Game Design, Programming and running a one-man games business…

Why epics strategy makes a lot of sense

cliffski

Not writing about the ooblets thing here, but to address very briefly the core issue: lets talk about why games are epic exclusives, why people shouldn’t be angry and why epic are probably doing the best thing they can do here.

Before going any further I want to make some core assumptions. if you disagree with these stop reading now, because we have no common ground!

  1. Game developers are generally trying to make good, fun games, and stay in business, nothing else.
  2. Its good for gamers if the games marketplace is competitive, as this keeps the prices low, and the services high.

I don’t think either are controversial. if you are literally twelve years old, you may dispute 2), but…do some reading. Monopolies, whether they are near or absolute are a bad thing. Not because the people involved are bad, but just because competition keeps people hungry, keeps people innovative, keeps people working. There was theoretically competition in the marketplace to make cleaner-fuel cars for decades, until one company showed up to provide *real* competition, and then whoah, suddenly the customer has a vast array of cheaper-than-ever and better-than-ever electric cars! Disruptors entering a market make things better for ALL consumers, even if they still stick with the same supplier…

To put this another way, even if you love steam (I do!) and only buy your games from steam (95% steam, 5% origin here), and never, ever, ever will ever buy a game elsewhere…then competition (from epic etc) is STILL good for you, because it forces steam to stay competitive.

Anyway…

So Epic clearly have fucktons of money and want to spend it on creating a true, viable competitor to steam. This is VERY hard. Its almost as hard as competing with amazon prime or netflix. The only upside is that valve are a private company, so they can’t tap the equity markets for cash to run at a loss for a decade to destroy your business… but I digress… competing with steam is HARD, they have been around so long, with such a huge catalog. How will anybody EVER compete?

Well anyone as old as me remembers how valve did it. They were competing with retail, and NONE OF US wanted to use steam. The rage was incredible, I remember HL2s release. people HATED steam with a vengeance and yet…we all installed it because OMG HL2 AMAZEBALLS.

Epic are ‘doing a steam’ to steam, and they are doing it for two reasons, both of which I think are sensible. Firstly, they are doing it because they KNOW THIS WORKS, as they all saw valve do it a while ago. They have also seen many other stores launch…and fail badly without using the ‘exclusive games’ strategy. They know that this *can* work, and they know other strategies *tend to fail*.

The second reason is… this is the best possible way they can promote their store… in the eyes of gamers. yes I really typed that, yes I really mean it. Lets look at the three things epic are doing to drive interest in their store:

  1. Free games literally given away to gamers for nothing but signing up to a free account. Not shovelware, really DECENT games.
  2. A much better cut to developers that means they get to keep more of the money from the games they sell
  3. Advances (guarantees?) on royalties for being exclusive to the platform for a set period.

So.. 1) is epic directly giving money (effectively) to gamers, and 2) and 3) is epic giving money to game developers (quite directly!). How is this bad? And the big point I want to make is…what is the alternative way for them to make the store succeed…

ADVERTISING

Gamers have a choice. They can either say “Yay we love lack of competition! we have no idea how free markets work” or “We LOVE banner ads, video ads, super-bowl ads, poster-ads, in-stream ads. GIVE US MORE ADVERTS” or they can say “If you *have* to spend a lot of money on building a new games store, it would be good if you gave us, and the game devs loads of free stuff”.

I am amazed they do not rally behind 3). It seems the best possible choice they could make to keep gamers AND game devs happy. Literally the ONLY people who should be raging about their strategy are the account managers at the big advertising agencies.

Boo Hoo.

26 thoughts on Why epics strategy makes a lot of sense

  1. I think the reason people are raging is because they want to have an open market where all goods are available at all vendors, and vendors compete on other things such as service, price, availability, usability, etc. This is better for consumers, but as you highlighted, might not be economically possible for the vendors and developers.

    This is not a huge problem for games (yet) because you can just have a free account in every store and then buy each game where it is cheapest or first available.

    But as soon as gaming companies adopt subscription models to a greater extent we will have the same problem as the video streaming market where you have to pay for multiple accounts to have access to anything.

    In any case the rage is unwarranted because you can always vote with your feet and spend your time on some other of the thousands of games that are available.

    1. CD Project did this, and IMO it is a huge mistake that will cost them millions of dollars. They should have kept Cyberpunk as a GOG exclusive for 1/2 year. Every steam sale is $18 paid. I’d rather have seen 100% of the money going to CDPR instead of padding some dudes bank account who no longer creates any games.

    2. Exactly the thoughts I had.
      Sure, monopolies are bad, but two stores filled with their own exclusives are still monopolies: I cant go anywhere else to purchase these products, hence monopoly.
      Its not as bad as a single store, because stores will compete for developers, but for consumers its still a pretty bad deal. As you said, you can see the result of that in the streaming industry.
      But since most of the internet is filled with raging consumers and indignant developers its difficult to have a discussion about it.

  2. I’m definitely onboard with competition in the market place but I still disagree with Epic’s strategy being good for the consumer.

    You say monopolies are bad, and I agree there. However if someone wants to consume a particular piece of media, Epic is creating essentially created a monopoly on that product. Games are less like other consumables. For example, if my store doesn’t care the kind of toilet paper I want I can find a similar alternative that will do the job. If I want to play the new Fallout or Elder Scrolls or something, it’s unlikely that I’ll be satisfied playing some similar game, or an older version of these games. Alternatives don’t exist for these products the same way they do for others.

    Epic is creating monopolies on a specific product. This forces people to use their service if they want the product, regardless of the quality of said service. It also pushes the market towards getting exclusives on products being the driving force behind sales and less about the quality of the service they’re providing.

    It’s already happening with streaming platforms where features have been stagnating. Netflix and Hulu and Amazon Prime Video care more about getting exclusive content than making their platforms better.

    I don’t have any ill-will towards any dev who takes Epic up on an exclusivity deal. I’m sure it’s substantial enough to make up for any lost sales from people against the platform. I’m not under any illusion a push in this direction is good for the consumer in the long term though.

    1. Why are you not furious at valve that they wont sell half life 2 on origin? OR on the epic store. If exclusives are anti consumer…then so is steam? I don’t see team fortress on the epic store or kongregate or origin or itch.
      This argument cannot only be applied to epic, it has to be applied fairly.
      Besides a monopoly applies to a product type, not a specific product. You cant buy a pizza hut pizza from pizza express, but pizza hut dont have a pizza monopoly.

      You cant buy production line from introversion.

      Saying ‘a monopoly on a specific product’ makes the definition of monopoly meaningless.
      Elder scrolls is just an RPG, there are loads. Loads of stores sell RPGs, loads of restaurants sell pizza.

      1. They hide behind this “we want a free and open market” argument, when the reality is that they just fanboys who want everything on Steam and would ignore the other stores. It’s laughable.

        And they have short memories (or are under the age of 28) when it comes to HL2, as you mentioned. Steam was built on making the most hyped game of its generation an exclusive.

        Here’s some quotes for you all:

        https://games.slashdot.org/story/04/10/23/0812224/half-life-2-retail-to-require-steam-activation

        ” I will buy your game (if it turns out to be worth it), and I will acquire a crack to enable it.

        Don’t fuck over your customers. Things will get much worse.”

        “If I’m going to be treated like a copyright infringer, I’ll just wait for the crack.”

        All the same type of comments I’m hearing about Epic.

        Here’s an unrelated comment foreshadowing Kickstarter:
        https://games.slashdot.org/comments.pl?sid=126807&cid=10609504

      2. I’d personally love it if Half-Life 2 and any other Valve games would be available on other platforms. I’d be great to get many of them on GOG and DRM free! I don’t think it’d be as good for Valve, but it’s definitely pro-consumer. I really wish I could play Mario games and Breath of the Wild on my PC but I have to buy Nintendo’s hardware to do it. I’m a bit more forgiving of someone making stuff and deciding they only want to sell it on their own platform. I’m not saying I like it but I’m more accepting of it.

        Any intro to economics course talks about substitute goods in the market, and yes, monopolies do traditionally apply to product types. My argument is that even though there are other RPGs and shows out there or what have you, I don’t think that consumers necessarily see something like the show Vikings being a sufficient substitute to Game of Thrones, or Hat in Time being an adequate substitute to Mario Odyssey. This applies the affects of a monopoly to a single product. The most competitive situation (and therefore best for the consumer) is when all products are available everywhere. When you start reducing what you can buy and where, that’s anti-consumer.

        Again, I’m not faulting devs for taking Epic exclusivity deals, I’m just not going to swallow that it’s good for consumers in the longterm.

      3. There’s a big difference between what Valve did and what Epic is doing. Making your own game exclusive to your own store is one thing. Nobody were complaining about Fortnite not being on Steam. That’s the equivalent to HL2 being a Steam-exclusive, and that did not cause problems.

        What is making people upset is having third party games snatched away from their preferred platforms (calling Steam a “store” does not do justice to what it is, or explain why people are attached to it), games which would otherwise have been released there and in many cases have been promoted there already. You may not agree that it is a big deal, but at least acknowledge that it is a completely different strategy to the one Valve has used over the years.

        1. why does it matter who made the game? you cant get fortnite on steam, you cant get half life on epic. you cant get ooblets RIGHT NOW on steam, and it will be there in a year. HL2 isn’t going anywhere. So yup, I’m wrong, what epic are doing with ooblets is NOWHERE NEAR as bad as what valve are doing with HL2…

          1. Are you serious? You honestly don’t see the difference? Between somebody going out and buying the exclusive rights to a shit-ton of third-party games that have already been scheduled for release on other stores versus someone releasing their occational own releases exclusively on their own stores?

            Oh well, most people do see the difference. That’s why they aren’t yelling at Epic for keeping Fortnite exclusive to their own store.

            It’s not just about Steam, either, some of these games were due for release on GOG too (Phoenix Point is one example, this was a DRM-free version so kind of a big deal for some – especially Kicstarter-backers who specifically chose that version before the game suddenly became an Epic-exclusive).

            Regardless, I agree with you regarding competition. I agree that Epic are using a strategy that makes sense from their point of view. But I can at least acknowledge why their strategy are infuriating so many, in a day and age where even the console holders have largely stopped paying for third party exclusives. It’s not black & white, you know, it’s possible to disagree with someone while also at least making an effort to understand their point of view.

    2. >Epic is creating essentially created a monopoly on that product.

      There are console versions of like… most if not all their games. How is that a monopoly?

  3. I largely agree with you, with some caveats. Steam lets us generate and sell cd keys wherever we want, be it on our own store (where we get almost 100% of the purchase) or on many other online retailers like Humble, greenmangaming, itch.io, Chrono.gg, etc. These keys can all be activated on Steam and will have all the advantages of buying a game directly from Steam (workshop, forums, multiple dev branches and patches as frequently as we want, player count -> visibility on the popular tab -> discoverability on the Steam platform) but Valve gets no percentage of these sales. This is extraordinarily pro-developer and pro-gamer. We can even sell our game on our website, provide a DRM-free download, *and* provide a Steam key. Epic categorically disallows all of this, and that needs to change, in my opinion.

    Ultimately the biggest issue most indies face is one of discoverability; at any given time the vast majority of your target audience has no idea your game exists. Being on Epic’s store, with its limited catalogue, is a huge benefit. Meanwhile if you just dump your game on Steam and let The Algorithm deliver users to your page, well, you can check gamedev Twitter any day of the week and see how that works out for people. Ultimately I think successful “niche” games like Production Line, Rimworld, Prison Architect have all followed a multi-stage strategy involving a period of direct sales building up to a release on Steam, which seems effective — day one you have people lighting up friends lists with the name of your game, you have player activity, you have people with hundreds of hours giving reviews (even if they don’t affect the overall score anymore) which will hopefully deliver you enough Steam customers to keep the cycle going. These Steam customers found your have

    1. Whoops, hit submit. Last time I make a long post on mobile… Anyway. Those Steam customers found your game on Steam and likely wouldn’t have bought your game elsewhere *because they never would’ve found it*.

  4. > if you are literally twelve years old

    Yeah… you should have read the Ooblets thing to understand why people got mad to begin with. Would help to avoid the same issue.

      1. It’s more how the Ooblets developer was extremely condescending to their audience, starting by sarcastically describing an extreme position and implying that anyone objecting held that view, then ending with some ridiculous what-about-ism arguing that since there are terrible things happening in the world, nobody should concern themselves with anything frustrating that is less serious.

  5. Would Steam really need to access equity markets though? Being a private company we don’t get much insight into their current financial situation but I would hazard a guess they’re sitting on top of a very large warchest such that they could match Epic dollar for dollar if they wish to do so.

  6. I completely agree with you, Cliff.

    Everyone with a platform to push, with deep pockets, pays to obtain exclusive content to make their stores compelling. EA and Microsoft and Sony and Valve and Nintendo all do it, one way or the other, either via investing in in-house development or buying up teams or individual games.

    Yes, all the ancilliary stuff which these stores offer is nice, but they live and die on the quality of content. There is no way in hell you can begin to compete with Steam without compelling, exclusive content. You just can’t. Sony won the last console round on the basis of content, MS knows it, hence last year’s shopping spree on buying up the development talent they need to compete in the next round.

    Does anyone really bat an eye that Disney are withdrawing their Marvel content from Netflix, a disrupting former startup that’s trying to eat their lunch, in preparation for launching Disney+?

    Content is king! The vehicle to deliver the content is a distant second place, no secondary feature can move the needle compared to a raft of exclusive games.

    It’s such a weirdly naive utopian world view to think that these platforms should just be open and all content should be available on all stores, just because you like to have your digital games in one place.

  7. Let’s be honest, most of the people complaining about Epic in particular are actually complaining that their games are not exclusively on Steam anymore (and hence can’t stick to keeping everything in a single place). Valve could have countered this easily way ahead of time, but they slacked off a lot and did nothing meaningful for years and now they’re paying the consequences the worst way possible (sorry, but gamers are not gonna stick to Steam and miss on all the big games if they move to Epic). The big problem is that the end result will be the same near-monopoly storefront situation as before, just with a new name :/

    Also I’d say Tesla is a case of being at the right place at the right time: electric cars had been tried before, but they were too inefficient (both batteries not being good enough and cars needing too much power for them) and car makers decided to not try. Where Tesla deserves credit is for trying it and proving the technology was finally there (while everybody else was resignedly looking away thinking it wasn’t the time yet). Whether they’ll be able to stay around a decade from now on we’ll see (electric cars will become common enough to not feel unique anymore, so it’ll be a matter of how strong they can keep the brand), but if they play their cards right I can certainly see them sticking around.

  8. I’m willing to bet that anyone that DOES NOT have an issue with Epic’s exclusivity deals are console gamers or came from console gaming where this sort of thing is normal and actually expected.

    Prove me wrong.

    FYI – I refuse to use the Epic store due to a security issue I had with them that they took forever to resolve and the fact that they force you to contact them to close an account as opposed to making it possible through their website AND all the contact links they provided me lead NOWHERE. I had to email some sales guy to get my issue addressed. Epic sucks as a company and THAT’S why I won’t give them my business any longer.

    1. I’ve got no issue with Epic exclusives. I think people spend too much time confusing the matters of market monopoly with individual product ‘monopolies’ (that’s like complaining that “ABC Brand Coffee” is only available to buy in Tesco, that doesn’t really fall under a ‘monopoly’ as you buy different coffee in the same way you can buy a different FPS game)

      anyway, my history is on computer gaming, Dragon32 in the 80s (anyone remember that?), C64 in the 80s, Amiga in the 80s/90s, PC from the 90s onwards. I do have a PS4 and Xbox One as well, but my long history with games is on the PC.

  10. Who cares? I refuse to use the Epic game store because I have enough damn passwords and accounts and launchers to keep track of. I decided to stick with steam and gog and if a game is not on those platforms I’ll just play something else.

    Besides, eventually the Fornite cash is going to dry up and Epic will have to stop giving free money to gamers and developers. Then everyone will be mad at them for a different reason.

  11. I like how you plug tesla :D
    But yeah, replace epic with steam in the late 00’s replace epic with MS in the early 00’s Sony before that and Nintendo (by forced!) before that!
    Kids these days are so narcissistic and malleable by social media that they don’t know better “Anti consumer” whaa….RRRRrrrreeeeeee hahahaha xD

    Oh the new earth worm Jim is a Intellivision Amico exclusive!

  12. I didn’t want Steam when it started and was forced to get it (for HL2) and now I have everything on it. I don’t want another library system, but will inevitably be forced to use Epic at some point. I kickstarted Phoenix Point and am annoyed that it will not be on Steam, but an Epic exclusive. It feels like a breach of contract (or at least a failure to meet my expectation).

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