The archive · Business Models · Strategic decision · 2018
Epic Games opens a PC store where developers keep 88% of sales — undercutting the 30% norm
Epic turned its Fortnite launcher into a game store that takes 12% of sales instead of the standard 30%, backed by its own hit games.
Epic Games
What it had to solve
PC game distribution ran through Valve's Steam, which took around 30% of every sale, with Apple and Google taking the same cut on mobile. Epic — itself a developer — had long argued store fees were unfair, but only after Fortnite built a huge PC audience through its own launcher did it have the reach to open a rival store.
How it works
For most of modern PC gaming, Valve's Steam took about 30% of every sale — the same cut Apple and Google charged on mobile. Epic Games, maker of Unreal Engine and Fortnite, argued as a developer that the fee was unjustified, but it lacked a storefront and an audience large enough to compete.
Fortnite changed that. By 2018 the game had built one of the largest PC audiences in the world through Epic's own launcher, so on December 4, 2018 Epic announced it would open that launcher to third-party games with a flat 88/12 revenue split: 88% to developers, 12% to Epic, with no tiers or thresholds, no store-wide DRM, and Unreal Engine royalties waived on store sales.
The launch was deliberately small — a hand-curated selection of PC and Mac games, an approval process, and a Support-A-Creator program that let streamers earn a share of attributable sales. The store opened days later with titles like Hades and Ashen, funded by Fortnite's revenue and Epic's own games.
Why it lands
- Epic attacked the platform fee itself — the one number every developer compared — instead of just building a nicer store.
- Fortnite's audience gave Epic a distribution advantage it could price below Steam's 30% without dying.
- Waiving Unreal royalties on store sales removed the conflict of interest for developers using Epic's own engine.
- Curating the store and paying creators for attributable sales replaced algorithms and paid ads with human recommendation.
- Announcing days after Valve's tiered cut made the comparison vivid and forced the industry to argue about economics.
What it did
The 88/12 split instantly reframed platform economics: Valve had just announced tiered cuts for top sellers, and Epic's flat 12% made the platform fee itself a competitive weapon. The store opened days later with curated titles and a creator-revenue program, and the split became the benchmark every game store has since been measured against.
What you can take
If you control the audience, you can reset the incumbent's fee: price distribution far below the standard cut and make the fee itself the differentiator — the number every developer compares.
Since then
The store opened on December 6, 2018 with a small curated catalog and the 88/12 split intact. Epic funded the economics with Fortnite's revenue, gave away free games weekly, and paid publishers for exclusives. Valve later introduced lower revenue tiers of its own, and the fight over the platform tax widened to Apple and Google — setting up Epic's antitrust lawsuit over app-store fees.
Sources
- Epic Games takes on Steam with its own fairer game store
- ‘Fortnite’ Creator Epic Games Launches Online Store With 88% Revenue Share
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