In a series of posts on Twitter, the head of Epic Games Tim Sweeney outlined his defense for the Epic Games Store exclusive strategy for PC game releases. Addressing the backlash he outlines the reasoning, which is all about loosening Steam's grip on the marketplace. And the platform's revenue split of 70/30 being detrimental to developers.

This question gets to the core of Epic’s strategy for competing with dominant storefronts. We believe exclusives are the only strategy that will change the 70/30 status quo at a large enough scale to permanently affect the whole game industry.

— Tim Sweeney (@TimSweeneyEpic) June 25, 2019

With Tim adding, "For example, after years of great work by independent stores (excluding big publishers like EA-Activision-Ubi), none seem to have reached 5% of Steam’s scale. Nearly all have more features than Epic; and the ability to discount games is limited by various external pressures." Citing previous attempts by larger publishers to exclusively release titles on their own storefronts as overall successful measures. "This leads to the strategy of exclusives which, though unpopular with dedicated Steam gamers, do work, as established by the major publisher storefronts and by the key Epic Games store releases compared to their former Steam revenue projections and their actual console sales."

He then goes on to outline that exclusives are an attempt to essentially change the entire model of digital PC storefronts. And yes, it all comes down to Valve taking at 30-percent cut of all Steam game sales. "The 30% store tax usually exceeds the entire profits of the developer who built the game that’s sold. This is a disastrous situation for developers and publishers alike, so I believe the strategy of exclusives is proportionate to the problem. If the Epic strategy either succeeds in building a second major storefront for PC games with an 88/12 revenue split, or even just leads other stores to significantly improve their terms, the result will be a major wave of reinvestment in game development and a lowering of costs."

As this is a series of posts on Twitter, we don't get clear data or examples, so we can only assume that the information presented is true. "Will the resulting 18% increase in developer and publisher revenue benefit gamers? Such gains are generally split among (1) reinvestment, (2) profit, and (3) price reduction. The more games are competing with each other, the more likely the proceeds are to go to (1) and (3). So I believe this approach passes the test of ultimately benefiting gamers after game storefronts have re-balanced and developers have reinvested more of their fruits of their labor into creation rather than taxation."

No doubt the Epic Games Store is here to stay, as are exclusive releases on the platform. From that standpoint the biggest issue we see, and a very fair argument to make is the overall lack of features present compared to Steam. It'll be interesting to see if Valve address or change its revenue model in the future.