Steam’s Business Model Is “Unrealistic” According To Ubisoft

 

Ubisoft isn’t too impressed with how Steam is doing business these days, at least that seems to be the case according to Chris Early, the publisher’s Vice President For Partnerships And Revenue, as stated when speaking to the New York Times. Additionally, it’s apparent that he’s not the only voice critical of the monolithic digital game retailer either.

While the Epic Games Store might draw a lot of controversial opinions from users across the internet, the general sentiment from within the industry seems to be that Valve’s steep 30 percent revenue cut and hands-off approach simply isn’t cutting it, so to speak. While it’s not uncommon for game reseller-based platforms like Origin or Steam to be used almost daily, and would largely be considered a necessity in hosting games, there is a new uneasy opinion forming around the revenue of these platforms. Ubisoft still sell many of their games via Steam, there are some titles (such as The Division 2 and Anno 1800) which are available only through Ubisoft’s own digital store, Uplay (where the publisher naturally claims 100% of the takings) and the Epic Games Store, which takes a significantly lower 12% split of the profits.

Speaking to The New York Times, Early said the company’s business model, as it stands today, is unworkable.

“It’s unrealistic, the current business model they have. It doesn’t reflect where the world is today in terms of game distribution,” he said.

It’s not exactly completely clear what part of Steam’s business model Early would be speaking about. Although, it very well may be in reference to the revenue split that Steam offers. Typically, Steam tends keeps 30 percent of game sales, with 70 percent going to developers/publishers. By contrast, the Epic Games Store offers much more to the people who make games; on the Epic Games Store, 88 percent of revenue goes back to developers.

In the article, The New York Times also spoke to developers like Greg Kasavin (Supergiant Games) and Tommy Refenes (Team Meat), who both point out that things can be improved across the board, and that it’s going to take competition between big, well-funded studios to make that happen. “The console cycles were always best when the rivalry is heated”, says Kasavin.

Even with major publishers like EA Games and Ubisoft able to lend their reputations to one side or another, they have their own ambitions moving forward in the gaming and entertainment industries, respectively. EA’s store, Origin, already offers Origin Access, a monthly subscription service giving access to almost all of their games. Ubisoft are also rolling out their own similar competitor, Uplay Plus, throughout September, and on the horizon, we’ve got Google coming out with their own streaming service, Stadia which will only become more viable of a business model over time, further challenging the concept of ownership of games and even the hardware that they’re played on. Epic and Valve, of course may be at the top of the leaderboards right now, but according to the developers and publishers the NYT spoke with, there’s no doubt potential for far more disruption than mere timed exclusives between rival stores moving forward.

Epic CEO Tim Sweeney is also quoted in the story, as he spoke about how game stores are now known to “extract an enormous portion of game industry profits.” As such, they are “ripe for disruption,” he said in the article.

Super Meat Boy developer Tommy Refenes was also quoted in the piece, referencing how he talked about how he believes the video game business needs better systems for buying and selling games. “The only way we’ll get it is if companies with tons of money are innovating and trying to outdo each other.”

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