As Korean game companies expand their push into the PC and console markets, the commission burden paid to Steam, the global PC game platform, is growing. Steam fees generated from Pearl Abyss's "Crimson Desert" and Krafton's "Subnautica 2," which were hits on Steam in the first half of this year, are expected to reach 100 billion won. In particular, because Steam has served as a springboard for global success, these companies are using it as a core distribution channel despite the high commission burden.
According to the game industry on the 11th, Pearl Abyss's "Crimson Desert" and Krafton's "Subnautica 2" ranked third and fifth, respectively, in first-half Steam new release sales and succeeded globally. Released in Mar., "Crimson Desert" surpassed cumulative sales of 6 million units in 83 days. According to Alinea Analytics, "Crimson Desert" recorded about $190 million (255.6 billion won) in cumulative first-half Steam sales, the most among new IPs launched this year.
Developed by Krafton subsidiary Unknown Worlds, "Subnautica 2" sold 4 million copies on Steam within five days of its early access launch in May, and its peak concurrent users reached 460,000. The game's cumulative first-half Steam sales were tallied at about $133.6 million (179.7 billion won). In addition, Krafton's flagship IP "Battlegrounds" climbed into the top 10 multiple times on Steam's weekly and monthly sales charts in the first half of this year, extending its long run.
As the two companies' PC games became hits, the commissions they paid to Steam are also presumed to have increased. According to the Financial Supervisory Service's electronic disclosure system, the commissions paid that Krafton and Pearl Abyss recognized as expense in the first half of this year totaled 712.7 billion won. Krafton's commissions paid were 639.7 billion won, up 254.6% from a year earlier, and Pearl Abyss's were 73.1 billion won, up 179.0%. However, commissions paid include not only platform fees such as Steam but also various outsourcing and service costs.
The exact commissions the two companies actually paid to Steam were not disclosed. However, applying Steam's standard commission rates to the disclosed sales estimates, the commissions generated by the two new titles in the first half of this year are estimated to reach 100 billion won. Steam applies a 30% commission up to $10 million in cumulative sales per game, 25% for the portion exceeding $10 million up to $50 million, and 20% for amounts above $50 million.
Alinea Analytics estimates the combined Steam sales of "Crimson Desert" and "Subnautica 2" at $323.6 million (435.3 billion won). Applying the tiered commission rates to each title results in about $41 million (55.1 billion won) for "Crimson Desert" and about $29.72 million (40.0 billion won) for "Subnautica 2," bringing the combined commissions for the two games to an estimated $70.72 million (95.1 billion won).
Despite the commission burden, the two companies can hardly forgo Steam because it has served as a springboard for global success. In particular, both companies are game makers that achieved global hits by leveraging Steam. Through Steam's massive user base, they entered markets such as North America and Europe that are hard to penetrate with their own distribution networks alone, and on that basis grew their IP into global games.
Battlegrounds launched globally via Steam in Mar. 2017 and the following Jan. became the first Steam game to surpass 3 million concurrent users. On the back of Battlegrounds' success, Krafton rose to become a leading Korean game company. Pearl Abyss's "Black Desert," which entered Steam in May the same year, sold 300,000 copies in its first week alone, rapidly building an overseas user base. It continued to generate revenue over a long period, serving as a key earnings source for Pearl Abyss.
On the back of the two games' success, Korean game companies began moving in earnest onto Steam. Korean titles such as Smilegate's "LOST ARK," Nexon's "KartRider: Drift," and Neowiz's "DJMAX Respect V" were released on Steam one after another. While game companies use their own distribution networks in Korea, Japan, and China, they actively use Steam to target North America and Europe. However, Steam's commission rate, which can reach as high as 30%, is a significant burden for Korean game companies. The more a major new title succeeds, the larger the absolute amount of commissions paid to Steam becomes.
A game industry official said, "Steam is the most effective distribution channel for securing North American and European users and raising awareness of new releases," adding, "However, even with the heavy commission burden, it is difficult for Korean game companies targeting the global market to exclude Steam."