Somewhat fascinating that this video is being view as anti-Steam, when it literally says "PlayStation only just added user reviews, Nintendo didn't have a shopping cart, while, Steam offers forums, mod support, cloud saves, achievements, streaming, the works. All for the same fee." This is clearly showing that Steam is offering a significantly higher amount of value for the percentage, and yet PlayStation and Nintendo are still able to charge the same amount.

Blockbuster weren't some brick-and-mortar dinosaur failing to see the potential of streaming. In fact, they were one of the first to try, years before anyone else. Their streaming platform failed miserably, partly because broadband internet adoption wasn't quite there yet, partly because tech infrastructure was supposed to be done by literally Enron, but mostly because studios REALLY didn't want to hand over streaming rights to the same guys who already cornered the video stores. Owning a tollbooth on the only road to town works right up until the moment there are rumors someone is planning to build another road.

And then you realize, the price will never go lower. AAA studios will always ask for at least $80, doesn't matter if you download the game from a store, you buy a physical copy from a retailer or Amazon, or buy it directly from the developer. Even if you cut out every middle man, and the every single penny goes into the developers pockets, they will not lower the price. Because the AAA industry is also greedy.

Let's be fair: even if all stores will reduce fees to 1% NO ONE AAA publishers will stop abusing game monetization: they still would make 70/80$ prices, microtransactions, early access for pre-order and etc. The only companies who deserves reduced fees - some AA publishers and indie devs. I would rather see the progressive tax like fees (lower profit = lower fees), I am sad that Steam has the opposite.

Much like Hollywood writers, why in the WORLD do people still hire 'business majors'?

Also, AA is alive and well in Japan. Bandai Namco(outside of Souls), Xseed, Idea Factory etc... put out $60 and sometimes $70 games, but they remain successful despite having to also play the platform fees even though most of what they put out doesn't or barely hits a million copies sold. It seems to me the budgets are the bigger problem, at least on PC/console. Mobile is probably a different story.

The gaming industry is oversaturated for indie games, and the productions costs are getting too high to be sustainable for AAA titles. Lowering the cut of storefronts will not solve these problems.

just a heads up: the captions on this video are a mess, especially during the sections with dr. toto where most dont even show up. i really appreciate the fact that you include captions to begin with btw!! so i hope these one can be fixed to keep journalism like this accessible to everyone 😊

As an indie dev myself, my little team and I live in fear of the 30 percent cut, and it's a large part of the reason our game probably won't ever hit consoles. We just don't have the funds to pay their fees and put our game out on Switch or PlayStation. Even Steam was a tough price to pay when all of us were financially struggling, and our game is so niche in genre that it's highly unlikely we'll see a breakout hit. We knew that going in, but when you put your heart and soul into something like this for multiple years, the realization that you likely won't see a lot of revenue for that work can be very disheartening. Fantastic video! I'm curious to see how the landscape changes moving forward.

This video used to be titled "The $60 Billion Gaming Scam Nobody Talks About"

Now it is "Why Even Hit Games Can't Save Studios Anymore"

MMORPGs were utilizing predatory monetization strategies aimed at addicts before it was cool

This video places too much weight on a single economic factor (store tax), while ignoring all others that are of the greedy corporations' own making. Implying that HiFi Rush's studio "had to be shutdown" because "the math didn't work" while pointing at the store tax as the sole reason is completely misguided and simplistic on what is actually a much more complex topic, and mainly related to how capitalism pushes these corporations to act they way they do to entice investors, push profits at any cost, and cut all corners.

I also feel like you are conflating some sucessful studios (like JAPAN Studios from Playstation) with studios that fell into disgrace with bad releases like Saint's Row and Redfall's developers. Not saying they deserved it, but it's not right to imply they were in the same conditions both in prestige and in financial sucess.

This, but tech talent agencies. They can't even guarantee continued assignment if one client contract ends

wait wait wait, hold on, youre telling me that its 'moriarty' and not 'mr exxerty'?

You always had to pay a licensing fee, or a mark up on the cartridge production, to release games on a console. The manufacturers made that standardised technology, marketed the console, and built the market where you are able to sell a console game.

Consoles were sold at a loss, with the licensing fees over time covering that cost to the console manufacturer, and that fee and production mark up worked out to about 30%, no different from now.

The only one that is technically a con is Steam, they did not invent and construct PCs, they do not subsidise the cost of PC hardware to the end user, They don't make development SDKs for PCs the same way console manufacturers do that for their consoles, they don't help cover marketing costs, they don't do shit except put the download on their site, and PC fanboys who love Gabe boycott every where else because Half Life 3 memes exist.

You never had to pay a licensing fee to make PC games, the Nintendo/SONY/Xbox stores are just a continuation of what always happened and makes consoles a viable thing to exist, Steam just basically act like a gate keeper to fan boys and force everyone else to pay Gabe or die as a company.

I think Tango Gameworks really doomed themselves with "Tokyo Ghostwire". There's no solid numbers, but it really seems like a high budget game that landed with a wet thud when it came out.

28:00 a "geogra-fee"

This is like eating increasingly bigger ice cream sundaes everyday and thinking the whipped cream and cherry on top is why you're getting fat.

i think the failure of the discord game store was pretty badly misrepresented. its more than just "players being selfish and choosing convenience over supporting devs". i checked it out when it was active, and there was nothing i wanted to play, so i didn't buy anything. they didn't have a library that people wanted to play. and yeah, i mean...even if they did get popular games on the platform, most people aren't going to pay for the same game twice? that's just common sense. if you already own it and can play it just fine, what do you need a second copy for?

1. This video is really mostly about mobile gaming and the app stores. Sure, it touches on console and PC gaming, but more as a "30% is ubiquitous" example than any actual deep dive, so I think it would've been better to either keep the focus on the phones, or actually expand to try and make the case for the entire industry, rather than leaving a fuzzy border with a few surface level mentions.

2. Steam isn't a monopoly. On the other hand, where I am, I can buy either a Google phone or an Apple phone. That's it, that's the duopoly. You can't say the same for PC games. You can get them wherever, including for free, and people still choose Steam (never owned a console, don't know about their practices, can't comment).
1a. People don't choose Steam just because their friends are there, that's reductive. Single player games are a thing, as is cross play (and, as was mentioned, Discord didn't have a problem with lack of friends). They provide actual services to players and to developers that they appreciate. Epic wants to compete with Steam, but they haven't done the bare minimum to create a comparable store front, let alone an entire ecosystem. They'd rather spend their money on exclusives and free games, because they don't understand why PC gamers like Steam. GOG, on the other hand, provides an actually needed and unique service, which is great, and also keeps them niche. Humble Bundle had a thing going there for a while. Never mind that. The point is, PC gaming includes options.

3. If it's been 30% forever, then it should have been equally as unprofitable for developers always, yet somehow as the pie grew, with more gamers and more games, that's when it became untenable? Again, it seems that focusing on what happened with the app store duopoly would've added clarity, because the switch from discussing WoW to Jobs and Apple was jarring, and at no point does it go back to WoW, that was presented as a golden age example, and address it going to shit. Nor is the switch from physical to digital media addressed in pre-mobile types of gaming. And the influence of publicly traded companies and VC on the industry only tangentially, by mentioning that big corpos have bloat.

4. Chinese business practices aren't something I'm willing to take at face value. Not numbers, not costs, not profits, not innovation, and definitely not who's allowed to do what, and what systems either devs or players are allowed to bypass.


4. I'm glad that Epic went to court, but I doubt anyone's under the illusion that they did it out of the goodness of their hearts.

5. Seriously? You say development costs increased 1000%, and AAA prices "only" 33% and then you go back to the thing that didn't change as the main problem? Why are you comparing average game prices to 3A budgets? How is that proof of no one buying "full price" games anymore, when only 3A games charge the top prices? The average (non-discounted) price of games as a whole isn't the same as the average AAA non-discounted games, so why mix them? Also, how many games a year do you believe justify a $200m+ development cost? IMO, definitely less than 50 per year, but that's just me.

6. The conclusion isn't supported by the video.

Mobile gaming has a duopoly problem. There's litigation and legislation going on globally to try an ameliorate that.

Meanwhile, AAA studios are owned by huge publicly traded corporations that inflated development costs and for whatever internal reason, they choose to claim their internal money transfers in favor of another division in the corporation rather than the studios. These are two separate problems. You can tell, because if every single platform, store front or ecosystem dropped their fees to 10% tomorrow, those same corporations will keep doing the exact same thing. You know this, because you know that they're not actually shutting down studios because they're losing money, so their incentives, whatever they are, won't suddenly change.
Just like Disney chooses to do the opposite when it comes to their entertainment division. They want to hide the fact that they're regularly losing money on their bloated film productions, so they claim that their streaming service(s) paid however many millions for the rights to stream their own films. Disney has an interest in making their films look profitable. Sony, Microsoft etc. have different corporate interests, and they'd rather close studios to make others whatever division looks better to shareholders. None of that is dependent on actual profits. Disney splits the box office take with the theatres, but that's not why so many of their movies lose hundreds of millions of Dollars.

Two issues. More than one problem. A whole bunch of other problems in the gaming industry as a whole beyond the scope of this video. The conclusion dumps different companies providing different services under different conditions to different markets into a single basket, the 30% basket, and lays all these issues at their door, equally. Worse, it barely pays lip service to the impact of the fees on indies and AA, where, presumably the majority of the negative effects of those fees lie, and instead focuses on the AAAs which not only create many of their own problems, but whose parent companies are responsible for the problems affecting the entire industry.

Bottom line, same as the top. This is a good video about mobile gaming, and a very bad video about gaming as a whole.


PS: Epic proved nothing. How many people did they just lay off because their money making machine faltered? Is the profitability of their terrible store helping with that? Why can't they invest in developing a good alternative to steam that actually provides useful features? Also, developers use Steam because of the players, yes, but also because of all the developer tools that Steam provides, and the discoverability, and the players are there not just because they have games (and their friends are there), but because they have player reviews, and efficient refunds, and regular sales, and mod support, and acknowledging the existence of Linux, etc. I'm not trying to make Steam out to be perfect (they have a censorship problem, for one, and while they highlight indie games, they probably could do more to lighten their burden, and I'm betting there'll be a bunch of examples of Steam screwing up in the comments), it just so happens that I'm more familiar with various positive aspects of it that are ignored in this video, than with whatever console platforms provide (or don't), and the Google/Apple duopoly is, as far as I'm concerned, pure cancer at this point (though they were at one time in the past a worthwhile innovative force, those days are long gone).

PPS: Call of Duty. Remind me, who owns it? Activision Blizzard? Which is owned by... Microsoft? So I'm supposed to cheer for Microsoft defeating its own fees, because it would also defeat other companies? I mean, sure, let online games of various stripes keep their own microtransactions, I don't benefit from them paying fees to platforms, but we're not exactly championing what's best for the customers or the industry as a whole here, just possibly nibbling at some edges, as far as I'm concerned. And I'm all for more payment alternatives. And the industry does move as a herd, but normally, in practice, that means that corporations learn the wrong lessons from both successes and failures, so I'm not holding my breath.