Profile of SturmtigerCobra

Epic Store sale, and why it's pissing off gamers and developers/publishers alike
https://twitter.com/CaseyExplosion/status/1129713218321027073
@caseyexplosion
Hey folks, today let's talk about the Epic Store sale, and why it's pissing off gamers and developers/publishers alike. Because it's easy to snark and say "lol, the Gamers™ are angry about a sale!" but this is a good deal more serious.

To understand why, let's talk about sales!

Now, what normally happens during a sale event (like a Steam sale) is that the publishers or developers opt in, and they set the discounts. What Epic is doing however, is something very different.

Take special note of this: "...at no cost to the publisher or developer."

That additional $10 discount? That is money that Epic is paying out to the developers. They are effectively buying those discounts, so even though a game is significantly reduced for the customer, the developers still earn the same revenue they would have at full price.
So, why are developers pissed off about this, and are yanking their games from the Epic store, or altering the prices? Even though they still get paid for it out of Epic's pocket? Because they had no say in this, and it immediately devalues their games, especially indie titles.
Epic are paying developers that $10 even if their games are only just up for pre-order, which means that for indie developers pricing their games around $15, it's now worth $5 in the eyes of customers before it's even out. It's been devalued for good, and they had no say in it.
With indie games, pricing and discounts are very serious subjects, because the perceived value is on shaky ground. Ever see snarky responses to indie devs at launch? It's sometimes downright cruel!

"Why would I pay 20 bucks for this, when it'll be in a bundle in 6 months time?"
So right now, you can buy a game that isn't even out yet for a third of the full asking price, because Epic is paying that $10 discount. So before this game is even out, it's perceived value is $5.19.

That's why games are being pulled from the store, or controversially bumping their prices, see for example indie titles Hades and Oxygen Not Included suddenly bumping their prices. They didn't have a say in their games going so cheap, even if they still got paid for the discount.
And the reason that The Gamers™ are furious over this, and saying silly things like "Epic are BRIBING gamers!" is that it's another example of Epic throwing their money around. As reactionary, and over the top as they can be, it's not entire wrong...

They're buying customers.
There's an anxiety about Epic because what they're doing is aggressive. They don't want to be competition, they want to be the last man standing and be the defacto monopoly. That's the end goal, drive Valve out of business and reap the benefits.

And they have the money to that.
To a lot of gamers, competition would be someone coming along and building a better platform than Steam. They never imagined someone could just come along with more money than god and buy a load of exclusives to force them to use a garbage platform nobody wants or even likes.
*SNIP*

https://www.eurogamer.net/articles/2019-05-18-borderlands-3-pre-order-pulled-from-epic-games-store-amid-mega-sale-kerfuffle
UPDATE: Publisher 2K has said Borderlands 3 will return to the Epic Games store soon, and games sold at the sale price will be honoured.

However, it failed to explain why it pulled Borderlands 3 from the Epic Games store.

Here's the statement sent to Eurogamer by a 2K rep this evening:

"We are working closely with Epic and have temporarily removed Borderlands 3 from their storefront. We look forward to the game being back on the Epic Games store soon. Games bought during their Mega Sale will be honored at that price."

To be clear, this doesn't mean that all of the games presented at the PC Gaming Show are partnered with Epic. Expect more than 20 different developers to show new trailers or make announcements.

The Raging Court Dispute Between a Frisco Gaming Company and a Former Exec
The CEO of Gearbox and its former general counsel were childhood friends. Now they're pointing fingers over secret bonuses, credit card misuse, and even underage porn.

https://www.dmagazine.com/publications/d-ceo/2019/may/the-raging-court-dispute-between-a-frisco-gaming-company-and-a-former-exec/
What began as a heartwarming tale—a videogame-obsessed kid grows up to develop games himself, co-founds a successful video game company, and hires his childhood friend as the company’s general counsel—has turned into a bitter, acrimonious shootout waged not in the theater of a gaming console, but in a Dallas courtroom. And although it’s not unheard of for companies and their top in-house counsels to part ways, the dispute between former Gearbox Software top lawyer Wade Callender and his former employers, including CEO and childhood friend Randy Pitchford, has devolved into an ugly clash colored by allegations of a “secret bonus,” corporate credit card misuse, and even “underage porn.” Robert Bogdanowicz, a partner at Dallas’ Calhoun, Bhella & Sechrest, says this type of rancor is uncommon. “Even when a CEO and their general counsel have differences or part ways under less than cordial circumstances, it rarely erupts in one or both airing any dirty laundry,” he says.

Like some of the games Gearbox is known for, the story of the Callender/Pitchford relationship has a quaint beginning. They were childhood friends in Maryland during the early 1980s who shared a love of videogames. Callender stayed on the East Coast, earning his law degree at Catholic University before clerking for a federal appellate judge in Washington, D.C., and serving as a Navy JAG officer. Pitchford headed west, attending UCLA before getting into video game development and eventually co-founding Gearbox in 1999. The Frisco-based company has been wildly successful, quickly moving from making videogames for the likes of Valve Software to creating its own brands, like the popular Borderlands franchise and the Brothers in Arms series.

The childhood friends were reunited in 2010, with Callender’s hiring as executive counsel for Gearbox. A year later, he would be promoted to general counsel and vice president of legal affairs. But between that time and Callender’s alleged July 27, 2018 resignation, the parties have wildly divergent descriptions of the former GC’s tenure. According to Callender, he served “with distinction,” stewarding the company through the departure of co-founder Brian Martel and the consolidation of Gearbox’s ownership between Pitchford and remaining partner Stephen Bahl, a class action lawsuit, and other legal challenges. Callender’s lawsuit asserts that he was rewarded with a 3 percent equity stake in the company, a one-third ownership in a new entity (The Hatch LLC), and other benefits. Yet during his entire tenure at Gearbox, Callender maintains, Pitchford would “constantly harass” him for his Christian beliefs.

“It’s going to be a long process, but we believe the truth with prevail.”

BARRY MOSCOWITZ
In his lawsuit, Callender also claims that in November 2016, Pitchford told him that he had reached a private “side deal” with Take 2 Interactive, the publisher of Gearbox’s Borderlands franchise, for a $12 million “executive bonus” paid directly to a Pitchford entity, “Pitchford Entertainment Media Magic LLC.” Callender says he raised concerns about the bonus with Pitchford, but was rebuffed about that and about documenting the alleged verbal reassurances about increasing Callender’s compensation and equity. Ultimately, disillusioned with what he describes as “unrelenting tyranny,” Callender says he attempted to commence negotiating an “exit strategy” with Pitchford, only to have Pitchford preemptively announce that Callender had resigned.

Like a videogame teases new expansion, Callender’s lawsuit promises revelations of “unthinkable acts” on Pitchford’s part “that will become clear throughout discovery and trial.” But the suit hints at a few, like the allegation that in 2014, Pitchford misplaced a USB drive containing sensitive Gearbox company information and the CEO’s “personal collection of ‘underage’ pornography.” The suit goes on to allege that Pitchford holds events at the private theater in his home where “adult men have exposed themselves to minors, to the amusement of Randy Pitchford.”

‘Worst Kind of Betrayal’
Callender’s shocking claims have been met with vehement denials and fierce opposition. Barry Moscowitz, the partner at Dallas-based Thomson Coe Cousins & Irons who is leading Gearbox’s and Pitchford’s defense, calls Callender’s allegations “absurd,” “really disgusting,” and “the worst kind of betrayal.” Moscowitz says it’s a betrayal that’s both personal and professional: “It’s first of all a factual betrayal, because what Callender is saying is false. But it’s also the personal betrayal of a longtime friend, as well as the betrayal of a client whose lawyer has violated attorney-client privilege,” he says.

In November 2018, Gearbox filed a lawsuit against its former GC in Collin County; that lawsuit has now been transferred to Dallas County, joining the lawsuit that Callender filed last December. Gearbox is suing Callender for, among other things, breach of contract, conversion, unjust enrichment, fraud, and breach of fiduciary duty. According to the lawsuit, Gearbox made a $300,000 cash loan to Callender in April 2014 so he could purchase a $900,000 home in Frisco. Payments on the loan were deducted from Callender’s “grossed up” monthly earnings. But in March 2018, Callender demanded that the payments cease, leaving a balance owed of more $136,000. Gearbox accuses Callender of not only reneging on the loan but destroying the signed loan agreement.

Pitchford and Gearbox also claim that Callender persuaded them that he could add value with an executive MBA from Pepperdine, eschewing local MBA programs. They say that Gearbox paid the entire cost associated with the MBA, including tuition and “hotel and first class airfare to Southern California multiple times per month”—to the tune of over $125,000. On top of that, Gearbox maintains that in 2017 and 2018, when Callender “found himself involved in contentious litigation regarding personal matters in Maryland,” it paid for the GC’s legal fees and expenses totaling more than $50,000. Gearbox also alleges that Callender abused the corporate American Express account by “charging unapproved, wholly personal expenses” that included family vacations to Disneyland, memberships to gun clubs like the Frisco Gun Club, and “trying to get six-pack abs” through charges to “sixpackshortcuts.com.” The most expensive such abuse, says Gearbox, came on Callender’s last day of employment when he obtained an increase on the American Express line of credit for the purpose of making a $17,000 payment to his Maryland attorneys, incurred the charge, and then “emptied his office and resigned as general counsel” without repaying the expense as promised.

In response to the allegations of Pitchford’s alleged USB drive of “underage porn,” Pitchford himself addressed that in a December 2018 appearance on “The Piff Pod,” a podcast about magic (Pitchford is a former professional magician and longtime magic aficionado). On the podcast, Pitchford explains that, far from a “collection,” the drive contained a “camgirl” video, whose host used the handle “Only 18” and who was demonstrating an adult-oriented magic trick that fascinated the CEO. As for the supposedly lewd behavior at parties thrown by Pitchford, it apparently eluded the Dallas Morning News entertainment critic who wrote a glowing review in June 2016 of the world-class magicians and entertainers that Pitchford and his wife spotlighted at the “Peacock Theater” in their home.

Callender was the first to pursue legal action after his employment ended, filing an Oct. 27, 2018 charge of religious discrimination with the Texas Workforce Commission’s Civil Rights Division and the Equal Employment Opportunity Commission. And although Gearbox may have drawn first blood in the courts with their lawsuit and temporary restraining order that has since been dissolved, the very first line of Callender’s petition makes it clear that he’s not pulling any punches, calling Randy Pitchford “a manipulative and morally bankrupt CEO who shamefully exploited his oldest friend.”

Barry Moscowitz replies that it’s Callender who is the “manipulative liar,” making “false and salacious allegations while hiding behind a term of art like ‘upon information and belief.’” Callender’s attorney, James Bell, says that it “makes no sense” that Gearbox “suddenly sues its most valued executive for supposedly resigning while Gearbox was pouring money and resources into him.” About the only thing the warring sides seem to agree on is that this case is likely to go all the way to trial.

The problem is that Sweeney is pretending like his company is offering the same service that Steam is. It’s like if McDonald’s challenged a fancy restaurant to lower the price of steak to the price of a Happy Meal and then acted like they were fighting for the little guy.

https://www.escapistmagazine.com/v2/2019/05/07/why-steam-cant-meet-epics-price-challenge/
*SNIP*
In Defense of the Steam Cut

The assumption seems to be that Valve is sitting back and soaking up all this money without providing any value to the consumer. Sweeney even calls them “the Game Developer IRS.” This is a popular viewpoint, but it’s not really accurate.

Back in March, Valve employees gave a talk at GDC where they revealed some details about the Steam infrastructure. Apparently Valve Software has a presence in 30 major cities around the world, and they have their own direct connections between these locations that are independent of the public internet. It’s like a backup internet running on top of the public net. This network handles content delivery and gameplay data. The advantage of this setup is that it insulates Steam users from internet congestion. The example the developers gave at the talk is the release of an episode of Game of Thrones, when millions of people all begin streaming HD video at the same time. Gamers might still experience delays due to local congestion thanks to lousy internet providers, but Valve’s backup internet gives everyone the best chance to enjoy speedy downloads and lag-free multiplayer games.

Last year, the Valve network handled two exabytes of data. That exceeds the entire global internet traffic load of 2003. If some node of this network were to fail, or if someone were to attack it, the system is designed to seamlessly reroute Steam’s traffic over to the regular internet until the problem is resolved. Valve has built a network with a global presence, multiple layers of redundancy, and staggering throughput. This network is available and free to use for any game that releases on Steam, regardless of where that game was sold. This means that if you release a game on Steam and also on GoG, copies sold on GoG still can enjoy the multiplayer benefits of Valve’s content delivery system. This is pretty generous considering how easy it is to get a game on Steam these days. It means almost any starry-eyed developer has free access to this massive system for their game.

It takes an enormous investment of cash to design, build, and maintain a global system like this. You can criticize Valve for a lot of things, but it’s pretty hard to sell the notion that the company doesn’t care about games and just wants to rake in a big pile of money.

Valve has also adapted their store to work within a myriad of different countries. In Japan, gamers don’t buy things online using credit cards. Instead, they go to a convenience store to buy store credit. Essentially, this system allows consumers to buy things online using cash. It might seem odd to Westerners, but this is how Japanese urbanites want to buy things. If you want to do business with them, then you need to do it on their terms.

Lots of countries have their own particular preferences for how people expect to buy things, how local businesses behave, and how local governments regulate and tax transactions. Again, it takes a big upfront investment to create a system that allows you to do business globally.

Why Valve Can’t Match the 12% Cut
When you buy a gift card in a retail outlet, the retailer usually keeps between 10% and 15% of the face value. So if you buy a $10 Steam card at Walmart, then Walmart might keep $1.50. Valve would get the remaining $8.50, and they’d give you $10 of Store credit. Since Steam keeps 30% of the purchase price of a game, Valve can afford to eat this $1.50 loss. However, if Valve took Sweeney up on his challenge and lowered the Steam cut to 12%, it would make selling gift cards a losing proposition. Sweeney is acting like he’s fighting for a better cut for developers, but he’s also demanding that Valve agree to lose money on every game sale in Japan forever.

Sweeney’s store is a barebones skeleton, so it’s easy for his company to take such a small bite of sales. That’s fine, inasmuch as it gives developers a choice. If they just want a place to sell games, they can go with the Epic Games Store. If they want a full-featured store then they can go with Steam.

The problem is that Sweeney is pretending like his company is offering the same service that Steam is. It’s like if McDonald’s challenged a fancy restaurant to lower the price of steak to the price of a Happy Meal and then acted like they were fighting for the little guy.

I agree with Sweeney’s principle that Valve takes a huge cut and the market could use some more competition. Not every game needs the vast resources of Valve’s sprawling global infrastructure. If I make a simple single-player 2D game and I don’t have the means to localize the game for non-English audiences, then I don’t need the high-speed content delivery network or multiplayer framework, and I don’t benefit from the ability to access foreign markets. I’m probably running a small operation with just two or three people. When Valve keeps 30% of my game’s sales price, they’re taking money that’s important to me but peanuts to them. They’re taking money I need in exchange for a lot of services I don’t. It would be great if Steam offered some sort of bargain for those of us who don’t need or want the full slate of Steam features.

The irony is that Steam is the only major platform that will welcome those broke indie developers. Obscure indie games that don’t need Steam’s extra features and can’t really afford the 30% cut would be better off on a minimalist platform like the Epic Games Store, but EGS is a curated platform that’s only interested in titles with mainstream appeal. Epic is avoiding helping the small fry operations that need the EGS the most, and instead signing deals with major titles that really ought to be using the Steam network infrastructure.

I’d be more inclined to side with Epic if the platform was more robust. The company is working on it, and the feature roadmap makes it seem like Epic is aware of the EGS’s many shortcomings. But Sweeney daring Valve to match Epic in price when EGS isn’t even close to matching Steam in features isn’t reasonable or fair. Sweeney needs to spend less time issuing challenges to Valve and a little more time overcoming the challenges his company has in front of it.