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Discord Store to offer developers 90 percent of game revenues


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Discord has announced that it will start taking a reduced, 10-percent cut from game revenues generated on its online store starting next year, one-upping the Epic Games Store and its recently announced 12-percent cut on the Epic Games Store.

"We talked to a lot of developers, and many of them feel that current stores are not earning their 30% of the usual 70/30 revenue share," Discord writes in the announcement. "Because of this, we now see developers creating their own stores and launchers to distribute their games instead of focusing on what’s really important—making great games and cultivating amazing communities.

"Turns out, it does not cost 30% to distribute games in 2018," the announcement continues. "After doing some research, we discovered that we can build amazing developer tools, run them, and give developers the majority of the revenue share."

The move comes alongside a coming expansion of the Discord Games Store, which launched earlier this year with a tightly curated selection of games that now includes roughly 100 titles. The coming "self-serve publishing platform" will allow developers "no matter what size, from AAA to single-person teams" to access the Discord Store and the new 90-percent revenue share.

With tens of millions of users already turning to Discord as an online voice chat and general communication solution, the Discord Game Store has a built-in audience of users potentially interested in buying games. The company has also tried to differentiate its store with the "First on Discord" program, giving prominent placement to a handful of promising indie games on the service in exchange for timed exclusivity. Discord's paid Nitro subscription program also gives free access to dozens of games as well as other premium Discord communication features.

A growing threat to Steam?

For well over a decade now, major game platforms on consoles, PC, and mobile (including Discord) have generally followed Steam's lead in taking a 30-percent cut of revenues from any games sold through their online stores. The first major crack in that de facto standard came last week, when Epic launched its own store that only takes a 12-percent cut of total revenues. Unlike Discord's newly open policy, though, Epic still maintains tight curation of its store, with an extremely limited game selection so far.

Valve recently announced slight alterations to Steam's revenue sharing terms but only for titles that have made at least $10 million in revenue. That's fine for the biggest publishers, but it probably won't do much to help dissuade smaller game makers from considering the friendly revenue terms on these newer platforms.
Where Steam still has an advantage, of course, is in the sheer momentum of its network effects. As the market leader for years now, Steam is where millions of PC players still overwhelmingly turn to find their online friends, manage their game libraries and patches, and look for personalized, algorithmic recommendations for new games (especially during heavily promoted sales). Already, many gamers are chafing at the prospect of managing more distinct game platforms, each with their own siloed game stores and launchers, just to play their collection of PC games.

That said, gamers could consider these new platforms if exclusive and/or free games they want are on offer, or if they already have another reason to log in (e.g., voice chat and Fortnite). Offering more generous revenue-sharing terms could also be enough to entice developers to move their titles to platforms besides Steam, helping to break the chicken-and-egg cycle of developers simply flocking to where the players already are.

It's still early, and Steam is still a behemoth, but these kinds of aggressive moves from the likes of Epic and Discord could represent the greatest threat to Valve's dominance in PC game distribution so far.
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