Earlier this week, I took at look at the current state of play with regards to The PC Store Wars. We’ve gone from a situation where, despite repeatedly shooting themselves in the foot, Valve have had little, to no, real competition in the online PC store space. Then, all of a sudden, Epic turned up with their own store. What happens now?
The Fortnite Effect
Epic made no bones about it when they launched their new store front. Their ability to launch it with such a developer friendly revenue split was thanks to the runaway success of Fortnite: Battle Royale. In 2018, the free-to-play title that was spun away from the premium (for now) Save the World variant, made upwards of $2.4 billion for Epic.
That’s right, analysts have calculated that one simple free-to-play game has made Epic more in one year than the GDP of several countries. Fortnite has had a drastic effect on the landscape of popular culture, let alone the game industry. It has been so successful, that Epic don’t even advertise it on their store. They just know people will have it, if they want it.
The phenomenal success means that Epic have a war chest, which means they can readily afford to take a hit on their revenue splits compared to the industry standard, thus enabling them to score exclusives like The Division 2 and Metro: Exodus.
What if the bubble pops?
While the success of Fortnite so far can’t be denied, it isn’t the only free-to-play game making mega-bucks, let alone the only battle-royale title that is pulling in the money. DOTA2 is Valve’s own baby, while PUBG might be considered a has-been compared to Epic’s hit, but still pulls in over 800,000 users on an average weekday.
Looking at the Steam stats, there is one venerable oldie still standing tall. That, of course, is Counter-Strike: Global Offensive. Still going strong, this won’t trouble Fortnite in the revenue stakes, but shows that there is a healthy appetite among gamers for non-Fortnite games.
But might the bubble pop? EA and Respawn only released Apex Legends back on the 5th February, but has already knocked up over 25 million users. How many will stick around for the long haul, and turn into money makers for EA, we can only wait and see.
Those players though must be coming from somewhere. Yes, Fortnite has gang-buster player numbers, but something like Apex Legends would fit right in the wheelhouse of some of those users. It might not be a mass exodus, but if the Fortnite userbase crashes, or more importantly, those who are spending money on the game move on to something else, where will that leave Epic?
If there is a drastic drop in revenue from Fortnite, it won’t happen overnight. I fully expect Epic to have contingency plans already in hand, and will be playing the long-game, knowing they can build a loyal audience on their store moving forward.
Valve might have made some self-inflicted wounds when it comes to Steam, but they’ve been at this game for a long time. They survived EA departing their store, and have stood firm in the face of Fortnite. Epic launching their own store is unlikely to scare Valve too much, indeed, it might force them to sit up and pay attention to events taking place beyond the end of their nose.
They will likely make more blunders, but with a strong user base (just look at the numbers playing DOTA2, CS:GO and PUBG), why should anyone expect a rival store to suddenly destroy the rolling monster.
Indie game developers might be unhappy with their revenue splits, but are they more likely to make strong sales figures on a platform not solely dominated by one hit? On a platform where they won’t run the potential risks of seeing their game given away, with an unknown reward at the end?
I can see Valve improving their revenue splits, and Ts and Cs for those selling on the platform, but I don’t envisage an immediate emptying of the store from regular big hitters like Sports Interactive, SCS Software or Paradox Interactive.
Indeed, Valve haven’t even turned their back on game development like many people cry out. No, we are unlikely to ever see Half-Life rise from the grave, but DOTA2 and CS:GO are still very much supported, while something like Artefact is sure to undergo changes to push it to rival the Hearthstone’s of the world. That isn’t to forget In the Valley of the Gods.
Competition is ultimately good for business, and good for consumers. Maybe not in every instance, as the splits between Netflix, Amazon Prime and Disney’s upcoming venture are sure to show. But rival stores like Steam, Epic, Origin and Uplay should only drive companies to offer better user experiences, with better deals for the developers who sell through them.
Steam won’t be going anywhere soon, and Epic have the might of Fortnite to keep them going. The nature of some games becoming exclusives to Epic is frustrating for some, but what harm is there in buying Metro from another store (or even somewhere like Game or Amazon), while The Division will route its online component through Uplay.
People aren’t losing out at the moment with this shakeup to the PC landscape, and I think in the long-run, we will see benefits to these changes.