As some of you may have heard, Phoenix Point (the upcoming XCOM-like from the original designer of X-COM) has switched to exclusive sale and distribution on Epic Games Store (EGS) for an entire year. This of course has many people incensed, as people who backed the project on Fig or through subsequent pre-orders did so on the premise that they would get Steam and/or GOG game keys when the game was released (as well as access to backer builds prior to). Well not anymore. The game will only be available through EGS for its first year – with Steam or GOG keys coming along after the one year exclusivity deal with EGS is up.

PhoenixPoint

Obviously, this is ruffling many feathers (see exhibit A). But for the moment, I want to dwell on some of the arguments that have been circling around regarding this turn of events and EGS’s potential place in the PC market relative to Steam.

Let’s step back for a moment. Steam is certainly the dominant player in the PC gaming market. And many have credited Steam for being the savior of the PC gaming market during a period when boxed PC games dwindled out of existence (a combination of consoles competing for shelf space, challenges with patching games, etc.) and were increasingly pitted directly against consoles with so many titles becoming cross-platform. Steam pioneered the digital distribution model and their gambit clearly paid-off. Yes, Steam is a mechanism for DRM in one form or another, but that’s come with enough value added that most people look past it. For those that don’t, there’s always GOG, a platform that sells many of the same games, but without DRM.

Anyway, Steam of course hasn’t gone without its share of criticisms and controversies during its tenure. People cite concern that Steam could be “too big to fail,” and if it went belly up a lot of gamers would be left without access to their libraries (given that most games aren’t distributed through steam in a DRM-free manner). There are also concerns that Steam might, overall, be a monopoly in the marketplace and thus are able to dictate terms and prices too strongly. Oft cited is the fact that Steam takes a 30% cut of all sales, leaving only 70% for the publishers and developers (this number is however comparable to console platforms, itunes, etc.).

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Many are using the above arguments, alongside EGS’s pledge to leave more sale revenue to developers selling on their platform, to advocate for EGS or other platforms that can give Steam direct competition. And as every proper capitalist knows, competition is good for the consumer. Right?

However, there are some flaws and lapses in the above rationale that are important to highlight.

First – Steam is far more than a mere storefront. In addition to being a point of sale, it is also a distribution platform for other storefronts (more on this below), a game launching platform (library, patching service, Steam controller API, Mac OS and linux support, family sharing, in-home streaming, etc.), a social media platform (friends, voice channels, game forums, groups), a developer platform (steamworks, early access), a modding platform (workshop), and a critic/review platform (curators).

All of the above are value-adds that go well beyond being simply a storefront. This is surely self-serving on Steam’s part – because the more dependent gamers and developers are on Steam’s entire ecosystem and suite of services, the more “locked-in” people become. I contend that any new service looking to sell and distribute games has to have some bigger value proposition in place to compete with everything Steam provides. For example, GOG broke into the market by modernizing old out-of-print titles to work on new computers and coupled this to a (mostly) DRM-free business model and a more carefully curated inventory.  

With respect to EGS, I simply don’t buy the argument that “they are new and growing – they need time to add features to their service.” They are a phenomenally profitable company (Fortnite, remember?) and could certainly spare the expense. Moreover, this logic is like defending a new car manufacturer selling their car without airbags or automatic windows and claiming “we are new, give us some slack.” No, sorry – if you want to compete in a mature market you better bring in a fully-featured competing product and not some half-baked jalopy.

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Second – the cries that Steam is the biggest storefront in town and that their policies are unfair isn’t quite accurate. The reason is that, unlike EGS’s “exclusivity” arrangements, Steam allows developers to sell their games (as a Steam key) on other 3rd party storefronts. Steam, while earning nothing (correct me if I’m wrong) from a sale on Humble Bundle (for example) nevertheless provide the distribution and platform for game copies they didn’t even sell. IMHO, this is pretty significant and remarkable – and certainly quite fair.

More to the point, of all of the various sales tactics that exist, “exclusivity” deals are, from the consumers vantage point, one of the more unpleasant. We often talk in lofty platitudes about the importance of an open market in tech ecosystems. Exclusivity deals fly in the face of that.

With regards to EGS, many have asserted that there are plenty of games on Steam that aren’t sold anywhere else. That may be true. But critically, Steam isn’t “preventing” developers from selling on other platforms in anyway. Between being able to crosslist a game on GOG or sell Steam keys on dozens of 3rd party sites, the Steam ecosystem is inherently more open than one that is banking on exclusivity deals in order to penetrate the market.  

Ironically of course, having a game exclusively sold from one vendor at a fixed price creates its own type of monopoly for that game. How does such an exclusivity deal in any way promote competition? It doesn’t. In fact the “point” of such a deal is to quash competition and be able to charge higher prices. For those justifying EGS’s methods as being what it takes to squash Steam’s monopoly, I’d ask you think harder about who you’re getting into bed with. Perhaps it is not surprising to see that EGS has also spoken out against “sale culture.” Profit motive anyone?

PPSvE3

Third – where do we go from here? Say EGS is successful via their exclusivity arrangements and they grow into a big storefront competitor for Steam. Are they going to also look to provide all of the other services that Steam provides to developers and gamers?  What about EA + Origins service or Ubisoft and uPlay? Or Blizzard and BattleNET? From an end user standpoint, how convenient is it for me if every major game is only distributed and playable through its respective storefront and launcher. Do I have to track and manage friends across half-a-dozen different platforms to see who is a playing what? No thanks. Dealing with Steam, GOG, BattleNet, and contacts on Discord is already enough.  

PPSvEt4
Who will win?

 

It’s hard to know what the future will bring. Maybe the exclusivity deals will prompt Steam to make a counter-offer to developers for a smaller cut of the revenue. I really don’t know. I do feel like a lot of people rally against Steam’s “monopoly” without really thinking through fiscal and practical aspects of what PC gaming would look like with the market fractured into scores of storefronts, launchers, and social hubs. We’ve made great strides in streamlining PC gaming as a platform – from both a development AND gamer experience standpoint – in order to compete with the console market. It would be a shame to burn that all down.

21 Comments »

  1. “they are new and growing – they need time to add features to their service.”

    So, when are they going to add security and proper account recovery? I suppose people should go to Steam forums for support on that too.

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  2. Well said. I have zero problem with selling the game on any store, as long as I get a steam key. I don’t even prefer drm free to steam keys, really, as I find steam so super extra convenient and chokefull of usefull features, that frankly it is value added to the end product. But if they went and said ok, game will come on steam a year later, until that it is DRM FREE through x number of stores or devs directly, it would still be a shady practice. Backers were promised certain things, and now there is no way this doesn’ t feel like a bait and switch.

    But they are not even saying that, they are forcing people to use EGS. No. Just no. Deal breaker. glad I didn’t back the game, will not be buying at all, and will never back a game ever again. There is just something wrong with the entire preorder / kickstart culture I find abhorrent. Too much power in seller’s hands, and if trusted people start pulling this garbage I want nothing to do with this funding model. In fact I’m so disgruntled by this whole business I’m not even sure if I want to even pirate this game any more.

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  3. I hadn’t heard this yet. Very disappointed. It is exceedingly rare that I preorder games. Total Warhammer was the most recent, as an example. I was going to preorder Phoenix Point, but now I will never buy it at all.

    I vote with my wallet.

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    • Eh, kneejerk reaction. I mean more power to you and all, but letting an emotion drive you to a statement like “I will never buy it” is probably not a great policy. If the situation changes in the future and the game is offered through Steam or GOG or whatever, buy it then. Their sales figures will show that it was not bought via Epic. That ought to be fine.

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      • I disagree. Being upset with a company but giving them your money anyway is exactly why crap like this continues to happen. They know it won’t matter. They can do whatever the hell they want, because you’re going to buy it anyway at a later date.

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  4. Voted with wallet. Refunded fig pledge. I’m not particularly annoyed at Mr. Gollop for going back on his original distribution statement, but I have no desire to support what is starting to smell like a real anti-consumer storefront.

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  5. BIG REPUTATION LOSS!!!

    As I think it probably helps them to make a better and more polished game, due to the upfront cash from epic. But the infamy they earned and the loss of a long term player base will just hurt them and possible sequels in the long run! They say, you only release a game once, if you screw that, you probably lost the future. Good by for my hopes of a worthy successor of the originals.

    Going back and play the total conversion of the original, X Piratez.

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  6. Yeah Xenonauts gets close to the Originals but still a long way to go. If you don’t mind nudity, then the XPiratez mod is a great option. It’s like a very brutal long, Long War Mod. Tons of new stuff and it feels for me like the original. TU are so much superior to the new XCOM and the atmosphere surpasses PP by far. Lots of quality of live improvements. I would just hope the Battlescape could zoom out too.

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  7. Wow… of all games I would not have expected Phoenix Point to go this route. They sort of have an agreement with their backers do they not? Even if its not legally binding, it will do so much damage to their brand to break that.

    For Nate to put in a refund request for this game… That is saying something.

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  8. I’m shocked. Don’t really have words for that. How on earth did Julian Gollop think this would be an even remotely good idea. They must have been in a huge financial trouble with finishing the game to even consider that. This was among my top 3 most anticipated games this year but now I’m certainly never going to get it.

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    • Certainly possible, but they should have told us. I bet you people would have gladly backed the game further. I would have done that easily based on my experience with backer alpha build 3. Instead we got this. Lame!

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      • That is a good point. They never gave any suggestion they needed more money. If they had I might well have backed it after all the praise you gave it on the podcast. This is a very unexpected and unwanted development, especially for a crowdfunded game. With other games I feel it is more their own decision what they do, even if I might not like it.

        Also read that piece where he said he was sorry, but it didn’t feel that way.
        https://www.pcgamesn.com/phoenix-point/phoenix-point-epic-games-backlash
        He also stated this: “He also suggests that he doesn’t expect the backlash to have a particularly drastic impact on the game’s sales, saying that “we don’t anticipate that more than five to six percent of our backers will actually request refunds in the long run.”
        That is pretty cold if you ask me. Might be financially working out for you, but clearly those fans that helped you to get the game started, with no guarantee of ever seeing said game, can now sod off.

        Crowdfunding games had already lost quite a bit of its luster for me. This is not helping developers that have to go that route. I can’t imagine Snapshot games doing another crowdfunded game…

        Liked by 1 person

  9. I just wonder what Fig thinks about this? Since the dev went back on his word, it will reflect negatively on that crowdfunding platform. Also, aren’t some Fig backers considered investors? If so, they have some specific rights to expect what was promised to be delivered.

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  10. Developers have a choice to use the services that Steam offers…if they want to use them, great…if not, EGS is an excellent alternative. If they don’t want to use these features, why should the developer hand over 30%? Nope, EGS allows developers to keep more money in their pocket. The developers have a choice…EGS is not forcing them to do exclusive deals…they are choosing to do it because they will get to keep more money. Its a great win for developers.

    What about the consumer? Well, for me… Double-clicking on the EGS icon is not a deal breaker. It’s not like I have to purchase an XBOX and a PS4. Its an icon on my same hardware.

    Steam is a bloated mess of features that I could care less about… Its been a long time coming that someone would offer an alternative where developers will be able to keep more of their cash as they are the ones that actually developed the game!

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