Embracer Group says the “crazy” amount they spend on platform fees tops their game development costs

Embracer Group, the Swedish video game and media group and parent company of such subsidiaries as THQ Nordic, Saber Interactive, Crystal Dynamics, Eidos Montreal, Coffee Stain (publisher of Deep Rock Galactic) and Dark Horse Comics, recently held their annual general meeting for shareholders this past Thursday. During the Q&A session, the company was asked about Epic Games’ new Epic First Run program, where developers will be able to claim 100% of the revenue share if they agree to make their game exclusive to the Epic Store for six months (after which the game will return to the standard Epic Games Store revenue split of 88% for the developer and 12% for Epic Games).

To compare, Valve’s Steam service typically takes a 30% share of game revenue, though a revenue tier system was introduced in 2018 which can upgrade a developer’s earnings upon meeting certain sales echelons.

Lara Croft in Shadow of the Tomb Raider/Embracer Group

“At the end of the day, I think it’s good having competition to Steam, because it puts them on their toes to deliver their best experience,” Embracer Group CEO Lars Wingefors said of the Epic First Run program.

“Obviously, we would like to pay less fees to platforms. In reality we are paying more fees to platforms than we spend on game development every year, and if you just think about that number, it’s crazy.

“So, there are margins with the platforms that I would preferably have within building more games and some more margins, but I think it’s great that Epic is there trying to build a competitive platform.

“At the same time,” Wingefors continued, “consumers are perhaps looking at things differently, that they want to be able to pick their platform, so there are many different perspectives to that, and I don’t want to go too deeply into that, but I think competition in general is great.”

Are you surprised at the fact that Embracer Group says the “crazy” amount they spend on platform fees tops their game development costs? Do you think they should make more of their games part of the Epic First Run program? Let us know in the comments.