Ubisoft Disingenuously Says Steam’s 30% Fees Are “Unrealistic” In 2019
Ubisoft Ghost

Ubisoft has openly stated that the reason their games are no longer being published on Steam is because of Valve’s 30% fees. However, they still publish their games on the Xbox One, PS4, iOS, Green Man Gaming, the Humble Bundle Store and Android devices, despite the other platform holders also taking a 30% platform fee.

In an article published by New York Times, Ubisoft’s vice president for partnerships and revenue, Chris Early, explained that the model for platform distributors taking 30% cuts is a no-go in 2019, with the New York Times prefacing the comments with the following exposition…

“For years, Ubisoft released blockbuster titles like Assassin’s Creed and Splinter Cell on Steam. But it decided not to sell the sequel to its hit game Tom Clancy’s The Division on the platform because Valve would not modify its revenue-sharing model, said Chris Early, Ubisoft’s vice president for partnerships and revenue. The game is for sale on the Epic Games Store and Uplay, Ubisoft’s store.

 

“The move was part of a broader business discussion at Ubisoft about releasing titles on Steam, Mr. Early said. “It’s unrealistic, the current business model that they have,” he said. “It doesn’t reflect where the world is today in terms of game distribution.”

Except it does.

While Epic Games only takes a 12% cut of the distribution fees, with a 5% waiver for games made with their Unreal Engine, the reality is that 30% is the industry standard… nearly everywhere.

If Ubisoft has a problem with Valve’s 30% revenue cut for distributing games on Steam, then does that mean they’re going to stop distributing games on Xbox and PlayStation platforms, too?

That’s right, home console makers also take distribution fees, usually anywhere between 20% and 30%, just like Valve. Back in 2013 Windows Central spilled the beans after a series of articles came out about Microsoft’s five-figure patching fees on top of their 30% revenue cut, writing…

“Consider that many XBLA games sell less than 20,000 copies and a sales figure of 100,000 copies is considered a smash hit. Whether a game sells for $10 or $15, Microsoft automatically takes a slice of 30% or so off the top (as does any digital marketplace), and then the publisher which Microsoft requires for games to even get Xbox status takes another chunk of the change. So a $10 game that sells 20K copies only brings in about $100,000 for the developer. Spending 40 percent of your profits to fix a few bugs just doesn’t make sense in that scenario, and so many games go without updates.”

Has Microsoft waived their 30% fees? Not as far as any developer has reported.

How about Sony or Nintendo? Well, they’ve never been public about the distribution fees, but they’ve reported around the same. We know that both Google and Apple also still take 30% off the top of whatever an app brings in, as revealed when Epic Games decided to pull Fortnite from the Google Play store to avoid Google’s 30% distribution fees.

As reported by WCCF Tech back in August of 2018, Tim Sweeney had publicly stated that Fortnite wouldn’t be on the Google Play app store due to Google’s 30% revenue cut, saying…

“The 30 percent store tax is a high cost in a world where game developers’ 70 percent must cover all the cost of developing, operating, and supporting their games…There’s a rationale for this on console where there’s enormous investment in hardware, often sold below cost, and marketing campaigns in broad partnership with publishers…30 percent is disproportionate to the cost of the services these stores perform, such as payment processing, download bandwidth, and customer service.”

So by this logic, if 30% is unfeasible for Ubisoft in 2019, I suppose they’re going to remove all of their games from Google Play… right?

They currently have a number of premium games in their Google Play catalog, ranging from $0.99 up to $4.99, each of which hand over 30% of the intake to Google.

And what about their apps on the iTunes App Store? Apple also takes a 30% cut, as reported by The Inquirer, who noted that other services had been pushing back against Apple’s app tax, writing…

“Currently, Apple takes 30 per cent of each subscription payment made through iTunes – although the firm in 2016 adjusted its revenue cut to 15 per cent after the first year in response to disgruntled developers. “

So I suppose Ubisoft is going to stop publishing apps on the iTunes App Store… right?

They still have a growing catalog of games on the iTunes App Store at the moment, so I find it interesting that they’re picking on Valve for the 30% cut while still making and publishing games on rival services with equivalent distribution cuts.

What’s more is that Valve even modified their distribution tax based on the sales of a game. So the better your game sells the lower the fees. They made this decision in response to Epic Games’ 12% distribution fees.

Back in December of 2012, Valve announced that developers who release a game that makes $10 million in revenue will have their distribution fees reduced to 25%, while those who who manage $50 million in sales will have it brought down to 20%.

Basically, the better your game is and the more it sells the smaller the fees.

This encourages developers to make better games, because the more the game sells the lower the distribution fees. This is covered in an actual logically made and proper video by Chris Titus Tech, who goes over the actual facts instead of the sensationalism being pushed by games media.

This basically means that 1) Ubisoft doesn’t believe they make games that will sell enough to drop the fees down to 20% or 2) they’re just being disingenuous about the distribution fees in order to publicly shame Valve.

At least some developers were honest to the New York Times, noting that it wasn’t even about the fees but the money that Epic paid them, with the outlet writing…

“Other developers declined to discuss contractual details of their exclusive deals with Epic, citing nondisclosure agreements, but they said money was a factor in their decision-making.”

With Epic’s guaranteed sales for some titles and an upfront payment to have the game exclusively featured on the Epic Games Store, it’s blatantly obvious why certain studios are choosing Epic over Valve when it comes to storefront preference. However, burning the goodwill of gamers, spreading misinformation, and badmouthing a storefront for short-term gains could have long-term consequences as far as reliability and consumer trust is concerned.

(Thanks for the news tip s_fnx)

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Billy has been rustling Jimmies for years covering video games, technology and digital trends within the electronics entertainment space. The GJP cried and their tears became his milkshake. Need to get in touch? Try the Contact Page.

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