pressure. Ideally the percentage on store fronts on open platforms would lower to something more reasonable and this would apply pressure to the walled gardens to follow suit.
No, this way wouldn't apply pressure to walled gardens. Instead, it would make sure that walled gardens always have the advantage as profits for service providers on open platforms drop. Putting pressure on open platforms is extremely shortsighted and a guaranteed way of moving us towards an all walled-garden future. The logic is completely backwards.
 
Oct 26, 2017
4,134
Germany
It's up to the individual store fronts to justify their cut, and many publishers do not feel like they have done so.
When its only up to the publishers, they would pay exactly zero dollars for the storefronts.

Edit: And before you argue that if thats what they see as the value, thats ok - they dont do it because it does not have any value, its because they want 100% of the money.

And idk, I am fine with a storefront that is controlled by, lets say Sony or Microsoft, as long as I am asured as a consumer that the games dont appear when the publisher is not longer able or willing to pay the costs for running the servers of their own storefront.