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Valve's user-created content store earns modders $50k

Fri 22 Oct 2010 8:56am GMT / 4:56am EDT / 1:56am PDT
Development

Royalties from virtual item shop "mind-blowing", say creators - while Valve takes even more

Royalties from the new in-game user-created content store in Valve's multiplayer shooter Team Fortress 2 have approached $50,000 for some players.

Five modders, who won a competition to have their creations featured, earned five-figure sums from the in-game Mann Co. Store - which opened just a fortnight ago.

Creators keep 25 per cent of all item sales, with the rest going to Valve. The highest-revealed royalty payment to date is $47,000, meaning Valve would have taken approximately $140,000 from the sales of just one modder's content.

"It was completely mind-blowing, the size of the return that we're getting on these things," modder Spencer Kern, one of the top two earners so far, told Gamasutra.

Valve flew Kern and another player, Steven Skidmore, to its office to present them with their money first-hand, as payments had exceed Paypal's permissible limits.

Said Valve boss Gabe Newell, "It benefits us because it grows the community, right? These [content creators] benefit, but we benefit too.

"Once people realise this is about their community, and that the right people are getting the benefits... after a while, they'll say, 'This is really how these kinds of communities need to work.'"

Valve will also sell its own content on the store, but plans to significantly extend the range of amateur contributions. Prices for items currently range from less than a dollar to $17.50.

"What you really want to do is create per-person pricing, or per-person monetisation or per-person ways of creating value," said Newell. "In a sense, asking 'could you support a game entirely with just this as a monetisation model?' - you could."

17 Comments

Wow, if Valve keeps up this speed of innovation they gonna rule the digital distribution space for a long time. It's both fascinating and frightening to see their business creativity at work leaving any competition in the dust.

Posted:4 years ago

#1

Nick McCrea Gentleman, Pocket Starship

191 297 1.6
You mean in addition to whatever sales tax is charged at the front end and income tax paid by the creators on the revenues?

Posted:4 years ago

#2

Graham Simpson Tea boy, Collins Stewart

219 7 0.0
Valve will declare the income as revenue and profits and pay corporation tax and the modder will have to declare the income or get crushed by the IRS/IR. There is no additional tax smoking gun issue here. Simple business.

Posted:4 years ago

#3

Mark Hunter Studying MA Environment Modelling, Teesside University

9 0 0.0
this is awesome, wish i entered lol

Posted:4 years ago

#4

Daniel Vardy Studying HND IT, De Montfort University

90 1 0.0
I think the only reason this 'model' is working for TF2 is because it has such a large following. If this was tried with a newly released game i dont think it would work to the same extent. To me it seems the community behind TF2 accepts this mainly due to the prolonged support by Valve on the game for free.

Posted:4 years ago

#5
Bloody hell. Makes me wish I did design instead of programming. I could have done with better 3D modelling skills...

Posted:4 years ago

#6

Daniel Chou Senior Artist, WMS Gaming

1 0 0.0
When I heard this news yesterday, I felt that the gaming industry just took another evolution.
User generated content has been around for a while, but to make a popular game as a platform for other digital distribution will definitely be the new frontier for others to follow. It cost the main developers nothing other than implementing contents generated for free by users. Not only is it profitable but it also prolongs the lifespan of the game.

Imagine Activision Blizzard or Microsoft or other big developers/publisher follow this format, for their future releases? This could be huge....User generated cosmetic items for WoW or any next gen MMORPG.....

I will end this with a dollar sign instead of a period$

Posted:4 years ago

#7

Wojciech Mroczek Awesome Content Specialist, GOG.com

18 10 0.6
I really hope that many other companies notice that what Valve did there is a really brilliant business model. Or a part of one, anyway. There's a lot of VERY creative, talented people out there who just lack a right platform to get their ideas distributed. I see this as a huge thing in the future.

Posted:4 years ago

#8

Temi Web design

48 9 0.2
25% is a bit low but Better than nothing

Posted:4 years ago

#9

Neil Alphonso Lead Designer, Splash Damage Ltd

48 17 0.4
I'm obviously doing this wrong.

Posted:4 years ago

#10

Jamie Watson Studying Bachelor of Games & Interactive Entertainment, Queensland University of Technology

179 0 0.0
damm...thats a nice income just for mods!

i better gett modding then!

Posted:4 years ago

#11

Max Priddy

64 12 0.2
I know what I'm gonna be doing now then!

Posted:4 years ago

#12

Richard Gardner Artist, Crytek

123 32 0.3
On the subject of downloadable content I think a lot of studios and publishers forget about it as a main source of revenue, even more so than hard sales. As an example look at Brink, its new to the market and looks great. But you know generally it will be looking at a million sales, may be more depending on how well its marketed.

But because of the way the game has been designed, they can have quick turn around of weapons and character customisation. This means they could easily make more revenue than there preprocessors by simply following a more lucrative micro transaction formula which has worked very well for a lot of people in the last year.

In fact, we are still yet to see any first person shooter adopt the micro transaction formula, instead they all seem to be large packs. Although right of the bat I have a very sneaky feeling within a few months of Black Ops been released, Activation will allow you to purchase currency.

Posted:4 years ago

#13

Daniel Vardy Studying HND IT, De Montfort University

90 1 0.0
the problem with DLC is that some developers take it to extremes. it seems these days it is the norm to release DLC on the same day the game hits the store, which in most cases is a half-arsed attempt at adding something useless to the game. in most cases you are basically required to purchase DLC to get the finished game. i miss the days when expansion packs were worth buying and were actually good, its a rare occurrence these days to get something good for your money.

Posted:4 years ago

#14

Richard Gardner Artist, Crytek

123 32 0.3
I don't believe I have experienced any game that has day one DLC that wasn't free if you purchased the game new... Speaking of future DLC prospects I loved what Capcom did with Case Zero, it really geared me up to buy the main game. The thing with DLC like that is it really needs to be planned well into the game from the very beginning (case zero was very much the beginning of the concept). DLC decisions always seem to come late into development, if there was more consistent focus on trying something new and really pushing the methods and content scope I think it could be very lucrative. The industry is filled with to much anxiety these days, with an overwhelming majority following others instead of trying something logical.

Posted:4 years ago

#15

Daniel Vardy Studying HND IT, De Montfort University

90 1 0.0
i may have over exaggerated by saying release day DLC, but i was using it to make a point, which is that it seems DLC is released very early into a games retail life. im sure within a month of Mafia 2 being released there was at least 1 DLC pack. it seems to me that some companies are losing focus on making a great game and are looking instead to making addons to make a game 'better'.

Posted:4 years ago

#16

Richard Gardner Artist, Crytek

123 32 0.3
I would disagree, developers look heavily to metacritic and early reviews to help drive sales. A lot more people these days read them before purchasing, at least more than 5-10 years ago anyway. I think the main reason you see DLC within the first month is to stop people trading in the game. The first few months of a games sales are generally where 95% of all the revenue comes from (boxed sales only). The less second hand copies available the better for revenues.

Just take a look at how quickly sales dropped of even for Modern Warfare 2, its fairly drastic.
http://gamrreview.vgchartz.com/sales/288...

Posted:3 years ago

#17

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