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Gamasutra: Simon Carless’s Blog-Will Apple’s 15% Platform Cut Change the Game?

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[This piece was originally published as part of the GameDiscoverCo game discovery newsletter, which is written by ‘how people find your game’ expert and GameDiscoverCo founder Simon Carless, and is a regular look at how people discover and buy video games in the 2020s.]

As you’ve probably heard, Apple has announced the App Store Small Business Program. This is a major and permanent change to the flat 30% platform cut for iOS (and I think Mac) App Store apps and games.

change “Reduce App Store fees for small businesses that earn up to $ 1 million annually to 15%.”This means that every game developer earns less than $ 1 million a year on every app (after Apple’s savings) and an additional 21.4%.

Obviously, most of iOS revenue now comes from large-scale free play for playing games and subscription apps. There is a quote for this Reuters work (although it’s a total of $ 1 million, not $ 1 million after Apple cuts). “According to Sensor Tower, 97.5% of iOS developers generate less than $ 1 million in total annual spending, but those same developers contributed only 4.9% of the App Store’s 2019 revenue. Is not.”

So this affects a lot of developers-which is great, but I really don’t know many game developers who regularly live in this kind of revenue range at Apple. (I’m definitely doing it on Steam!) But that doesn’t affect Apple’s major app / game partners.

This is interesting. That’s because Apple wants to maintain good relationships with its biggest partners. And this suggests a real problem. Apple’s big customers (including Epic) are already angry with them and are trying to get the Western government to address antitrust concerns. (Or in the case of Epic, they are completely sued.)

So I definitely read this move-although generous in summary-as Apple’s window dressing against possible future government proceedings. And in fact, Apple PR is repeating that revenue. “For apps that sell digital products and services and generate more than $ 1 million in revenue, the App Store’s standard commission rate of 30% continues to be maintained. Earlier this year, an independent study by an analytics group found. Apple’s fee structure has become mainstream. App distribution and game platform. “

But what about Steam, Sony, Microsoft, and revenue cuts?

What does this mean for other platforms? Well, Valve already called Steam in November 2018, but the call was the opposite: “For all sales between $ 10 million and $ 50 million [of a single game on Steam], The split will be 25 percent. And for every sale after the first $ 50 million, Steam saves only 20%. ” Valve cites the “network effect” of a large game that attracts more users to Steam.

In a typical Valve format, this is accurate and true in terms of engineer-driven logic, but it’s not a very good PR for small developers. Ultimately, the move is “richer get richer”. In fact, major publishers such as EA, Microsoft and Sony have recently added titles to Steam. And I think Sony and Guerrilla’s Horizon Zero Dawn: Complete Edition is already in the 20% revenue savings range.

Of course, Epic considers 12% to be the correct platform cut (see above). However, I haven’t actually purchased the “reverse engineering cost” approach as the ultimate determinant of the price of a for-profit company that can charge what it needs. Even Sweeney and her friends don’t, for example, because of the cost and revenue of making Fortnite skins, right?

And, unlike iOS, Steam can’t easily claim to government regulators as an unfair monopoly on open PC video gaming platforms, given that players can choose their favorite store. think. By the way, companies like Epic are already competing to take advantage of price discrimination.

(By the way, I found this editorial on Apple’s “15% biased tactics” interesting. You might agree that mobile and AR / VR devices should also have a complete choice of store and payment platforms. But I’m not sure about this choice on the PC. It brought a very different $ experience for small and medium-sized game developers, but large companies can distribute it independently.)

Sony and Microsoft, or Nintendo? They have clear competitors and are actually migrating to other platforms for streaming purposes, so there aren’t many calls to change the 30% reduction. (Maybe it means that a limited set of platform-approved developers also creates tension and hesitates to encourage creators?)

What is the conclusion?

I think this is ultimately a matter of capitalism. It looks like this:

– Company Get there first and maybe do a good job
Gain market share of the platform and generate excessive profits
-Because it’s a company Answers to shareholders, not the developer community
――Yes The “developer fairness” debate directly conflicts with profit motives
(This was also a problem with the company I used to work for.)

There is no easy fix. Personally, I would like to see more solutions owned by essentially investors, such as the egalitarian investment firm Vanguard Group (created by index fund pioneer John Bogle). .. Therefore, no external shareholder has a different motive. Many traditional financial investment firms charge an annual fee of 1% or more for index funds, and Vanguard often costs less than 0.1%.

How does this work in the game? Well, you need to have a company like:

Had a very large market share as a platform
-And I’m willing to switch to a model that provides share to all developers based on sales
-And Then let the developers manage the company’s strategy and pricing As a shareholder. (Non-profit models can also work, but they tend to get confused over time.)

This whole concept is, well, probably a difficult order. As explained in a recent newsletter, the market share of Itch.io, the most egalitarian platform on the PC today, is quite small. So you can have the right intentions, but you can’t have a share to make a difference. But I think it’s nice to have a dream target model, right?

(Last caveat: in most cases, if the game doesn’t make as much money as you think, it’s not the additional 21.4% of revenue that makes the difference whether you make it or not. It’s generally the game’s It’s a broader supply and demand issue.-There aren’t enough players for some reason. It’s important not to confuse it with the% cut issue.)

Summary of Game Discovery News ..

It’s going to be Thanksgiving week here in America, so I think it’s going to be a quieter time. (I hope everyone is socially distant and maintains a small social circle, as you should!)

But no, much is happening in every way. And this is a huge summary of some things you should be concerned about with the platforms and discoverability you might have missed:

  • Two upcoming Steam things to watch out for: First, you can submit a demo of an unreleased game from the February 2021 Steam Game Festival until December 2. I highly recommend you do so-the short and sharp festival demos that may be picked up by streamers are the best demos! And second, Fellow Traveler’s Narrative Game Fest Ludo NarraCon is back on Steam from April 23-26, 2021. If you are interested in their official website, you can sign up.

  • Following GameDiscoverCo’s first week’s Steam $ sales survey, Kyle Kukshtel created an interactive web page. This allows you to plug in your launch wish list / cost (or Steam’s total revenue for the first week) to get your total Steam revenue up to the fifth year (Warning: If you’re spending money, the world Use average price. Wishlist conversions can get worse. This is all a huge clap shoot. But this is a fun indicator of thinking experiments.)

  • The performance of the remake of FPSXIII (which itself is based on a Belgian comic book) by Microise / PlayMagic in the early 2000s was, well, very terrible.And ICO Thomas Bido I did some research And it hurts: “Currently there are a total of seven games available on Steam, which are overwhelmingly negative. XIII is the only one with less than 10% of positive reviews. It’s also the first in its range released after 2017. It’s also a game. “ (The development team has blamed the pandemic, but when the game was released, it looked like a big expectation mismatch as it was number two on the GameDiscoverCo Steam Hype weekly chart.)

  • That “Katamari Damacy of Medium / Large Publishers-Integration of Small Developers” trend continues. In addition to the recent acquisition of Microsoft, some indie publishers are still doing that-Devolver bought Croteam after working with them for a long time, Curve bought For The King developers, and of course, There was an Embracer Group and picked up 13 other studios. A day including Pinball Don Zen Studio and Flying Wild Hog (laughs!). Featured trends …

  • It seems that it is still a little difficult to deploy the PlayStation 5 store UI. For example, the PS5 didn’t have a “deal” section (do you think it’s like a one-time section until the Black Friday-only section is added?) Comments on the article are on the WebPS store. Not a fan, either: “The new store is slow to load on my PC (using Chrome) and I still don’t see my wishlist in the store … Digging into mobile transactions (or the entire store) is one big mess. I have to say. Unnamed repeating icons or their microtext. “

  • Cloud Gaming News: Of course, Nvidia’s GeForce Now debuted via Safari and everyone is adopting a web page approach to iOS cloud gaming distributions-and “Nvidia and Epic Games said Fortnite will soon be coming to Safari for iOS with touch controls.” eh! And in terms of Google: “… In the coming weeks, we will begin public testing of the Stadia game service via the iOS web browser.“ This will be the first phase of iOS progressive web applications, ”the company said. Let’s take a look at what user recruitment looks like in this slightly tedious way.

  • We’ve delved deeper into Stadia and actually delved into this overview from The Verge, the first year of the cloud platform, and the outlook. “Assassin’s Creed Valhara and the long-awaited Cyberpunk 2077, released on December 10th, [are] An important moment for Stadia. These releases … will define Stadia in the coming months and [Google’s John] Justice knows that it’s imperative that Google treat the massive holiday launch of CD Projekt Red as a moment of success or failure of the platform. “

  • Microlink: Congratulations to the Game Awards nominees for a wide range of games. It’s interesting to check out the games in the Top 20 Epic Games Store and see the Rossa PS5 launch titles there (Godfall has done a great job despite a decent review, Bugsnax, ThePathless). Superdata is currently trying to cover the revenue of its subscription services. “Total revenue [from Xbox Game Pass, PlayStation Now and EA Play] The number of subscribers in October increased by 142% year-on-year, and the number of subscribers increased by 113%. “

And finally, this week we’ll talk about the number of games sold at GameDiscoverCo. And it is the 30th anniversary of the launch of SNES / Super Nintendo in Japan. (By the way, Super Mario World is my favorite game!) So what’s finally better than the best-selling Super Nintendo game ever?

[This newsletter is handcrafted by GameDiscoverCo, a new agency based around one simple issue: how do players find, buy and enjoy your premium PC or console game. You can now subscribe to GameDiscoverCo Plus to get access to exclusive newsletters, interactive daily rankings of every unreleased Steam game, and lots more besides!]

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