Koch Media — the parent company of Milestone, Warhorse Studios and Deep Silver, and the subsidiary of THQ Nordic — found themselves in hot water with fans when they signed a timed exclusivity deal with Epic Games for the release of Metro: Exodus. In a recent interview the CEO of Koch Media mentioned that the Epic Games Store was good for the marketplace and that he’s not ruling out the possibility of making more of their upcoming titles Epic Games Store exclusives.
The interview took place over at GamesIndustry.biz with Koch Media CEO Klemens Kundratitz, who explained….
“Overall, I’m still of the opinion like I was at the beginning that, as an industry and as a publisher, we should welcome Epic and their business model. We have a strong relationship with Epic and we continue to have a strong relationship with Steam as well. It’s just a shame that we couldn’t announce this collaboration earlier. That was not perfect.”
“Not perfect” is an understatement.
They basically used Steam to broadcast, publicize, and promote the release of Metro: Exodus to millions of people and then they turned around and sold the game exclusively on the Epic Games Store for PC.
It’s safe to say that many fans were peeved. The response to their anger, though, was censorship and bans.
There were reports that Metro: Exodus performed well, but it was never clarified what percentage of those sales were organic PC sales and which ones were the “guaranteed sales” provided by Epic Games.
Either way, gamers weren’t keen on the switcheroo, leading to a lot of resentment toward both the publisher and Epic Games.
Kundratitz was willing to suffer through the backlash because he feels Epic’s business model is worth supporting, telling GamesIndustry.biz….
“As a company, we have to do the things we believe in,” he said. “We make mistakes as well but this wasn’t a mistake. We need to embrace a digital partner that offers a much more compelling rev share model than anybody else, and I think they act as a role model for us and for other digital partners as well — a 70/30 split is quite frankly anachronistic.”
Correction: Every major distributor takes 30%.
As pointed out in the piece about Ubisoft, if they’re complaining about Steam’s distribution cut and pulling their games from Valve’s store then they may as well pull their games from the Xbox, PlayStation, Nintendo, iOS, and Android platforms, too, since they also take 30% off the top of revenues.
Basically a lot of publishers and PR talking heads are using misinformation and industry smear tactics against Valve to prop up Epic Games. Unfortunately, since we don’t have actual journalists in the games media, only activists and propagandists, this results in a lot of people regurgitating the falsehoods that Valve’s 70/30 cut for Steam is somehow “unrealistic” or “unfeasible”, even though it’s how every major distributor operates.
That’s not to mention that Valve’s 70/30 cut isn’t even static; it lowers for developers the more they sell, with an 80/20 split for games that move $50 million worth of product. Valve made the change in response to Epic’s lowered revenue cut back in late 2018.
You could technically bypass most distributors and retail outlets, but would you reach as many people? Typically, the simple answer is an emphatic “No!”. The 30% covers distribution fees and market reach, the latter of which you won’t be able to achieve selling from an isolated, self-run portal.
Smart developers, like Unfold Games, have avoided Epic’s exclusivity trap, while publishers like Bandai Namco prefer keeping their games accessible on as many platforms as possible, avoiding the Epic Games Store exclusivity deals, as reported by Niche Gamer.
Regardless of what more pro-consumer studios are doing, Kundratitz is still of the belief that if the right deal rolls around they would still consider going with a timed exclusive launch on the Epic Games Store, telling GamesIndustry.biz…
“We have many games on Steam, including many new releases like Iron Harvest. But I’m not ruling out to do an exclusive with Epic again.”
So there you have it, folks.
Don’t be shocked if more of Koch’s games appear as timed exclusives on the Epic Games Store in the near future.
(Thanks for the news tip s_fnx)