Metro Exodus cover art from Wikimedia
The other day, some ground-breaking gaming news came out that will probably have repercussions around the industry. Metro Exodus pulled its pre-order from Steam to become a time-locked Epic exclusive. This prompted, as far as I know, the first response from Valve about Epic entering the games market:
"Later today, sales of Metro Exodus will be discontinued on Steam due to a publisher decision to make the game exclusive to another PC store. The developer and publisher have assured us that all prior sales of the game on Steam will be fulfilled on Steam, and Steam owners will be able to access the game and any future updates or DLC through Steam. We think the decision to remove the game is unfair to Steam customers, especially after a long pre-sale period. We apologize to Steam customers that were expecting it to be available for sale through the February 15th release date, but we were only recently informed of the decision and given limited time to let everyone know."
To add insult to injury, Deep Silver is selling Metro Exodus for $50 on the Epic Games Store, where they had sold it for $60 on Steam. If you look at the math with the revenue share provided (88% vs. 70%), this gives them the same profit per copy.
The $50 Question
The really big thing here is the price-drop. I think we were bound to see someone jump over at some point in this fashion, so I'm not too surprised by a pre-launch shift.
However, the price drop raises some questions about the state of the industry. Obviously, if Deep Silver gets the same amount of money, it's more or less the same to them, but there are two big questions:
- Will this drive down the price of future games outside the Epic Games Store?
- Will this force Valve to change its policy?
Back in the day, PC gamers used to enjoy a slight price reduction versus console games, which has since dissipated. Now there's some indication that at least for digital sales that might be coming to an end. First-party digital publishers like Microsoft, Sony, Ubisoft, and EA had a real opportunity to capitalize on the chance to reap the benefits of this price drop, selling $50 games that the market has a taste for and trying to get out ahead of competitors who don't have the benefits of selling on their own platform, but they generally wanted the $60 price tag and the money that comes with it.
However, if Epic is going to convince third-party publishers to reduce the prices of their games, that could be really good for gamers and game companies. A $50 game that produces a greater profit is going to be phenomenally more likely to succeed. Right now Steam's having issues justifying a 30% take as a value-add; it does offer some services that are nice for developers, but many of them fall into the "luxury" category, are not always fully implemented, and can be done at a relatively low cost versus the 18% of money you get back by going to Epic.
The counterpoint to this is whether Valve will change its policy; a lot of the controversy was caused by Valve offering better revenue splits to established publishers (who, admittedly, often rely on their own services instead of Valve's; Ubisoft is a leading example here), but even then this seems to have backfired for Valve: Epic offers better splits than Valve gives its favored customers, and everyone else feels like they're in a second-class status.
Another thing to point out is that Epic includes a referral system for influencers. While I don't think it's set up right (they have a hefty barrier to entry, which I believe is just to prevent having to pay small word of mouth influencers), the fact that they're fronting 5% of a referral bonus to people is quite a big deal in terms of getting people to review games on the Epic Games Store and send people there instead of Steam.