Valve Corporation – the parent company for Steam, a digital distribution platform for purchasing and playing video games, has announced a new revenue distribution agreement, giving developers more financial investment as the number of sales units’ increases.
Previously, Valve takes about 10 percent of total game sales on Steam, with some exceptions for games for small developers in its Steam Direct program. But, now it will be the case for the first $10 million in sales that a gambler or publisher earns. The breakdown now goes to 25% for all sales between $ 10 million and $50 million, and after the first $50 million in sales, Steam will only receive 20% of the sales.
The updated agreement will mark the most substantial change to the financial terms of Steam in the last 15 years of their business. As Valve is facing tough competition from major publishers and other competing game stores, introducing this revenue relaxation to Steam is solely purposed to invite the number of game developers to the platform for rock steady future progress. Steam has been one of the most dominant platforms for PC games in the last decade. Valve took $4.3 billion in Steam revenue alone in 2017, without counting the downloadable and microtransaction contents.
Valve also has recently begun to introduce social features from Discord to keep its built-in social advantage of slipping and planning to launch sometime soon in the largest gaming market globally China. The recent change in Steam revenue sharing to more generous for game developers is really a super effective business strategy to keep developers happy and stick into their platform. Even though this is a well-strategized move from Valve, the future results will only the decide the outcome.