When you sell your game on Valve, the company takes 30 percent of your revenue for using it as a platform for distribution. It’s a common practice for business such as PlayStation and Xbox but Valve has been criticized lately for their user review system and lack of marketing support for new games. Steam is packed with thousands of games and nearly impossible to filter through them all. It’s difficult for developers to sell their game if they don’t understand Steam’s algorithms. They weren’t able to contact a Valve personal support and developers felt that the company didn’t “deserve” the 30 percent in revenue. To potentially earn developers’ trust again, Valve is offering them more money based on the success of their games.
Stated on November 30th, Valve stated
Starting from October 1, 2018 (i.e. revenues prior to that date are not included), when a game makes over $10 million on Steam, the revenue share for that application will adjust to 75%/25% on earnings beyond $10M. At $50 million, the revenue share will adjust to 80%/20% on earnings beyond $50M. Revenue includes game packages, DLC, in-game sales, and Community Marketplace game fees. Our hope is this change will reward the positive network effects generated by developers of big games, further aligning their interests with Steam and the community.
Valve is also allowing developers to speak about their game sale on Steam.
Who does this benefit?
A lot of big brand name titles such as Fallout or Call of Duty will see bigger profit margins. However, smaller companies and developers will still have difficulties presenting their games to a mass audience. There are too many games on Steam, especially because any game can be on their market.
The changes are to incentivize more companies to put their games on PC only through Steam. With more companies hosting their own platforms such as Blizzard’s BattleNet, Ubisoft’s Uplay, EA’s Origin, and Discord, Valve has more competition. While their competitors have less selection, it’s easier to search and find a game you enjoy.
The profit changes won’t hurt Valve too bad. It’s rare for a title to make that much on Steam alone unless you’re a huge publisher. The mass majority won’t even make $10 million but bigger companies may just place their games on Steam to save money.