Store Wars: Epic Games Takes on Valve, Google with Own Games Store

Epic Games, the maker of the Unreal Engine gaming engine, has just announced its own multi-platform games store. The company will support Windows and macOS at launch, but it will also support “other open platforms,” including Android and presumably Linux, next year.

Epic Games Launches Own Game Store

Through the extremely successful Fortnite game, Epic Games gained both significant amounts of revenues as well as experience to run its own digital store. This experience allowed the company to learn just how much it costs to run a digital store, which ultimately enabled it to offer third-party developers 88% of the games' revenues.

That means Epic Games takes only a 12% cut, which is almost three times smaller than what Steam and Google Play Store charge most developers. Epic said there are no tiers or thresholds that developers have to meet either, unlike with other platforms.

Moreover, developers that use the Unreal Engine and who normally have to pay a 5% royalty will be exempted from paying that royalty, as Epic will take its 5% cut from the 12% store commission. Epic Games noted that games using other game engines are welcome on its store, too:

“We’ve built this store and its economic model so that Epic’s interests are aligned with your interests. Because of the high volume of Fortnite transactions, we can process store payments, serve bandwidth, and support customers very efficiently. From Epic’s 12% store fee, we’ll have a profitable business we’ll grow and reinvest in for years to come!”

The Store Wars Have Begun

Earlier this year, Epic Games accused Google of taking too high of a commission just for hosting developers’ apps on its store. As a result of this, the company ended-up recommending users to install its game from outside the Play Store, including from third-party Android app stores.

Google normally takes a 30% cut from the third-party developers’ app revenues. Apple and Valve’s Steam service take the same 30% cut. However, Steam recently announced a reduction in its commissions for large developers, presumably to preempt the launch of Epic Games’ store.

Steam now charges large developers that have earnings of over $10 million a 25% commission, and those that have earnings over $50 million a 20% commission. The latter is still almost twice as large as Epic Games’ commission. Additionally, some of those developers may still have to pay the 5% Unreal Engine royalty on top of the Steam commission.

Epic Games can’t launch its games from outside of the iOS App Store yet, because unlike with Android devices, iOS users can’t sideload applications on iOS devices. However, Apple is currently involved in a lawsuit that reached the Supreme Court, and depending on the ruling, Apple may be forced to allow other app stores on the iOS app store. Furthermore, if the justices rule this way, their ruling may also impact other app stores, such as the Microsoft Store or the Xbox and Playstation stores. That would give Epic Games even more room to grow on other platforms, but the same would be true for Steam and other app stores, too.