"This change will reward the positive network effects generated by developers of big games"

Valve has announced changes to its Steam Distribution Agreement that enables developers of the platform's biggest games to retain more profit.

Broadly in line with the profit share tiers across other platforms like Nintendo, PlayStation, and Xbox, Valve roughly takes a 30 per cent cut of all game sales published on its PC digital platform. Now, however, Valve has agreed to drop its share to 25 per cent once revenue surpasses $10 million, and then down to 20 per cent for sales over $50 million. The changes - which apply from October 1st, 2018 - will apply to all revenue, including in-game purchases and DLC.

"The value of a large network like Steam has many benefits that are contributed to and shared by all the participants," stated Valve's Erik P (thanks, ResetEra). "Finding the right balance to reflect those contributions is a tricky but important factor in a well-functioning network. It's always been apparent that successful games and their large audiences have a material impact on those network effects so making sure Steam recognizes and continues to be an attractive platform for those games is an important goal for all participants in the network."

"Our hope is this change will reward the positive network effects generated by developers of big games, further aligning their interests with Steam and the community."

The revenue split between Valve and external developers who publish on Steam isn’t rigidly fixed, but Valve has always maintained the revenue splits are "flexible but fair". While Valve has chosen not to intimate why it's making these changes now, the increase in developers and publishers creating their own PC launchers and retain all profits - such as Bethesda decision not to bring Fallout 76 to Steam - may be one such reason.

Bethesda’s previous MMO release, the Elder Scrolls Online, did see a release on Steam and while it was generally considered a seamless experience, there have been times when the game has been rendered unplayable owing to issues on the Steam side of things – so such decisions may well be about more than just profits.

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