How Will the Epic Games Store Compete Against Steam?
It was a Thursday in mid-September when game developer Valve – still riding the high from their competitive online shooter Counter-Strike – launched a rather unique piece of software for PCs.
Steam (a play on the company’s name) was originally conceived as a way for Valve to provide patches to its online games, thus keeping the entire community in parity. However, Valve also spotted the potential of the platform quickly for releasing both third and first-party games.
By October 2005, the platform was ready to host its first third-party game – Rag Doll Kung Fu – and although that title has failed to have the same impact as the software on which it was hosted, it kickstarted a huge run of big-name publisher deals. Eidos Interactive, Capcom, and id Software all signed on within two years and, before we knew it, Steam had become an utterly essential part of the PC ecosystem.
Up until very recently, it was the only serious, widely supported PC gaming platform available. Today though? It’s facing a serious threat from an upstart platform – the Epic Games Store. But why now? Let’s take a look.
Steam’s great advantage in its infancy was the simple fact that if you wanted a Valve game, you needed Steam. From Half-Life 2, Valve required customers to download Steam. Later, they exclusively released first-party games on the platform. It meant that if you wanted those AAA experiences on PC, you needed Steam.
The Epic Games Store has followed this path to a tee with huge game exclusives like Fortnite designed to drag customers into the fold, and forthcoming titles like Borderlands 3 to keep them there. It’s the sort of trick that only a huge developer like Epic or Valve can pull off. Smaller platforms like GoG simply don’t have the industry sway to make it happen.
Needless to say, this sort of “walled-garden” exclusivity frustrates gamers, many of whom appreciate the freedom that PC gaming offers compared to, say, consoles where exclusivity is commonplace.
Of course, the flip side to this argument is that ultimately the more digital distribution platforms that achieve mainstream success, the more choice gamers will have in terms of price, competing titles, and accessibility. While the likes of GoG and Green Man Gaming may not have significant market share at present, the rise of Epic’s platform may be a step in the right direction. Eventually, we could see the PC gaming scene take cues from casino gaming, an industry in which consumers are faced with hundreds of competing offers and incentives as they attempt to find new online casinos. It may well be that with increased competition, the likes of Steam and Epic are forced to offer more attractive deals to consumers in an attempt to secure their custom.
Valve absolutely dominates the PC download space. 2017 alone is estimated to have earned Valve $4.3bn – before microtransactions and DLC – a truly frightening sum.
To truly take on Valve and Steam’s dominance, it takes a whole heap of cash. Luckily, Epic has just that. Fortnite is the biggest game on earth, earning Epic more than $2.4bn in 2018. That’s just one game, and it’s not the only product that Epic ships.
Unreal Engine, developed by Epic Games, is currently on its fourth iteration and has proven to be one of the most reliable, flexible, and powerful games engines on Earth. Powering everything from Tekken 7 to Yoshi’s Crafted World, it’s become an industry standard.
Most importantly, it’s free to use. All Epic asks is five percent of your revenue after the first $3,000 per product, per quarter. Needless to say, that’s something of a money-spinner for Epic too.
Together, the combination of a hit game in Fortnite and a boatload of cash to throw at developers to ensure exclusivity of their games has meant that Epic has found itself uniquely placed to take on Valve in the PC gaming space.
Whether their long-term success can match that of Valve’s is yet to be seen, but given the success of Unreal Engine 4 and Fortnite, well, we wouldn’t bet against them.