Gamasutra: Simon Carless’s Weblog – Three key discoverability takeaways from the Epic/Apple lawsuit


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[The GameDiscoverCo game discovery newsletter is written by ‘how people find your game’ expert & GameDiscoverCo founder Simon Carless, and is a regular look at how people discover and buy video games in the 2020s.]

Pay attention right here, we’re again once more, and we’ve received a e-newsletter which options… oh no, the Epic/Apple lawsuit. Haven’t you all heard sufficient about that already? Effectively, we agree that there’s been a number of protection.

However not many shops have gone deeper into what GameDiscoverCo cares about. What does the information uncovered by the invention course of of the trial – the 1000ft view of which we analyzed a few weeks again – present us about which platforms are good to make video games for? And the way has Epic Video games Retailer itself advanced? Let’s do it.

(PSA: in the event you aren’t signed as much as GameDiscoverCo Plus, our premium tier, you’re lacking a useful member-only Discord server, customized researched sport hype/gross sales evaluation newsletters, a Steam information backend, & extra!)

#1: Platform splits for Epic titles would possibly shock?

One factor we very a lot care about is how video games promote throughout a number of PC/console (and cell!) platforms. So it’s nice that, as a part of the trial discovery course of, an Excel doc has been made public with Epic-owned video games’ month-to-month income on all sport platforms.

It’s a giant/scary doc, however we will distill this down for you by presenting common gross income (earlier than platform cuts.) Firstly, right here’s what Fortnite regarded like for the 18 months ending July 2020. (Beginning in August 2020, the sport was pulled from the iOS App Retailer, so the comparisons break down.)

That is fairly fascinating. Once I posted this on Twitter, most individuals’s reactions have been that PC income was a bit decrease than anticipated, console (and particularly PlayStation!) was larger, and the iOS vs. Android income distinction was far larger than you may need thought.

And I’d agree with that. On iOS/Android, there is perhaps a few causes – firstly, the Android {hardware} base is fragmented (has a number of lower-spec telephones that may’t run Fortnite), and the shop ecosystem is fragmented (the corporate ran a standalone Android launcher for Fortnite, then moved onto the Google Play Retailer, then pulled it off once more.)

As for PC vs. console gross sales information: we’ve talked about platform share for smaller PC/console video games earlier than. Under is a few nameless information we received about first-week gross sales by proportion. You’ll usually see the platform gross sales rating – in descending order – as: PC, Swap, Xbox, PlayStation:

However for social-centric F2P phenomena like Fortnite, the state of affairs could be very totally different. Clearly, the demographic that performs Fortnite is more likely to have higher-end console {hardware}, or not less than, is extra more likely to pay on these programs.

Oh, and as a bonus, right here’s Fortnite’s downloads, DAU and income throughout all platforms within the final quarter of 2019 (from this worker onboarding doc), exhibiting cell monetizes considerably much less properly:

Lastly for this part, right here’s the month-to-month grosses for the Epic-owned Rocket League for the yr to July 2020. These are the type of numbers I’d anticipate for a ‘cross-platform hit’ which began on console, and got here to Swap later.

(BTW, Rocket League went F2P and new PC sign-ups shifted from Steam to Epic Video games Retailer proper on the finish of the income information we have now. So we will’t simply see what occurred. There’s a massive projected enhance in income, although.)

#2: Epic Video games Retailer lives and dies through exclusives

We sadly don’t have information on this from 2020. However there’s an Epic Video games Retailer October 2019 ‘evaluate of efficiency and technique’ doc which has been the supply of a number of essentially the most fascinating retailer traits information. (Extra on this in #3.)

However you get to see a number of information from the primary 9 months of the shop, together with tremendous fascinating charts comparable to annotated every day income:

What’s very clear – at the moment – is that retailer income is powered by paid-for exclusives. You possibly can see the spikes round specific sport launches, with Metro, The Division 2, Passable, and World Conflict Z being the preliminary 2019 winners. All of those titles had assured advances within the tens of millions of {dollars} – so Epic would pay out, even when it didn’t promote.

However then take a look at the interval after the primary Mega Sale (which had $10 off each sport on the shop, with that low cost paid for by Epic) – fairly flat, huh? But in the event you take a look at Al (Morwull)’s doc on EGS exclusives, sorted by date, you may see loads of new unique video games launching in that interval.

That’s the issue the Epic Retailer had again then. We don’t have full inner information to substantiate, however we suspect they nonetheless have this drawback now: within the absence of group or vital mass, gamers will go to platforms solely to purchase exclusives or get free video games.

Some supporting proof: the doc says that solely 7% of the 18.5 million Epic Video games Retailer customers acquired as much as October 2019 through free sport giveaways went on to purchase video games. And we do know that Epic has $330 million in unrecouped prices on sport advances – we suspect that’s larger than anticipated.

One space that Epic doesn’t have an unrecouped minimal assure, not less than, is Borderlands 3. The identical doc reveals the specifics of the Take-Two and Gearbox deal, and it’s eye-opening:

So the whole $146 million (!!) upfront deal included ‘minimal ensures’ for Borderlands 3 ($85 million), the Borderlands Good-looking Assortment ($11 million), and ‘Civilization’ ($20 million – is that this Civ VI or the following Civilization sport?) Plus there’s a non-recoupable $20 million and a $15 million co-marketing spend on Borderlands 3.

Anyhow, most Epic Video games Retailer minimal ensures are most likely within the ‘mid lots of of 1000’s, to excessive tens of millions’, USD-wise, so this one stands out. And… it completely paid off by way of drawing gamers to EGS in that point interval.

Simply two weeks after launch, life-to-date Borderlands 3 recoupable income hit $100 million, and 820,000 new Epic Video games Retailer customers have been created. Epic would possibly battle a bit to recoup every thing due to the non-recoupable cash and EGS’s 12% income share, however that’s not what they wished. Job executed – within the short-term.

There’s a lot different fascinating stuff within the full deck. However one factor I wished to spotlight particularly. We consider that EGS ‘minimal assure’ offers are winding down. The catalog is widening, and lots of extra publishers/devs have been let onto the Epic Video games Retailer to publish video games with no exclusivity, however no advance.

There have been two situations within the late 2019 EGS income mannequin – ‘aggressive pursuit’ and ‘winding down’. And we’re fairly positive that Epic’s plans are skewing nearer to the latter than the previous:

We see the announcement of Epic co-publishing with Playdead, Treatment, and genDESIGN again in March 2020 as a touch in the direction of this alteration in ways. And we’re positive that EGS titles are usually not being actively signed on the charge of the ‘aggressive pursuit’ choice.

This doesn’t imply that EGS has given up – or the shop isn’t useful in combination. The trailblazing on ‘truthful minimize’ for platforms is admirable. However within the far future, we expect EGS will perform extra for Epic as a PC ‘hub’ for its owned merchandise (Fortnite, Rocket League, Fall Guys), plus these co-published exclusives.

After all, Epic Video games Retailer will nonetheless exist as a modest different to Steam for third-party PC sport builders and publishers. However we’d put its market share for concurrently launched PC video games at 5% or much less proper now – above every other PC retailer (together with the Home windows retailer, GOG and Itch), but nonetheless struggling towards Steam. And absent exclusives – that are loss leaders anyhow – it’s not likely even fairly making its ‘winding down’ mannequin case.

#3: EGS free video games – finest negotiated how?

Sure, we featured this ‘Epic Video games Retailer free sport $ in first 9 months’ chart – additionally from the EGS retailer doc – briefly within the final e-newsletter. And I really feel a bit unhealthy about it for a few causes.

Firstly, that the builders had this info uncovered with out permission. That is perhaps academic, however it may additionally be privacy-invading. Sorry – all I can say is that Epic didn’t push for this to be redacted, for no matter purpose. And secondly, that my Tweet about it went so viral (over 5,000 likes) that it received a bit decontextualized.

So let’s relax and work out what we will be taught from it. Firstly, simply so we’re all on the identical web page – these are video games that have been supplied at no cost on Epic Video games Retailer for one week in 2019, as much as the top of September.

‘Buyout worth’ is the lump sum the dev was paid for an infinite quantity of sport downloads. ‘Entitlements’ is the variety of occasions the sport was added to the EGS library by a participant. And the opposite gadgets are pretty self-explanatory – ‘UA value’ is variety of new Epic accounts divided by value of buyout, etcetera.

So, right here’s the teachings that I’d take from this:

  • The ever-opinionated Rami Ismail has a quite right one, right here: “INDIES – DEMAND MORE MONEY FROM CORPORATIONS FOR YOUR SHIT.” It’s possibly subtler than that, however there’s basically no distinction in free sport obtain numbers between – for instance, not selecting on anybody, Fez ($75,000 fee) and Celeste ($750,000 fee).

  • So why didn’t everybody get $750,000 for his or her title to be free on EGS? Effectively, Epic seemingly didn’t have the funds to do this. (The common value throughout all video games is about $290,000.) And Fez is a a lot older sport, so that you would possibly anticipate a distinct upfront value at the moment in its lifecycle. And we all know nothing about how these events have been approached. Did Fez and Celeste each begin with the identical supply on the desk?

  • However might EGS free video games that accepted $100,000 have gotten $200,000, on this case? I’m going to say sure. And one thing I hear repeatedly – whether or not it’s for Apple Arcade, Google Stadia, Xbox Recreation Go or different providers – is that smaller devs didn’t have in mind that there is perhaps the next vary of attainable ‘lump sum’ funds from the platform holder. (So sure, ask for extra money!)

And that is the place negotiations and valuations get bizarre. As a result of a number of the time, issues like ‘being paid to your sport to be free on Epic Video games Retailer’ are simply discovered cash for many devs. And the way do you worth ‘discovered cash’?

This isn’t like Netflix the place you’re negotiating to make a TV present forward of time, and you understand how a lot the TV present prices, and also you want that amount of cash. That is only a half – typically an sudden one – of the general income image to your sport.

So what we’d recommend you do is overlook concerning the ‘free cash for me, so an arbitrary quantity is OK’ angle, and attempt to put your self within the eyes of the platform-holder. What do they need, and what are they ready to pay for it throughout a complete vary of corporations, massive and small?

If the platform holder can stroll away, then positive – being too aggressive is perhaps an issue. However you most likely have extra negotiating wiggle room than you assume. Use it.

[We’re GameDiscoverCo, a new agency based around one simple issue: how do players find, buy and enjoy your premium PC or console game? You can 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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