Phoenix Point Fig backers have accrued 191% return to date - can we calculate the Epic moneyhat?

Evolution of Metal · Apr 20, 2019

Alexandros said:
Why?

Because the "investment" is about to be returned (91% ATM but sure as hell not the end of the project revenue), together with the backer benefits, EGS key and the Steam key down the line.

Tuco Benedicto Pacifico said:
I mean, it's a safe deal as it gives you the security of meeting a certain bottom line, but the game could have arguably aimed to sell a lot higher than that.

The two Fireaxis XCOMs sold in the millions in their Steam version.

Or you could be like Phantom Doctrine (same genre): perform poorly and compromise your studio's future:
https://www.pcworld.idg.com.au/arti...tom-doctrine-dev-creativeforge-into-disarray/

Deleted member 42 · Apr 20, 2019

Tuco Benedicto Pacifico said:
I mean, it's a safe deal as it gives you the security of meeting a certain bottom line, but the game could have arguably aimed to sell a lot higher than that.

The two Fireaxis XCOMs sold in the millions in their Steam version.

Didn't this studio do Chaos Reborn? I don't recall that doing excellent numbers. They probably just wanted to hedge their bets

Unkindled · Apr 20, 2019

Thanks for the elaborate explaination OP.
3.3 million for not even a medium sized game, Epic isn't fucking around with their money-hats.
Sadly with billions made from Fortnite they can keep doing it like no tomorrow.

Deleted member 31092 · Apr 20, 2019

For 3.3m I'd publish my games exclusively on PornHub if they asked me.

Lashley · Apr 20, 2019

demondance said:
Neither do I. My personal problem has always been the soaring narrative of "it's better for the market, competition, it's saving devs!" blah blah blah. You got paid to be an exclusive on a storefront that doesn't allow open market reselling and is explicitly gatekeeping out actual no budget indie devs who don't already have massive hits under their belts, your choice is your choice but don't try to spin it.

KuwabaraTheMan said:
I don't blame them for taking the money, but I do blame them for screwing over their backers. They should have honored the pledges.

Tuco Benedicto Pacifico said:
I mean, it's a safe deal as it gives you the security of meeting a certain bottom line, but the game could have arguably aimed to sell a lot higher than that.

The two Fireaxis XCOMs sold in the millions in their Steam version.

Yeah, they shouldn't spin it, but that financial security would be hard to turn down.

As for on Steam, didn't PoE2 only sell over 100k or something in its first year? So its still a good deal for them

HomerSimpson-Man · Apr 20, 2019

Hotdamn, if I was in their shoes I sure as hell would take the offer too. Guaranteed money of financial security for the dev team, I'll be foolish not to.

BronsonLee said:
On a personal level, I already have zero morals to begin with
Give me 4 million dollars and I would dropkick my father

Hell, my father would dropkick me if he learned I turned down 4 million because I didn't want to dropkick him.

demondance · Apr 20, 2019

Lashley said:
Yeah, they shouldn't spin it, but that financial security would be hard to turn down.

As for on Steam, didn't PoE2 only sell over 100k or something in its first year? So its still a good deal for them

Pillars of Eternity 2? Yeah, it didn't come close to the original. Somewhat different genre than an XCOM-inspired game. I don't think Steam had much to do with it, though, it had a much--hyped Kickstarter for a return to a genre that seemed to pull in a lot of people who didn't really know what they were getting into with the RTwP cRPG subgenre. They knew doing a Baldur's Gate successor was Really Important and they knew Obsidian did the increasingly beloved New Vegas, so the hype was strong among people who were probably never going to finish the first game in the first place.

There's a similar dropoff in sales of Baldur's Gate to Baldur's Gate 2 for the Enhanced Edittions. The reputations of games in this genre seem to outpace the interest of modern gamers. In a different subgenre, it turned out not many people wanted more Dungeon Master type experiences going from Legend of Grimrock 1 to the much lower selling 2 (despite 2 being a much better game).

My personal theory is that RTwP in the late 90's style made much more sense at the height of the popularity of RTS, but now that's more of a throwback burden that puts new audiences off your game. Hence few returning for PoE2.

Meanwhile Divinity: Original Sin 2 seems to be much more in tune with what modern audiences want out of cRPGs, to the point that PoE2 even added a turn-based system in an update recently.

With Phoenix Point, you really can't blame them seeing as how their own previous game bombed and other XCOM clones not named XCOM are failing to make much of a splash. They even have notable competition in their "we're more like the original X-Com!" niche, with the Xenonauts series. It's an uphill battle and I sincerely don't blame them for hedging their bets. I'm not sure Steam has anything to do with interest their game may or may not have garnered without this deal, though.

Monkey Gland Sauce · Apr 20, 2019

Remachinate said:
For the investors to collectively break even on their $500,000, Fig would need to receive $588,235 ($500,000/.85). This means the split between Fig and Snapshot is 33.33%/66.66% ($588,235 vs $1,176,.473).

Shouldn't the $588,235 be coming out of the net revenue of $1,176,473 and not in addition to it, making the split 50%/50%?

That would make it $2,247,058. Accounting for the loose figures used, the the real figure could then be $2,250,000.

Futaleufu · Apr 20, 2019

Valve could lower their cut from 30% to 5% and publishers/developers would still take the Epic money.

Meg Cherry · Apr 20, 2019

I heavily doubt you will be able to reverse-engineer the details of a major exclusivity contract with publicly available information and napkin math. Any deal Epic is writing is likely going to be more complex than "Here's a check for $x in exchange to keep it off Steam for y months."

Not to mention these deals are probably negotiated on an individual basis. So any amount you can assume for one wouldn't apply to another.

Remachinate · Apr 20, 2019

Monkey Gland Sauce said:
Shouldn't the $588,235 be coming out of the net revenue of $1,176,473 and not in addition to it, making the split 50%/50%?

That would make it $2,247,058. Accounting for the loose figures used, the the real figure could then be $2,250,000.

Nice catch, thanks for reviewing my math. I've updated the figures in the OP. That's what I get for trying to do financial analysis on a Friday night!

Mushroomer25 said:
I heavily doubt you will be able to reverse-engineer the details of a major exclusivity contract with publicly available information and napkin math. Any deal Epic is writing is likely going to be more complex than "Here's a check for $x in exchange to keep it off Steam for y months."

Not to mention these deals are probably negotiated on an individual basis. So any amount you can assume for one wouldn't apply to another.

Except all this is information they're required to disclose to the SEC for exactly the purpose of transparency. It's true that each developer will get a different deal, but at least we can get a sense of magnitude for Phoenix Point, which came under heavy criticism for its decision to take the Epic exclusive.

Liam Allen-Miller · Apr 20, 2019

Theswweet said:
If they paid that much for this how much did they pay for the larger gets?!

I heard a number the other day from a source I consider very credible at a local indie dev meetup that blew my mind.

LewieP · Apr 20, 2019

My guess is that bigger games (Metro/Borderlands 3) that went timed exclusive would be getting eight figures. Less for Ubisoft games, because they are on Uplay too.

Tuco Benedicto Pacifico · Apr 20, 2019

Evolution of Metal said:
Or you could be like Phantom Doctrine (same genre): perform poorly and compromise your studio's future:
https://www.pcworld.idg.com.au/arti...tom-doctrine-dev-creativeforge-into-disarray/

Yeah, of course. It could be Phantom Doctrine or it could be a good game.
And it will most likely make a significant difference on actual sales.

BronsonLee said:
Didn't this studio do Chaos Reborn? I don't recall that doing excellent numbers.

It also didn't cost "excellent money", being a rather simple project, so I'd expect it performed decently enough to be profitable.

Tuco Benedicto Pacifico · Apr 20, 2019

Liam Allen-Miller said:
I heard a number the other day from a source I consider very credible at a local indie dev meetup that blew my mind.

Of what ballpark are we talking about?
"Almost as good as the OP suggested", "The OP is on point" or "You are severely underestimating how much they are paying for these deals"?

Monkey Gland Sauce · Apr 20, 2019

Remachinate said:
Nice catch, thanks for reviewing my math. I've updated the figures in the OP. That's what I get for trying to do financial analysis on a Friday night!

No problemo. I wasn't sure I had missed something myself, since I don't know enough about all the financial stuff to have done the whole thing. So, thanks for doing this all in the first place.

Ge0force · Apr 20, 2019

Futaleufu said:
Valve could lower their cut from 30% to 5% and publishers/developers would still take the Epic money.

Exactly. That's why Epic's strategy isn't only anti-consumer, but anti-competitive as well imo.

I can only hope that these moneyhats keep resulting in Epic losing lots of money, and that they don't result in pc gamers sticking to EGS for non-exclusive as well. This shouldn't become a successful way to "compete" on pc.

Turin Turambar · Apr 20, 2019

Ge0force said:
Exactly. That's why Epic's strategy isn't only anti-consumer, but anti-competitive as well imo.

I can only hope that these moneyhats keep resulting in Epic losing lots of money, and that they don't result in pc gamers sticking to EGS for non-exclusive as well. This shouldn't become a successful way to "compete" on pc.

Lol. He is right when he said

Valve could lower their cut from 30% to 5% and publishers/developers would still take the Epic money.

but it's hilarious you think it's anti competitive. They are basically acting as a publisher, by giving money upfront to select developers in exchange of a deal for the game publishing rights. That's literally what publishers do.

So, following that logic... being a publisher is bad for pc gaming?

Ge0force · Apr 20, 2019

Turin Turambar said:
but it's hilarious you think it's anti competitive. They are basically acting as a publisher, by giving money upfront to select developers in exchange of a deal for the game publishing rights. That's literally what publishers do.

So, following that logic... being a publisher is bad for pc gaming?

Either you're trolling or you have no idea what a publisher does.

A publisher funds the full development of a game, based on a concept and/or a very small demo.

Epic pays developers to keep games that are close to completion away from competing storefronts. They have a playable game and lots of user data to pick the games they moneyhat. This isn't even comparable to what publishers do.

Deleted member 27751 · Apr 20, 2019

Yeah that is a lot of money. It's definitely contributing to devs taking up exclusivity in favour of what would be less sales due to worse store in features and user base. A very, very large return on investment is by far more important for a developer then simply pleasing your potential customers.

I mean, wouldn't you? I always figured the dev cut isn't going to be the reason people sell their games on EGS initially while Epic is throwing money around like it's Christmas. In the long run I certainly hope with less exclusives we'll see the actual competition of two storefronts competiting on price rather than locking games away without customer focus and destruction of accessible play options.

Borderlands 3 must have costed at least $20 million. At least. Because the game ain't going to sell well so I guess the idea is to gain as much middle ground between now and Steam release to fill the gap of sales but also come Steam release it will have to be slightly discounted.

Turin Turambar said:
Lol. He is right when he said

but it's hilarious you think it's anti competitive. They are basically acting as a publisher, by giving money upfront to select developers in exchange of a deal for the game publishing rights. That's literally what publishers do.

So, following that logic... being a publisher is bad for pc gaming?

Your logic is actually entirely wrong to follow and is in fact the exact red herring Epic wants you to believe. That this exclusivity is fine for PC gaming and everyone should accept it when that isn't the case at all. There has been numerous in depth discussions on this topic, heck the latest one being Randy's comments which you can red up and see well outlined faults of Epic and their store.

tuxfool · Apr 20, 2019

chaobreaker said:
Epic's not aiming to get a direct profit from these exclusive deals. The endgame for all this money their throwing around is a loyal userbase that will stick to their service and buy more games long after these deals expire.

lol,

Loyal.

Liam Allen-Miller · Apr 20, 2019

Tuco Benedicto Pacifico said:
Of what ballpark are we talking about?
"Almost as good as the OP suggested", "The OP is on point" or "You are severely underestimating how much they are paying for these deals"?

Somewhere in this region:

The OP is on point l-----------------------x------l You are severely underestimating how much they are paying for these deals

Being intentionally vague because the world is small and people know each other.

EDIT: Please don't make a thread specifically about this post.

Remachinate · Apr 20, 2019

Liam Allen-Miller said:
Somewhere in this region:

The OP is on point l-----------------------x------l You are severely underestimating how much they are paying for these deals

Being intentionally vague because the world is small and people know each other.

EDIT: Please don't make a thread specifically about this post.

If it's not sharing too much information, was the figure you heard specifically for Phoenix Point, a similarly-budgeted indie game, or one of the bigger AAA titles? I wouldn't rule out any one of them but if it were the case for Phoenix Point it would probably mean that Snapshot is getting the revenue in installments. Unfortunately, since Fig only pays dividends twice a year, and Phoenix Point is targeted to release in September, we wouldn't have a chance to get updated results before retail sales muddy the waters.

Fat4all · Apr 20, 2019

Remachinate said:
If it's not sharing too much information, was the figure you heard specifically for Phoenix Point, a similarly-budgeted indie game, or one of the bigger AAA titles?

considering the post Liam quoted before, probably a game closer to the AA-AAA mark

i can only imagine how much a studio like Remedy got for Control

Deleted member 5596 · Apr 20, 2019

Fat4all said:
considering the post Liam quoted before, probably a game closer to the AA-AAA mark

i can only imagine how much a studio like Remedy got for Control

I can see easily 15-20 million.

Fat4all · Apr 20, 2019

Relaxed Muscle said:
I can see easily 15-20 million.

15mil would be a guaranteed 250k sold copies equivalent

woof

Dalik · Apr 21, 2019

75k copies sales are nothing when you can sell 1 mln copies on steam, by going EGS exclusive you miss on the hype/FOMO effect at launch, since nobody plays any non fortnite games on EGS.
World war z is 25~th game on twitch list. yeah its an hyperbole but we dont have any numbers showing that EGS exclusive games are selling good even after it has been so many games.

Liam Allen-Miller · Apr 21, 2019

Remachinate said:
If it's not sharing too much information, was the figure you heard specifically for Phoenix Point, a similarly-budgeted indie game, or one of the bigger AAA titles? [...]

I'll DM you.

Fularu · Apr 21, 2019

Dalik said:
75k copies sales are nothing when you can sell 1 mln copies on steam, by going EGS exclusive you miss on the hype/FOMO effect at launch, since nobody plays any non fortnite games on EGS.
World war z is 25~th game on twitch list. yeah its an hyperbole but we dont have any numbers showing that EGS exclusive games are selling good even after it has been so many games.

Twitch viewership <> Game sales.

Otherwise FIFA 19 would be the top game on Twitch. People should really stop using the Twitch card, some games lend themselves to streams, others don't

Nome · Apr 21, 2019

Nuclear Muffin said:
That's a huge amount of money for such a minor title!

Jesus! Can't even imagine how much money they're throwing around in total here... Tencent and those Fortnite whales must be pumping insane amounts of cash into Epic!

The figure in the OP is a fraction of what Fortnite makes in a single day.

Roshin · Apr 21, 2019

LewieP said:
Sounds about right to me. I wouldn't be surprised if it was more (or there will be more money coming down the line).

I expect that it is indeed either entirely or mostly an advance on sales.

I'm interested to see what happens when these 1 year deals end. I expect they will try to extend or renew the deals for the more popular games.

Skittles · Apr 21, 2019

Nuclear Muffin said:
That's a huge amount of money for such a minor title!

Jesus! Can't even imagine how much money they're throwing around in total here... Tencent and those Fortnite whales must be pumping insane amounts of cash into Epic!

Eh, it's about 10% of the profits they make off a daily store refresh in fortnite to moneyhat 1 game. (and some indie devs will probably take far less)

Alexandros · Apr 21, 2019

Evolution of Metal said:
Because the "investment" is about to be returned (91% ATM but sure as hell not the end of the project revenue), together with the backer benefits, EGS key and the Steam key down the line.

But people that requested refunds did so out of principle. Why would the return of investment or backer benefits matter to them?

Nome · Apr 21, 2019

Ge0force said:
A publisher funds the full development of a game, based on a concept and/or a very small demo.

This is wrong.
A publisher can fulfill many one or more of the following roles: funding, marketing, user acquisition, customer support, monetization management, project management, localization, etc. Basically anything that's not developing the game itself, although in some cases, they may opt to have a hand in that as well. A publisher doesn't need to actually fund the development of a game, although that's a really common role. This is why complete games can still need a publisher.

In a lot of ways Epic is acting similarly to a publisher. In a lot of ways, Steam also serves some functions of the traditional publisher. It's only muddy because the floor to publishing on PC is so low now.

Ge0force · Apr 21, 2019

Nome said:
This is wrong.
A publisher can fulfill many one or more of the following roles: funding, marketing, user acquisition, customer support, monetization management, project management, localization, etc. Basically anything that's not developing the game itself, although in some cases, they may opt to have a hand in that as well. A publisher doesn't need to actually fund the development of a game, although that's a really common role. This is why complete games can still need a publisher.

In a lot of ways Epic is acting similarly to a publisher. In a lot of ways, Steam also serves some functions of the traditional publisher. It's only muddy because the floor to publishing on PC is so low now.

Agreed. My point was that Epic's moneyhatting is not literally what a publisher does. Routing people's concerns against store exclusivity deals to "publishers are bad" doesn't make sense at all.

Madjoki · Apr 21, 2019

Fat4all said:
i can only imagine how much a studio like Remedy got for Control

Epic's money went to 505 games, since they're publisher, so nothing directly.

Remedy would get 45% of portion that is advanced royalties. (Epic is also giving marketing fund).

It wasn't enough to put Remedy in black so:

~ 30m€ total budget - 7.75m€ development fund from 505 games.

~ 22.5m€

Which means ~50m€ of royalties needed before Remedy is in black. So less than that (in royalties).

Evolution of Metal said:
Because the "investment" is about to be returned (91% ATM but sure as hell not the end of the project revenue), together with the backer benefits, EGS key and the Steam key down the line.

Regular backers won't get back anything. Only those who went with higher cost investment tiers.

Phoenix Point Fig backers have accrued 191% return to date - can we calculate the Epic moneyhat?

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