Epic Games’ Tim Sweeney Explains Epic Games Store 12% Cut
Epic Games founder and CEO Tim Sweeney took to Twitter to explain why the Epic Games Store takes just 12% of revenue from its clients.
“Why 12%? We chose this number to provide a super-competitive deal for partners while building an enduring and profitable store business for Epic,” wrote Sweeney. “From that 12%, we net around 5% after direct costs and that could grow to 6-7% with greater economies of scale.”
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Why 12%? We chose this number to provide a super-competitive deal for partners while building an enduring and profitable store business for Epic.
From that 12%, we net around 5% after direct costs and that could grow to 6-7% with greater economies of scale.
— Tim Sweeney (@TimSweeneyEpic) April 22, 2019
The Epic Games Store takes a 12 percent cut of revenue from those who opt to put their games on the platform. This leaves 88 percent for those who create the games. It’s in stark opposition to the 30/70 revenue-sharing split that has been seen for quite some time as an industry standard, as with platforms like Steam, the store’s biggest competitor.
“Why did Activision, EA, and UbiSoft break away and build their own stores from scratch? Because it’s way more profitable to sell their games that way than to give 30% to a store,” he continued. He went on to explain that 30% is an “enormous markup,” noting that when grocery stores sell things like Amazon or Steam cards, they mark them up around 10 to 15 percent, and when a credit card company processes said transactions, they take about 2.5 to 3.5%.
In a nutshell, Sweeney believes that the net costs gained from the lower percentage represents a smaller markup and in the end is fairer and still profitable. Sweeney has been tweeting in abundance lately about the Epic Games Store, noting recently that Epic is “open” to continuing to sign deals with developers and publishers even if they’ve made plans or announcements with Steam. It’s likely his latest series of tweets are related to these revelations as he continues to share insights into the way the Epic Games Store operates.
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