If it were only that simple. The tactic is to buy exclusivity and undercut other suppliers until they no longer can sustain and are snuffed out. Then Epic can jack up rates without consequence because there is no competition.
-
-
Replying to @Mortiel @SonOfATech and
Epic, I'll note, could buy Valve three times over without even touching Tencent funding. They can weather taking a loss on that 12% cut. If you think it sounds conspiratorial, look to Amazon. They are doing that constantly. Walmart also did it as well. It's a century old tactic
1 reply 0 retweets 1 like -
Replying to @Mortiel @SonOfATech and
The notion that 30% rev share is "oppressive" is propaganda perpetuated by Tim Sweeney. Other people with knowledge on this, such as a fellow streamer
@drukstarship, and I have discussed this false narrative at length. Undercutting that is already allegedly affecting GOG.2 replies 0 retweets 1 like -
Replying to @Mortiel @SonOfATech and
Most developers make less than a 30% profit margin on their revenue, so in most cases Valve makes more profit from selling a game than the the developers themselves. I don’t think I’ve remember calling this “oppressive”, but it’s certainly a bad deal for developers.
2 replies 0 retweets 6 likes -
Replying to @TimSweeneyEpic @SonOfATech and
You are conflating profit with revenue, and you know it. Valve also makes less than 30% profit. Come on, mate.
1 reply 0 retweets 4 likes -
Replying to @Mortiel @SonOfATech and
Yes, we estimate average costs of sales at 5-7% in developed markets, based on our experience processing Fortnite payments. 30%-7% = 22% for Valve. 30% profit margin on 70% revenue share = 21% for the example developer.
3 replies 0 retweets 4 likes -
Replying to @TimSweeneyEpic @SonOfATech and
And how much does CDN storage and infrastructure cost to maintain? Before giving a BS answer, remember you are talking to people that actually do this for a living.
2 replies 0 retweets 2 likes -
Replying to @Mortiel @SonOfATech and
Our costs in the developed world are typically 2.5% to 3.5% for transaction processing, 1% to 1.5% for customer service, 1% for CDN bandwidth. This is based on our experience operating Fortnite digital sales on PC, Mac, and Android.
2 replies 0 retweets 3 likes -
Replying to @TimSweeneyEpic @SonOfATech and
And now magnify that by the library on Steam. Fortnite is just one game. You are starting to get there. I have faith in you. Also, let's talk about resource costs. What is your employee overhead?
1 reply 0 retweets 2 likes -
Replying to @Mortiel @TimSweeneyEpic and
Cards on the table: Employees alone, OpEx budgeting is often around 30% of revenue alone. Other OpEx items can take upwards of 15%. CapEx, including R&D, can be up to 40% depending on strategy. You want to talk shop, let's stop with the BS here.
2 replies 0 retweets 2 likes
These are variable costs of sales that scale in proportion to revenue. Fixed costs like development and office space don’t add marginal cost to each sale.
-
-
Replying to @TimSweeneyEpic @SonOfATech and
CapEx is annualised in order to roll in a budget. They most certainly can be translated to marginal costs to each sale. They most certainly should be to properly calculate profits. But you know this already.
1 reply 0 retweets 0 likes -
Replying to @Mortiel @TimSweeneyEpic and
@Mortiel, I don’t think any of us have operated a business in this industry. To try to argue on cost in the industry w/out exp seems ill advised. I’m open to discussion on how infrastructure, data & development play in all this, but I think this has lost sight of that already.1 reply 0 retweets 2 likes - 2 more replies
New conversation -
Loading seems to be taking a while.
Twitter may be over capacity or experiencing a momentary hiccup. Try again or visit Twitter Status for more information.