New Steam Revenue Splits Upset Indie Devs

A recent change to the Steam marketplace makes it so Valve will take a smaller cut of a game’s earnings if it reaches certain sales milestones. This change has sparked debate among smaller developers about Valve’s decision to make things easier for bigger games.

How it works

Under Steam’s old system, all games split their profits 70/30 with Valve. In the new system, the split moves 5% in the developer’s favor when a game makes $10 or $50 million. The total revenue includes DLC, game packages, in-game sales, and Community Marketplace game fees. Valve also adjusted their confidentiality policy to let developers talk openly about game sales.

Steam has been facing some short- and medium-term challenges as of late. Publishers are choosing to release their games under their own distribution systems instead of Steam. Bethesda skipped Steam to sell Fallout 76 via their own launcher, Fortnite is on Epic’s store, and Call of Duty: Black Ops 4 is sold through Battle.net. Meanwhile, Discord has thrown their hat into the ring of video game sales. This change seems to be an attempt to retain larger games and their developers. However, smaller indie developerss are bewildered by Valve making things easier for bigger games while indie games have great difficulty getting a foothold.

“A slap in the face.”

A variety of indie developers have spoken up about this change. Wandersong creator Greg Lobanov is pretty displeased by the change:

In theory, they’re supposed to “earn” their 30% cut by promoting your game to a bigger audience. But games that aren’t already popular are also disfavored by the algorithm. So people at the bottom literally get less, and now, pay more.

— Greg "Wandersong is OUT NOW" Lobanov (@theBanov) December 1, 2018

It’s obvious they did this to appease the biggest money interests… but it’s not good for the health of the gaming community or market. Niche, experimental games that broaden their audience like wandersong are impacted by these decisions.

— Greg "Wandersong is OUT NOW" Lobanov (@theBanov) December 1, 2018

Others who were upset by the change include Hidden Folks creator Adriaan de Jongh, Caves of Qud developer Brian Buckley, and Rami Ismali of Vlambeer, developer of Nuclear Throne:

Valve statement, paraphrased: "don't worry, big game productions, we'll happily subsidize your increased income with the broken dreams of aspiring devs that fell just short of making it because they have no leverage and we don't care.

Just please don't launch your own store"

— Rami Ismail (@tha_rami) December 1, 2018

However, other indie developers are less critical of the change. Kevin Simmons, who works at West of Loathing developer Asymmetric, says that Valve needs to retain their AAA market and losing them would cost everyone money due to less people on Steam. Meanwhile, Freya Holmér, co-founder of Budget Cuts developer Neat Corporation, falls somewhere in the middle on the whole debate:

But the alternative is that the rich get *even richer* off-Steam, not bringing more people to Steam at all, making it a less viable platform for everyone involved, including indies, as well as forcing players to another client that *don't allow indies at all*

— Freya Holmér (@FreyaHolmer) December 1, 2018

Although that being said, Valve could likely afford a flat 20% for everyone, and that would help indies as well as AAA studios. However, I think we should at least be happy revenue share is getting better for developers, even if it doesn't help everyone just yet

— Freya Holmér (@FreyaHolmer) December 1, 2018

The new changes help confirm that larger games get preferential treatment. However, the big question is if this is done solely for profit or if there are other factors at play.