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naznatips on 25 February 2010
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mrstickball said:
naznatips said:
mrstickball said:
Monsta - that assumes that the DD website gives them 100% of the revenue. Not the case.

Steam is a 60/40 split in favor of the developer. So a $50 game would earn the developer $30. Better than retail, but given the size of the sales base...May not be the be-all-end-all proposition for publishers to make money.

You completely made that 60/40 number up... while I don't have exact numbers for Steam royalty rates (there's a very strict NDA on such things) numerous actual game developers have stated it's very generous/lower than everything else out there, and they take a smaller cut than retailers:

http://www.neoseeker.com/news/12017-tripwire-steam-does-not-exploit-indie-developers/
http://seven.pairlist.net/pipermail/casual_games/2009-January/003651.html
http://www.neogaf.com/forum/showthread.php?t=300537&page=3
http://forums.steampowered.com/forums/showthread.php?t=888033

60/40 would certainly not be a smaller cut than retailers. Another says they have a comparable fee to Xbox Live Communities, which suggests that they are actually lower than even the retail licensing fees of the 360, PS3, and Wii. Valve also varries rates depending on the type of game like Nintendo and Sony (indie games and small games cost less).

I'm really getting tired of you accusing me of making things up:

http://steamreview.org/posts/finances/

Developers

    “Revenue sharing with developers under the Steam system is 60/40 (developer/Valve).”

Profit margins for developers are a major selling point for digital distribution, and Steam does not let the side down. I’m pleased to say that there are now figures as accurate as possible for each margin: 10%-20% for traditional retail/publisher deals; roughly 60% for Steam developers; and an incredible 86% for Valve themselves. Add to that the fact that Valve doesn’t take the developer’s IP and the effective margin becomes wider still.

These sorts of numbers aren’t easy to come by for distribution services, but it isn’t unreasonable to say that the 26% net margin difference between Valve and their Steam licensees is quite wide. Perhaps when xStream ramps up we’ll see some healthy competition.

And http://www.gamedev.net/reference/articles/article2271.asp:

The Q&A session brought to fore the following:

  • Valve is not ditching the retail system, as 75% of their business still comes through them.
  • Revenue sharing with developers under the Steam system is 60/40 (developer/Valve).
  • Developers will not need to use Source in order to use Steam.
  • Mike encouraged developers to separate their retail distribution contract from the digital distribution contract/rights. Hold on to them separately and not together. Control in your distribution is essential in maintaining good profit margins.
  • Valve also experienced problem with returns using Steam. But these are only less than 1% of the sales received. The problems are commonly in the form of charge backs from banks upon rejecting certain transactions upon the customer's request. This will need to be addressed when the number grows more significantly.
  • The cost structure of Valve's game is roughly 3% for customer support, 10% for bandwidth, 1% for payment charges and the rest is the profit margin. Reasonably good margins.
  • Steam distribution's success is shifting Valve into trying out episodic gaming distribution next.
  • Marketing function should be kept within your own company, essential as it helps create identity. This identity will be specific to your company and therefore, must be guarded.

But if you want to accuse me of things, you can. I will not put up with that, however. I guess this will be my last post in the non-OT forums.

I apologize, you didn't make it up, but you completely misunderstood what it's saying. That's steam publishing the game for a developer directly. Understand that under normal circumstances a publisher will pay an indy dev only 15%-20% for their game to publish it, and will also steal IP rights. This is Steam publishing the entire game, giving a 60% cut, and not touching IP rights.

For publishers it's stated explicitly in your own link that they take a 10%-20% standard cut, which means none of the additional fees apply. In other words your numbers were invalid to the discussion at hand.