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1So this point is about comparing relative features, right? That currently Steam has features that Epic’s store does not? I think it’s a fair point and I’ll be happy to look at that point with you over a few following tweets. Please don’t respond until I say “done”. Okay? First - Please understand that although I may have thoughts and opinions about this topic, the authority here truly is in the hands of our publishing partner, 2k Games. So while I may have some influence, I cannot force anything (and this ship has sailed, so to speak). Currently Steam has a bunch of features that the Epic Games Store does not. That’s fact. We could probably rank the priority of those features from top to bottom and while we may disagree a little on the ranking, there is probably an optimal priority to go after features. Also, some features that Steam has may be features that are not part of Epic’s vision and some features Steam never contemplated may be part of Steam’s vision. The vision for how a store should interact with a customer and a developer and a publisher is all part of the equation. Epic has published a near term road map. This road map includes a look into things they are committing to. If I were a betting man, I would expect that there are more things that happen than what they are committing to. We also must acknowledge that Borderlands 3 does not exist today but rather it will exist in September. The store will be different when the game launches. It will become a boon to their store if they bring sufficient features to make the customer experience great for us. Epic will suffer (again) if, by the time Borderlands 3 launches, the customer experience is not good enough. This is a tremendous forcing function for Epic. This is also really good for Borderland 3 as Borderlands 3 will be the biggest, by far, new game to arrive on the Epic store since they launched and Epic can be sure to invest huge amounts of resources specifically for the features most important for Borderlands 3. The forcing function of that will, in turn, make all those features available on a faster time-line than otherwise possible and this is good for all games from both the customer perspective and the developer/publisher perspective. So now you can ask me “what if they don’t get all the features I care about done in time?” Or “but why not just support both stores - why do we care whether Epic has Borderlands 3 as a forcing function when we’re already happy with Steam?” (Or some other question...) Done :)
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3There is an important question I think is worth asking: What are these company’s values and given that, which of these companies is more likely to progress at the fastest rate on behalf of the customer and the developer/publisher? It is possible that the EGS does not successfully complete enough features for the store before Borderlands 3 launches to be “good enough”. That’s a risk. It’s one that our publishing partner, 2k, was willing to take. I’m not mad about that decision or the risk, but it’s real. So the question on that angle is really about long game versus short game... What’s best in the long run? I hope to die in office, creating entertainment for as long as people want me to. So I tend to think very long game. Some of us think very short game - I understand that. So the risk that not all the features are perfect by the time Borderlands 3 launches is a risk I am comfortable with IF I believe that in the long-run, Borderlands 3 and future games I make will be best served if the Epic Games Store a) exists, and b) is competitive. So, do I believe that? Absolutely... Why? Track record combined with company values and the situation at the companies. I can explain all of those. First, track record. Now, I have a bit of authority on this topic of track record between these companies. I worked with Valve for many years (20) both as a developer in the Half-Life franchise and as a developer and publisher on the Steam platform. I have also worked with Epic for about as long, too, as a licensee of their engine and, more recently, as a retail publisher of their game, Fortnite. I know a lot about these people and these businesses. From a track record point of view, my expectation is that Epic’s investment in technology will outpace Valve’s substantially. When we look back at Steam in five or ten years, it may look like a dying store and other, competitive stores, will be the place to be. The competitive store that happens to be the leader in 10 years may not be Epic’s store, but it probably won’t be Valve’s and Epic’s moves right now are opening the door and paving the way for a vibrant competitive economy. Competition in stores is going to be absolutely best for consumers and probably good for developers and publishers as well. The stores that tend to win are the stores that offer the best to their customers. It’s very difficult for customer interest to be king with one store. One may look at other stores, like Origin or U-Play. Those aren’t real competitors to Steam. A competitor to Steam needs to have an installed base and be sufficiently neutral in alignment so that all publishers and developers who support the store can trust a fair economy. That’s just not possible with direct stores that are controlled by publishing interests. It’s also not going to come from adjacent services that have other priorities (like Discord, for example). Epic has credibility here because they have been supplying engine technology to the industry for over 20 years and we have all come to be able to trust and rely upon Epic’s fair play and good will. With the engine, Epic’s technology has gotten better and better at a faster rate over 20 years than any other game engine middleware on the planet. They have tremendous credibility with how they reinvest in their technology to the benefit of customers and developers. Meanwhile, as the quality of Epic’s technology improved, so did its success in business. What did Epic do? They used their increased success to lead they way in business terms. They reduce licensing rates for developers and created new ways to become a licensee. They increased accessibility to the engine so that folks like you can download and learn how to use Unreal Engine to become a game developer yourself - for free. And, when you want to commercially release something, there is a very competitive and fair price for that. Meanwhile, Valve has taken an absurd cut of the revenue - which would be fine except they have not reinvested it. This is where looking at the values of the company are important. Also, the way the company is organized and managed is really important to this calculus as well. Valve is a private company and, to the best that we can see, a huge amount of the value that Valve has generated has been used to enrich the handful of people who own and manage the company. There’s nothing wrong with that, BTW! My business is private, too! Epic’s business, until recently, was private and closely held. It’s still private, but not as closely held as before. This is important to consider
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5Every time Valve makes a dollar, they have to make a decision on whether to put in their own pockets or to reinvest it into technology (or whatever). Valve has made significant investments into technology, and should be applauded for the resultant innovations. But they have also taken a significant amount of value off the table and, when they’ve reinvested, they’ve tended to put it to a lot of other activities besides the store that is generating all of the revenue. They’ve been able to do this because they haven’t had to worry about it. There has been no viable competitor to Steam. They have had no external force sufficient to challenge their revenue share and no external force sufficient to motivate a sufficient reinvestment of revenue. Now there is an external force that is real. This external force, the Epic store, is a really significant threat to Steam. Steam must adapt or it will perish. Almost immediately, we saw Steam crumble it’s previously unwavering stance on revenue share. Holy shit! That’s a miracle. I think the folks at Valve are really smart and really great and they are also, probably, starting to redirect investment into their store. If Valve is smart, and they are, they should preemptively maneuver as many resources as possible towards improving the store and preparing for Epic’s inevitable challenge to Steam from a features point of view. The faster Valve can maneuver, the longer it can stay ahead of Epic on features. But, if I were to bet on this (and remember I’ve got a pretty good seat with a great view of this competition), Epic will inevitably surpass Valve on features and quality of service. Epic is differently setup from Valve right now. Epic’s shareholders are very motivated not to take chips off the table, so to speak, but to reinvest those shares into the company. They have an incredible valuation right now, but they are motivated to increase it. And they have the resources to really make some big plays towards that. All of those plays are going to be fed by a business that is not taking cash out of their system and putting it into individual’s pockets, but towards putting all of their cash back into theirs system. They recently raised some money. Why did they do that? They have been making more money than they ever have made before? They did that so the owners could sell some of their equity and put that cash into their pockets (which is totally cool - that’s what should happen). But what it means is that this business is not enriching it’s owners by siphoning from it’s profits, but rather it is enriching it’s owners by increasing its value. That is a HUGE and significant difference between Valve and Epic. Epic is motivated to reinvest 100% of its profits into activities (like the store) that will make Epic more valuable in the future. Valve is organized such that it is motivated to make decisions about how much of its profit it should distribute to its owners and stakeholders and how much to reinvest. MUCH different. If we only had that understanding, we would expect Epic to be able to surpass Valve, ultimately. But we have a lot more understanding than that. We have track record and we have what those company’s activities have been over the last decade. Epic has spent the last decade building an engine (no pun intended) that allows them to grow and deploy technology at an ever increasing pace. That they have decided to invest SIGNIFICANT amounts of the money they have made from Fortnite into the creation of a store to create a real competitive landscape is, frankly, a GIFT to customers and developers and publishers. ALL OF US WILL BENEFIT from this competition.