Monday, September 23rd 2019
Exclusivity Costs: EPIC Games Store's Control Cost $10.5 million to Become PC Exclusive
Control is one of the better single player releases of this year already, and has been enough of a success for Remedy and 505 Games to launch a content roadmap stretching all the way to 2020. The game is being served on PC exclusively through the EPIC Games Store, which, besides offering developers higher revenues than Steam, has also launched an all-out campaign to secure high-profile exclusives such as Control and Metro: Exodus (even if some of them are timed exclusives).
Now, an Italian earnings report from 505 games highlights that the developers received a lump, $10.5 million upfront from EPIC; according to the report, "Revenue comes from the computer version of Control (...) The game was released on August 27 but the structure of the marketplace who requested the PC exclusivity has made possible to gain the revenue starting from this quarter." It appears EPIC is offering a safety net for developers in exchange for the exclusivity deals, paying upfront the amount of revenue developers expect to receive from the games' sales throughout the PC platform. In this case, the $10.5 million correspond to a total of 200,000 individual sales of Control. Until that number is achieved, EPIC keeps the full revenue from every sale. Any units sold starting from 200,000, and the revenue is split between the developer and EPIC. It's a win-win, really: EPIC gets more and more traction and publicity on its store, and developers guarantee they get the minimum amount they'd expect to earn by selling the game across the full spectrum of PC marketplaces.
Source:
Ars Technica
Now, an Italian earnings report from 505 games highlights that the developers received a lump, $10.5 million upfront from EPIC; according to the report, "Revenue comes from the computer version of Control (...) The game was released on August 27 but the structure of the marketplace who requested the PC exclusivity has made possible to gain the revenue starting from this quarter." It appears EPIC is offering a safety net for developers in exchange for the exclusivity deals, paying upfront the amount of revenue developers expect to receive from the games' sales throughout the PC platform. In this case, the $10.5 million correspond to a total of 200,000 individual sales of Control. Until that number is achieved, EPIC keeps the full revenue from every sale. Any units sold starting from 200,000, and the revenue is split between the developer and EPIC. It's a win-win, really: EPIC gets more and more traction and publicity on its store, and developers guarantee they get the minimum amount they'd expect to earn by selling the game across the full spectrum of PC marketplaces.
129 Comments on Exclusivity Costs: EPIC Games Store's Control Cost $10.5 million to Become PC Exclusive
"Overall, Borderlands 3 is a highly entertaining shooter that's worth the cost if you liked Borderlands 2 and are willing to overlook that it's an Epic Store exclusive."
www.techpowerup.com/review/borderlands-3-benchmark-test-performance-analysis/5.html
I haven't played the game yet but I will probably enjoy it. I'm expecting the game to be a typical Borderlands game and I don't take the story seriously in that type of game.
There's no "extra" involved with exclusivity contracts as I explained in this thread. The only thing "extra" is that the publisher gets 18% more per copy sold than they do on GOG/Steam. I made a mistake on that thread (17% share instead of 12%) so I'll redo the math and tell you exactly how much "extra" they got versus making those sales on Steam/GOG...
88/100=9,490,000/x
88x=9,490,000*100
88x=949,000,000
x=949,000,000/88
x=10,784,090.91
Digital Bros/505 Game received approximately 10,784,090.91 euros from EGS for signing the exclusivity contract.
Because of those gross sales happening at EGS with 12% stake, they received 9,490,000 euros for those sales. If those sales were at GOG/Steam, they would have received 7,438,853.64 euros. By making those sales on EGS instead of GOG/Steam, they got 1,941,136.36 euros "extra." As you can clearly see, it's revenue sharing that makes a huge difference, not the exclusivity contract.
Control has for sure sold over 179,765 copies.
[/QUOTE]
Based on some quotes in this very thread I think there are a ton of people that will wait for the game to come to Steam.
505 Games/Digital Bros signed an exclusivity contract and it paid off. The rest is theory and conjecture.
arstechnica.com/gaming/2019/08/review-control-is-remedys-best-game-yet-and-a-ray-tracing-masterpiece/
Surely sales will improve with such glowing reviews.
www.techpowerup.com/news-tags/Control
The 2017 E3 announcement for Control got no coverage. What did get coverage? How did the press mostly find out about it? Remedy signing an EGS exclusivity contract in March of 2019. TPU is proof of this--other sites are similar. It wasn't on the radar for most people until EGS controversy put it there.
Websites like TPU and Arstechnica decided to review it because of RTX support. As demonstrated by your link, RTX is keeping Control in the tech press because it's now one of their benchmarking titles.
Edit: Arstechnica is the same way:
arstechnica.com/search/?ie=UTF-8&q=Control
Went through 10 pages of results going back to October 25, 2018, and only got four hits, all after the exclusivity contract was announced:
arstechnica.com/gaming/2019/09/epic-seems-to-have-paid-10-5-million-for-controls-pc-exclusivity/
arstechnica.com/staff/2019/08/dealmaster-1tb-ssds-control-ps4-pros-and-more-in-todays-top-tech-deals/
arstechnica.com/gaming/2019/08/review-control-is-remedys-best-game-yet-and-a-ray-tracing-masterpiece/
arstechnica.com/gaming/2019/06/control-pre-e3-hands-on-the-modern-day-x-men-video-game-weve-always-wanted/
www.pcgamer.com/every-game-at-e3-2018-and-its-pc-outlook/
youtu.be/8ZrV2n9oHb4
Almost everyone would have heard about this game if they frequent game sites.
Meh, you're trying to dismiss the importance of EGS in generating sales for Control. I've provided plenty of evidence EGS is the reason why Control did well. The fact 505 Games signed an exclusivity deal with EGS demonstrates they weren't confident it would do well to pay off their 7.75 million euro investment in Remedy to finish the game. By signing the deal, 505 Games was guaranteed to make a profit so they could go ahead and invest in another game before Control even launched.
I'm not even sure why this discussion is still continuing.
It's just a drop in the bucket for Epic. Fortnite is still a cash cow for them. They had revenue of 2.4 billion dollars in 2018. Sweeney said he can't keep up doing exclusives on EGS but with that kind of success he can probably keep it up for years. I don't know how this is affecting Steam's bottom line because they are a privately held business and they aren't required to make their finances public.
It didn't matter who offered the money, they would have taken the safety net.
The oddball is Borderlands 3. It's a known quantity and has sold exceptionally well in the past so why did Gearbox pursue exclusivity for that title? The most probable reason is Gearbox couldn't afford to finish the game without taking out a loan or finding some investors. A prepayment from EGS where they don't have to sell a share of the game is much more attractive and less risky. Yes, they still have the risk of not being able to cast a wide net but Gearbox is confident they can get that back through post-release DLCs and a re-release after exclusivity with much of the content baked into the game. The value added will keep the game attractive to buyers outside of EGS.I think every exclusivity contract EGS signed has been win-win. Sweeney is going to keep doing it because it's profitable for everyone. There's a lot more demand for it than he anticipated.
The fact Valve hasn't done anything this year suggests Valve doesn't care.
Also every year more and more people are buying games either because they just bought a PC or a console or they are old enough now for their parents to allow them to play a game like Control. Some of these people will no doubt by Control.We don't know how much Valve is losing on sales. Maybe Newell just wants to wait until the exclusives start hitting Steam to see how much money they are losing and also I bet Newell knows that Epic can't keep this up forever and so he doesn't view this as a long term problem for Steam.