Why would anyone need publishers I just don't understand. I paid money to Factorio developers. I've got zipped game. Best UX in the world. Compare that to the Steam or Origin pain when I need to spent hours trying to install all that stuff and having my computer full of spyware afterwards, yuck!
Direct sales involve handling credit cards (i.e. chargebacks, scams) as well as getting in bed with potentially every tax authority in the world. For example, for every game sold in European country, you need to collect VAT and transfer it to that country's tax authority (currently, there's something like 28 of them?). This also includes filling out forms... Steam takes care of all that for you.
However! Publishers don't do that. Publishers' value proposition is funding the development and doing the marketing for you, so that you can concentrate on making the game. If the game tanks, they eat up the losses (i.e. it's an investment, not a loan). The retail is a separate issue and, while it's handled by the publishers, is still likely to be handled via Steam or other platforms.
Wouldn't they just use a 3rd party payment processor these days (e.g. stripe or similar)? I can't imagine taxes, chargebacks and other things being such a huge issue now for a small independent who could likely leverage one of the many available payment platforms.
Marketing seems to be the biggest draw for using a publisher these days. That and getting easy access to partner management with sony and microsoft. My understanding is that some publishers are even quite good at social media now, helping indies get exposure on twitch and youtube.
I'm in eu and don't have to pay vat for extra eu or even extra country but in eu sales.. it depends on bilateral agreement between countries i suppose..
You do not pay additional VAT, you just pay the VAT of the country your customer is resident of instead of your own country. To do that you need to be registered in all EU countries and file VAT for each one of them.
There is an alternative for online services, etc called VAT MOSS[0], mainly meant for smaller sellers which allow you to keep paying VAT in your own country without registering in all of them but you still need to apply different VAT rates depending on your customer's country. Also you need to keep records of these transactions.
Steam (and other services... well actually even Steam uses an external service for this) handle that stuff for you and you only deal with Steam.
you definitely have to add the relevant VAT, depending on your customer country, declare it in MOSS where it will be sent to every individual country.
You also have to check if your customer is any other of the countries / states that collect VAT (India, Indonesia, many US states and oh so many random countries) and make a proper declaration in each country. It's almost impossible to do it right if you don't go with a partner to handle it all.
Traditionally, game publishers were mostly a bank. Their main job was not marketing and publishing (although that's important too), but financing a game's development until it was ready for release, and sometimes to help out with resources and services (like localization, quality assurance, etc).
That's why Kickstarter and Steam Early Access are such a big deal, they allowed new financing models and independent game-dev studios to emanzipate themselves from publishers.
It is definitely possible to do marketing and localization alone as a company, but it will divert studio's focus from game development, which could do more harm than good since game development is insanely hard. Physical distribution is almost impossible to do properly for a small company. Of course there are game investors that invest into specific games and it could be better fit than publishers, but you can do both.
need to spent hours trying to install all that stuff
I do think that the steam's fee of 30% feels strange, but all the infrastructure they provide is pretty sweet. How do you update the zip file you downloaded? Do you trust every developer to keep their download servers running forever so you can always download it later?
This is comparable to what every developer on every console has paid for over three decades in publishing, and still leagues better than what they were making from boxed retail sales.
I plan to publish my game on Steam soon. The 30% seems steep until you realise they're handling distribution, payment processing, forums and marketing if the initial traction is good. There are many great quality of life features in Steamworks that enhance my game greatly, and I do not need any server infrastructure. That being said, I would not enjoy having to pay a publisher as well.
Same here, Steam is not painful at all to install and manage. And I don't get how Steam is spyware, other than tracking when and for how long I run which Steam game, and what my hardware configuration is.
Not everyone can afford to manage a server, nor have the necessary skills to do so, and thus Steam becomes a convenient tool to distribute one's game through. Factorio too is sold on Steam, but is also available through their own site.
I've heard that one of the appealing features of Steam for developers is how easy it is to upload new versions and generally distribute your game.
The network effect of having established a marketplace with millions of consumers who pay for games is non-trivial. Steam is a trusted name in gaming for a reason.
Steam also promotes games, has reviews of them, and suggests games directly to players. The first time I personally heard of many of the games I play has been through Steam, Humble, GOG, Epic's game launcher/store app or other launchers and game selling sites.
I also can reinstall hundreds of games from Steam without remembering who developed it, who paid for the development, or who published it to Steam. I just tell the Steam client to install it based on the name of the game. That's a great usability and convenience feature.
> Compare that to the Steam or Origin pain when I need to spent hours trying to install all that stuff and having my computer full of spyware afterwards, yuck!
Yeah, double clicking on a game and having it automatically downloaded and executed... hours of work and hundreds of viruses! You have obviously never used steam and origin.
As someone who sometimes has spotty internet service, steam games work just fine when steam is in offline mode. I share the frustration of needing to update a game before playing it, but that actually can be prevented on a per-game basis, and obviously doesn't happen if running in offline mode.
Steam has offline mode which does not require internet connection. You still may not be able to play the game if the game itself requires an internet connection, but that has nothing to do with Steam.
In general the publisher pays for development. For big games from known studios, you get a several million dollar advance that pays for development of the game. The game's royalties payback the advance and hopefully you earn something.
That is why EA owns so many game studios one big flop and suddenly you owe EA a couple of million.
No one owes the publisher anything for a commercial failure in standard publisher contract where they are funding development. The publisher is taking the financial risk; that’s the point. The developer will make additional money beyond the advance based on terms of the publishing contract (common terms would be developer starts getting paid royalties when publisher has 1XX% recouped development + marketing spend).
In that case, would there be any purpose going to a publisher rather than a bank directly? You’d be paying infinite royalty on success in exchange for.. marketing & distribution?
Weather Factory, developer of Cultist Simulator, has been open about the business side of their development. This includes a few blog posts about their decision to go with a publisher (Humble Bundle) instead of going alone.
tl;dr Up-front advance was important for cash flow and risk management. At the end of the day they ended up with less profit but think it was the right decision anyways.
In the same way that authors who write books "need" publishers. You can self publish but that can make it much harder for an unknown person to succeed.
In some cases a publisher makes sense, in some it does not.
