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August 15, 2020
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The Steam Direct Application Fee: A Threat to Indie Developers

by Nathan Bennett on 02/13/17 10:03:00 am

The following blog post, unless otherwise noted, was written by a member of Gamasutra’s community.
The thoughts and opinions expressed are those of the writer and not Gamasutra or its parent company.


Today Steam announced a new system to replace Steam Greenlight: Steam Direct. The goal is to provide a superior alternative to greenlight that works out some of the kinks in the system. I concede that greenlight is filled with low-quality asset flips and severely needs a rehaul or replacement but something in this announcement gravely concerned me: the application fee.

The fee was stated to be up to $5,000. To be clear, nothing is set in stone yet. Steam has proposed these numbers as TBD. $5,000 is their maximum estimate. Here is the direct quote from the post:

"While we have invested heavily in our content pipeline and personalized store, we’re still debating the publishing fee for Steam Direct. We talked to several developers and studios about an appropriate fee, and they gave us a range of responses from as low as $100 to as high as $5,000. There are pros and cons at either end of the spectrum, so we’d like to gather more feedback before settling on a number."

But the concern remains; seeing a  number anywhere near that high is terrifying for thousands of indie developers. The primary argument for a high fee is this: quality indie games should be making a lot more than $5k so a fee that high shouldn't be a problem. But quality does not instantly equate to profitability, look at the case of Brigador. Secondly, profitability is not the only goal of putting out a game, some developers want to deliver an experience to as many people as possible rather than establish a profit. This is popular in standalone mods.

Indie game development is a generally unprofitable expenditure. It's highly likely that the first few releases from a studio will be overall unprofitable, and while higher quality will drastically reduce this risk, it is still a very real possibility. There is no shortage of overwhelmingly positive games on steam with a negligible player base. But these games serve a purpose, they demonstrate a studio's ability to create and attract a loyal following, no matter how small it starts. With a high entrance fee, fledgling studios will not be able to lay the groundwork to reach critical mass.

In its current state, as flawed as it is, greenlight still manages to serve one purpose really well. It provides a low-cost solution for advertising and gauging player-interest. This tool is immensely valuable to independent developers and helped generate over $100 million in revenue as the article itself noted.

Steam claims that the fee will be "recoupable", but it does so in very vague terms. Is it recoupable in the sense that developers have the potential to make more money from sales or that steam will waive their usual cut until that threshold is crossed? This needs to be clarified. What is recoupable for independent developers is constantly diminishing. Developers are already waging a war against storefronts, publishers, and crowdfunding sites to retain a fair percentage of profits, and are very lucky if they are able to keep 50% of what the game makes. A high entrance fee gives publishers another excuse to take another 20-40% of revenues.

Shovelware is already frequently profitable. That's why we see so much of it. The more notorious companies won't have an issue paying $5,000, but the struggling indie developer will. The soul of the independent game is originality, and with originality comes huge risk. We shouldn't stifle creativity by making that risk even higher. This industry is so volatile that even the most hardened wall-street broker would be cautious taking out a loan out to fund a game.

For a one-man-studio $5k can be enough to fuel anywhere from 3-6 months of development time in the US. $5k is enough to commission a killer soundtrack or breathtaking graphics. $5k can buy licenses, frameworks, and assets to drastically increase production quality. So yes, the money can be gained from a Kickstarter, but that money should be used to create better games, not get through gatekeepers.

There is another complication with a high submission fee that I am particularly worried about. Game development is one of the most global markets there is. There is a beauty in the diversity of the industry and it is inspiring to see teams who never meet each other face-to-face create awesome stuff. A fee that is even on the low end of four figures will inadvertently hurt indie game releases in other countries. In the US or Canada, these high fees will be a huge issue for startup devs, but in some countries, they are impossible hurdles.

Take Ed from Latvia. He tells me the monthly minimum wage is 370 Euros before taxes. He was hoping to publish on Steam eventually but is unsure with today's news. Instead, he may have to start on mobile platforms, where it is even harder for quality content to stand out. Suji is a hobbyist developer from Croatia passionate about game development. He has been working on a mod for Black Mesa in source engine since last year and is hoping to release it for free on Steam. Submission fees in the thousands is a surreal amount of money for him, more than he's spent on anything in his life.

Even in countries that are the biggest exporters of video games this is problematic. Leo from the US East Coast has a condition that makes finding a job difficult. He was lucky to find one and now works a numbing 12 hours a day. He's been saving  80% of his monthly income after rent to stockpile enough savings to work on his indie game full-time for 18 months. An egregious fee would deeply cut into that time. Leo estimates he needs the full 18 months to create a product he is able to show for crowdfunding or early-access, but if the fee is prohibitively high, he may not have enough time.

For developers like these, a high fee will make publishing to steam almost impossible, stifling the diverse global nature of game development. Even for the developers who can afford it, the end product will suffer. As a gamer it worries me that my favorite platform may no longer be home to innovative and obscure indie games and as a developer, it's disheartening to see an opportunity becoming significantly more difficult to achieve for me and thousands of others. Valve has made some of the best video games of all time, and the most popular PC gaming platform by far. I know they can come up with a better solution to this than a paywall.

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