Indie Developers Don't Like Steam's New Revenue Sharing Policy

Steam is constantly evolving behind the scenes, but the latest reorganization of the storefront’s molecules has left some developers scratching their heads. Now, if a game makes $US10 million, developers have to share less money with Valve. And if it hits $US50 million, even less than that.

Valve announced tweaks to Steam’s revenue sharing system in a post last week. Previously, all developers had to give 30 per cent of their revenue to Valve. Now, if a game makes $US10 million, its developer only has to toss 25 per cent of earnings after that into Valve’s bottomless money abyss.

If it makes it all the way up to $US50 million, the developer only owes Valve a 20 per cent cut of remaining sales.

“The value of a large network like Steam has many benefits that are contributed to and shared by all the participants,” Valve wrote. “Finding the right balance to reflect those contributions is a tricky but important factor in a well-functioning network. It’s always been apparent that successful games and their large audiences have a material impact on those network effects, so making sure Steam recognises and continues to be an attractive platform for those games is an important goal for all participants in the network.”

Meanwhile, smaller developers, who make up the bulk of Steam’s library, will still owe Valve 30 per cent of their earnings. These developers might be lucky to sniff $US1 million, let alone $US10 million or more. In a marketplace where it’s increasingly difficult for even the most enterprising indies to gain a foothold, developers are bewildered by Valve’s decision to make things easier for the biggest games, which already have it easier in terms of exposure and money-making potential.

Some developers see the move as a way for Valve to keep bigger games on Steam’s platform. “Valve statement, paraphrased: ‘Don’t worry, big game productions, we’ll happily subsidise 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,” said Vlambeer’s Rami Ismail on Twitter.

“Just please don’t launch your own store.”

In recent years, an increasing number of major games have eschewed Steam to launch on publishers’ own stores—for example, Call of Duty: Black Ops 4 is on the Blizzard’s Battle.net, EA’s games release via Origin, Fallout 76 is on Bethesda’s launcher, and Fortnite is on Epic’s.

“So excited to have Caves of Qud subsidise Red Dead Redemption 2,” wrote Freehold co-founder and Caves of Qud co-designer, producer, and programmer Brian Bucklew.

“I hope all of Valve’s customers are interested in having the tiny studios doing interesting things on razor-thin budgets paying for the next Fallout 76.” In a later tweet, he expanded, “This change by Valve is (presumably, clearly) specifically meant to court those games back, or prevent further flight.”

Some just don’t see the point in helping out games that are already so fiscally successful. “Steam just changed the rules so that games that make millions of dollars earn a higher % of their revenue, so the richest get richer,” said Wandersong developer Greg Lobanov.

“What a slap in the face to the rest of us.”

“If Valve is willing to drop their revenue share on games that make 90% of the revenue of Steam, why not create some goodwill with indies and extend that to the 99% who make up for that last 10%?” said Hidden Folks designer Adriaan de Jongh.

On top of that, all is not well in the steamy metropolis of Algorithm City. Multiple small developers have claimed that Valve changed Steam’s game discovery algorithm in October, drawing significantly fewer eyeballs to their games’ store pages.

Grey Alien Games owner and Shadowhand developer Jake Birkett wrote a lengthy post about the issue in which he chalked up initial discovery issues to a bug that caused Steam to only recommend “some big name games instead of relevant games.”

Birkett claims that Valve “quickly” fixed it, but smaller developers’ traffic from the Steam home page and “other product pages” hasn’t recovered. This is hitting some developers where they were already hurting: their pocketbooks.

“I compared full price sales before and after the October bug (being careful to avoid weeklong sales and Steam sales), and my total units sold have halved,” said Birkett.

“It is clear that Steam is favouring triple-A since Oct,” wrote NeuroVoider developer Thomas Altenburger.

“All the big players are vampirizing the store, and it is very likely that you saw no indies since October in a pop-up. Since October, we have 75% less revenues.”

Simon Roth, creator of long-in-development Dwarf-Fortress-inspired simulation game Maia, finally took his game out of early access recently, only to discover that the algorithm rained all over his years-in-the-making parade.

Posting a chart in which his page traffic dropped beginning in October, he said: “No doubt that cost me dearly on launch too. Great.”

While Valve at least explained its rationale surrounding the revenue share changes, it has yet to clear the increasingly murky air surrounding the discovery algorithm. Kotaku reached out to Valve for an explanation, but as of writing, the company had yet to reply.


Comments

    Valve are not your friend - they are a business. So many people have been championing Steam as the platform to end al platforms - now people have to deal with them altering the deal. AAA titles are always going to be the drawcard for the platform and are also the ones that could more easily jump to their own distribution platform - they can get exposure easily.

    The indie market is flooded and Steam is an endless noise of games these days. Indie development is going to become harder and harder and there’s limited appeal in hosting loads of indie games that don’t sell very well and don’t have significant appeal. Time to look at other platforms like GOG.

      It's a hard, bitter pill to swallow, but a very real problem is that these indies are not metaphorically 'stuck in traffic' - they ARE the metaphorical traffic.

      I want to play them all. I do not have the time. If I retired TODAY, I still would not have the time. I only just now heard of Maia, from this article. I just looked it up. That shit is my jam. It's now on my wishlist. Hell if I know when I'm going to buy let alone play it.

      I do not know what the solution is. Don't create and expect to get paid? That doesn't seem like it can or should be the answer, but hell if I've got anything else.

      Last edited 04/12/18 4:04 pm

        “Don’t create an expect to be paid” is exactly the truth though. These are ultimately luxury items, not essentials, and we’re spoiled for choice. We see lots of articles when indies fail about how “tragic” it is and how hard it is to be in the indie sector, but there’s zero requirement to prop up developers if their games simply aren’t good enough to stand out. Yeah, it’s tough - but as consumers, it’s not our problem. Devs just have to accept that their best may not be good enough and they may fail, and that sucks for them but changing the revenue cut doesn’t suddenly make mediocre or niche games better than they are.

          Yep. Exactly this. I'm a filmmaker and if i never get paid I'll still be doing it. Because i love it. It's a crowded market and no one has time to see everything. You have to make stuff that's amazing or just live with the fact that average nets you nothing.

          Expecting to get paid just because you've completed a project is like expecting to get laid just because you've put on clothes that day. It take a LOT more than that!

      I'm time poor. I pretty much ONLY play AAA games now. I've never been into indies. So this works well for me. I want all the big games on one platform so it makes it easy to find deals etc.

        Same here, with shift work I just don’t have the time to play many games, so I stick with what I know I’ll enjoy, and AAA games or big name “indie” titles are going to get my money. Valve know that.

        There’s a mess of indie titles these days and many of them lack mass appeal or aren’t anything special. Not every game deserves to succeed or be promoted, especially when there’s already so much noise in the market that it’s hard to find quality games.

          Not every game deserves to be on the platform but that horse bolted long ago.

    For what it's worth, I've put several hours into the RPG/card-collecting'ish solitaire game Shadowhand, mentioned in this story, and very much enjoyed the time I spent with it.

    ...When I am done with spidey DLC, RDR2, Odyssey, and other AAA distractions, I will probably return to spend a bit more time with it.

    What hyperbole.
    First: indie devs aren't paying more or getting less in this new scheme.
    Second: Money that indie devs are losing to Valve in the form of the 30% cut is not being given to big publishers, Valve is taking a loss on large game sales.

    What is actually happening here is Valve are taking less money from publishers that don't need Valve's store as much, in order to increase the chance that they'll stay on Valve's platform. If the game sells $10M+ then clearly the game was gonna sell for around that without Valve. Whereas an indie developer may only become known thanks to Valve and their platform, as such, the indie "owes" more of their success to Valve.

    The idea here is to increase the amount of money Valve has, that's always Valve's goal. So if Valve aren't taking more money from indie devs, and they're taking less from big devs, they are clearly banking on selling more AAA titles under this arrangement. We can also be pretty sure Valve wouldn't have done this if they hadn't already reached an agreement with some unnamed publishers to have their games on Steam as a result of the scheme.

    The true goal was in single sentence of the article.

    This is to entice big games to keep releasing on Steam, a effort to stop them from using their own platforms (Fallout 76 is only on Bethesda launcher, all other Fallout were release on Steam). Big game companies are Valve's true customers, they are the ones making the games that Valve is just the middle man in supplying.
    You and me are the the thing being sold by Valve (14 million users!, so much access, easy of distribution, other corporate buzz words.)

    I can see how everyone wants the cut to favour their side.
    But that tweet making out they are somehow subsidising the companies like rockstar.... Uhh, get over yourself mate. You're paying the same cut as you have been to valve as you were before.

    I think valve should work on a way to not only advert the big AAA games to draw people into steam, but they need to work on really showing the great Indies on the platform to help get quality to the front page.

    Aside, I think kotaku does a good job of showing off quality Indies.
    I feel as they could do more though, as a lot of Indies they do feature are often the ones that have kind of already 'made it' on other sites.

    But anyway, good luck out there Indies, all of the creative industries are very difficult to make it in.

    I can't really see an issue with them offering a discount to the games that make them the most money, if it stops them going elsewhere.

    The issue as I see it is 30% commission, that seems really steep in general. I guess they get more sales than if they weren't on steam but maybe all the small developers should band together and make their own games platform instead?

      There are a few groups trying to do something like that, one that was reported recently is Kartridge.com by Kongregate. They're on the very indie side of the spectrum, at least right now.

    Seems more to me like the indie devs are over reacting here and being a bit butthurt because big games are getting a bigger cut and they miss out. This isn't about an indie game funding a big one (seriously wtf, that comment makes no sense) this is about Valve keeping money coming in.

    They've noticed the trend as have the rest of us that big publishers are launching their own stores and forgoing Steam. They figured out that it's not profitable to make their own store for one game but when they count in the next 5, 10, 20...? Profit.

    This is Valve's attempt to get big games back on Steam before Steam dies out and just becomes the place you go for indie games and lets face it that's more of a trash heap of shovelware that no-one really wants to play.

    It's less about "rewarding" the big companies and more about enticing them to come back.

      I don't think anyone who's gone an invested in their own online store will come back, but they definitely want to stop more people leaving. Like you said, it's a trash heap now. Navigating steam is almost impossible now.

    I'm fairly sure this is 100% a reaction to Bethesda not selling Fallout 76 through Steam (and it looks like Valve dodged a bullet there anyway).
    Valve need to make their platform attractive to big companies, and the only way to do that is offer them a bigger cut.

    I've dabbled with creating games, and decided ages ago that if I ever make something I want to sell, I'm happy to let Valve have 30% to distribute it. That way I don't need to handle payments, refunds, product keys, or distribution....
    Back in the days of floppy disks and CDs, you'd have been doing really well to see 70% of your RRP as an indie developer. The distributor would take a cut, the wholesale warehouses would take a cut, and the retailers would take a cut. Each one of them would want to see at least 30% return on their cost, which adds up.

    I just like how somewhere in Valve, this will keep developers like Bethesda and Ubisoft exclusively selling their games in their own stores and avoid Steam. A 10% discount after Valve scams $13 million in commissions (that aren't sales commissions, cause the publishers have to do their own marketing and influencer deals)

    hmm as a steam user for over 15 years, I can say that AAA games are the highlight of Steam.
    Don't get me wrong- I love indie games too- however finding a good indie game is a lot harder than finding a good AAA game. When there are less AAA games the platform is weaker for it.
    Instead of complaining about the change, I would recommend indie devs realise that these AAA games bring more potential customers. Think carefully about who those customers are and what they want and start marketing better towards them. You can do things big publishers can't do (ie. go to market/iterate quickly) and they can do things you can't do (lots of content, annually). Don't try and compete with them on content. Compete on game design.

      Indie dev: "I'm going to itch.io because Steam doesn't give me a fair shake!"

      Indie dev later: "Holy crap, my itch.io sales are in the toilet. Why aren't people buying from a store that no-one has ever heard of? I can't believe that the sideways glimpses from the primarily-AAA audience on Steam is outweighing the few enthusiasts who frequent a platform dedicated exclusively to less-polished, smaller games."

      I think another part of the problem is the indie perception of the role of publishers. Publishers are very good at certain things: legals, marketing, distribution. Many indie titles can probably point to those factors as the difference between commercial success and failure, rather than the quality of the product itself.

      The problem is: somewhere along the way, publishers became less 'vendor that you contract to provide those services' (that they're very good at), to being funding arms, venture capital, taking ownership of the studios and their IP as part of their efforts to secure ROI for their investors, exerting creative control to minimize risk and maximize profit.

      Some publishers like Paradox and Devolver seem to be closer to the 'service supplier' side of the scale than rights-consuming creative black holes like EA, but I feel like developers, artists, and designers aren't putting enough stock in the return provided by the publishers, seeing only creative restrictions, loss of control/ownership, and costs that they haven't seen the value of.

      It seems almost as if they'd rather try do it themselves, annoying reviewers with review-copy spam, mistaking that for 'marketing', and hoping that someone somewhere with enough influence or subscribers will be inspired to champion their brilliance, leading them to the fabled self-publishing jackpot nirvana that only a few indies have managed to achieve over decades.

    I would be ok with this if their wasn't the evidence that indies are now getting less exposure than they were before and paying the same commissions! The whole idea of steam is to get the exposure to it's users, if indies aren't getting consistent exposure and a reduction in sales, then a) steam are only hurting their commissions on said sales, and b) diminishing the value of their platform to all their indie dev's, which make up the vast majority. To me it's pretty fcn dumb to adjust their algorithms to favour a few AAA games(while taking less commission) over the vast majority of games on their platform.

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