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by Jach 2536 days ago
What are the costs close to, and what are the costs of distribution if you did it yourself? Feel free to break it down into cost of business across n countries, cost of storage and bandwidth, some bare-minimum listing fee somewhere to at least enable theoretical discovery, and ignore all the other services the platforms provide.

I mentioned probable economies of scale in a cousin comment, but I don't think they offer all that much. Do you have a % in mind that you intuitively think could be knocked off from the stores of Valve, GOG, Google, Apple, Microsoft, Salesforce App Exchange, and Amazon Appstore, all taking around 30% before you get into the fine print?
1 comments
gamblor956 2536 days ago
The costs aren't 30%.

Assume a $50 game. 100,000 sales. 5 gigs.

Storage and bandwidth = $28,000 (per Amazon's calculator) Cost of doing business in N countries = use paypal = 2.9%+0.30/sale = approximately $1.75/sale = $175,000

Costs = $203,000 Revenue = $5,000,000 Ratio = 4.1%

So yeah, Valve is not the shining knight here and that 30% fee is unjustifiable. Even Epic's 12% share is still very much profitable for Epic.

The 30% fee is also nowhere comparable to wholesale pricing schema of the retail model (effectively a 40-60% fee), since that involved the sale of physical copies of goods, and the retailers had to deal with issues like shrinkage and the risk of unsold inventory.

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zlsa 2536 days ago
I don't have any numbers, but I would not expect the median sale price to be anywhere near $50. I'd expect there to be more sales of <$30 games, as a percentage of revenue, than >$30 games. And the cost of distribution goes up relative to the cost of the game as the sale price goes down.
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learc83 2536 days ago
Assuming the sale price of the game in the OP's example was $10, distribution still cost less than 3%, and paypal goes up very slightly because of the $0.30 base charge, but the main fee is percentage based so it doesn't change. So even for a $10 game we're looking at less than 9% in total.

This example is also using s3 retail pricing and paypal retail pricing, which already factors in profits for Amazon and Paypal.

None of the big marketplace's costs are anywhere near 30%.

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