What If Epic Games Store Never Challenged Steam?

The Actual History

In December 2018, Epic Games—riding the unprecedented financial success of its battle royale phenomenon Fortnite—launched the Epic Games Store (EGS), a digital distribution platform for PC games that directly challenged Valve Corporation's dominant Steam marketplace. This move represented one of the most significant disruptions to the PC gaming ecosystem in over a decade.

Prior to Epic's entry, Steam had established near-monopolistic control over PC game distribution since its launch in 2003. By 2018, Steam was hosting over 30,000 games and serving tens of millions of users with Valve reportedly taking a 30% revenue cut from most sales—an industry standard it had effectively established. This revenue split had remained largely unchallenged until Epic's arrival.

Epic Games, led by CEO Tim Sweeney, positioned its store with two major competitive advantages. First, it offered developers a significantly more favorable revenue split—88% to developers versus just 12% to Epic, compared to Steam's 70/30 split. Second, Epic leveraged its substantial Fortnite-generated capital to secure high-profile exclusive titles, preventing them from appearing on Steam for periods ranging from months to a year or more.

The strategy proved immediately disruptive. Epic secured timed exclusivity for major titles like Metro Exodus, Borderlands 3, and Control. In some cases, games that had been advertised or even available for pre-order on Steam were suddenly announced as Epic exclusives, creating controversy among PC gamers. Epic further enticed users by regularly offering free games—sometimes premium titles—to anyone who created an account.

Valve eventually responded in November 2018 by adjusting its revenue sharing model for the most successful games, implementing a tiered system where its cut decreased to 25% after $10 million in sales and 20% after $50 million. However, this adjustment primarily benefited large publishers while leaving the standard 30% rate in place for smaller developers.

The Epic Games Store's competitive pressure extended beyond revenue splits. It prompted discussions throughout the industry about digital storefront features, developer compensation, and platform exclusivity. Epic continued its exclusivity strategy and free game offerings through subsequent years, gradually building its user base while expanding the store's initially bare-bones feature set.

By 2023-2024, the Epic Games Store had established itself as the most significant competitor to Steam in the PC digital distribution space, though still substantially smaller in terms of catalog size and concurrent users. Epic reported having over 230 million PC users by 2023, an impressive figure though still behind Steam's approximately 130 million monthly active users and much larger registered user base. Court documents from Epic's legal battle with Apple revealed that Epic had committed approximately $1 billion to secure exclusive games and free title giveaways through 2024.

Despite this significant investment, the Epic Games Store reportedly operated at a loss for years, sustained by Fortnite revenue and investment capital, as part of Epic's long-term strategy to establish market share in the digital distribution space. Meanwhile, Steam maintained its dominant position while gradually improving its platform with new social features, recommendation algorithms, and tools for developers.

The Point of Divergence

What if Epic Games never launched its competing digital store? In this alternate timeline, we explore a scenario where Epic Games chose a different path following Fortnite's enormous success in 2018, deciding not to directly challenge Steam's dominance in the PC gaming marketplace.

Several plausible factors could have led to this decision:

First, Epic might have conducted a more conservative financial analysis of the digital storefront market and concluded that the massive upfront investment required to compete with Steam—particularly the billions needed for exclusivity deals and free game giveaways—represented too great a risk, even with Fortnite's revenue stream. Internal projections may have indicated that profitability would be too distant or uncertain to justify the expenditure.

Alternatively, Tim Sweeney and the Epic leadership team might have decided to focus their windfall from Fortnite differently—perhaps by doubling down on game development, expanding their Unreal Engine business, or entering the emerging virtual reality or cloud gaming spaces instead of taking on the entrenched Steam platform.

A third possibility involves timing and priorities. Epic was simultaneously engaged in developing its metaverse concept and expanding Fortnite beyond gaming into a social platform. In our alternate timeline, Epic might have prioritized these initiatives over launching a competing store, believing they offered better long-term growth potential.

Finally, Epic might have pursued a more collaborative approach with Valve rather than direct competition. Perhaps preliminary discussions occurred where Valve indicated willingness to negotiate more favorable terms for Unreal Engine games on Steam, making a competing platform unnecessary in Epic's strategic calculus.

Regardless of the specific reason, in this divergent timeline, Epic's December 2018 announcement never comes. Instead of launching the Epic Games Store, the company announces expanded initiatives for Fortnite, Unreal Engine, or other new ventures, while continuing to distribute its PC games through existing channels, including Steam. The PC gaming ecosystem continues to evolve without this significant competitive disruption to the status quo.

Immediate Aftermath

Steam's Continued Dominance

Without Epic's challenge, Steam's position as the dominant PC game distribution platform would have remained largely unchallenged through 2019 and 2020. The most immediate consequence would be the absence of any significant pressure on Valve to reconsider its revenue-sharing model:

Revenue Split Stagnation: The 70/30 revenue split would likely have remained firmly in place without adjustment. Valve's November 2018 modification to its revenue-sharing model for high-earning games might never have materialized, as it was widely viewed as a preemptive response to Epic's imminent entry.
Feature Development Pace: Steam's development of new features would likely have proceeded at a more measured pace. The absence of direct competition would have reduced pressure to rapidly improve the platform's offerings for both developers and consumers.
Fewer Alternative Distribution Options: Without Epic providing a major alternative storefront, developers—especially indies—would have had fewer leverage points in negotiations and fewer viable alternatives for distribution.

Publisher and Developer Reactions

The absence of Epic's competitive storefront would have significantly affected how game publishers and developers approached PC distribution:

Exclusive Deals Unmaterialized: Major titles that became Epic exclusives—such as Metro Exodus, Borderlands 3, Control, and The Outer Worlds—would have launched on Steam as originally planned. The publishing strategies for these games would have been markedly different, with marketing and release plans built around Steam's ecosystem rather than Epic's exclusivity payments.
Financial Impact on Developers: Independent developers would not have benefited from Epic's more generous revenue split or from the guaranteed minimum revenue that came with some exclusivity deals. Studios like Remedy Entertainment (Control) and Obsidian Entertainment (The Outer Worlds) would have missed out on the financial security that Epic's deals provided, potentially affecting their development resources and creative freedom.
Alternative Platform Strategies: Some larger publishers might have accelerated their efforts to create their own launcher platforms. Companies like Electronic Arts (with Origin, later EA App), Ubisoft (Ubisoft Connect), and Bethesda (Bethesda Launcher) might have invested more heavily in their proprietary platforms as the only viable alternative to Steam's terms.

Industry Discourse

The conversation around digital distribution in the gaming industry would have evolved differently:

Reduced Discussion of Revenue Sharing: Without Epic's 88/12 model forcing the issue, industry conversations about fair revenue splits might have remained more muted. The 30% platform fee might have continued to be accepted as an unchangeable industry standard rather than actively questioned.
Different Focus on Platform Features: Without Epic's initially bare-bones store highlighting the importance of features, discussions might have centered less on comparing platform capabilities and more on other aspects of digital distribution.
Alternative Industry Controversies: The significant player backlash against Epic exclusivity deals would never have materialized. Instead, other industry issues—perhaps related to monetization models, loot boxes, or early access practices—might have dominated gaming discourse during this period.

Consumer Experience

The average PC gamer's experience would have been noticeably different from 2019-2021:

Absence of Free Game Programs: The millions of free games distributed by Epic—which included major titles like Grand Theft Auto V, Civilization VI, and Control—would never have been offered to consumers. This absence would have meant significantly fewer opportunities for players to build large libraries without direct purchases.
Consolidated Library Management: Gamers would have avoided the fragmentation of their game libraries across multiple platforms, a common complaint during Epic's early expansion period. Steam would have remained the primary or sole library for most PC gamers.
Different Pricing Dynamics: Without Epic's regular sales and coupon programs creating competitive pressure, Steam's discount strategies might have evolved differently, potentially with less aggressive pricing during major sale events.

Epic's Alternative Path

Without launching its own store, Epic Games would have directed its resources elsewhere:

Fortnite Evolution: Epic might have invested even more resources into Fortnite's development, potentially accelerating its evolution toward the metaverse concept and expanding its crossover events with major entertainment properties.
Unreal Engine Focus: Epic could have channeled more resources into developing Unreal Engine 5 sooner, potentially releasing it earlier than the actual May 2022 launch date, strengthening its position in the game engine market against Unity.
Game Development Expansion: Rather than building a distribution platform, Epic might have expanded its first-party game development efforts, potentially acquiring additional studios or developing new original IPs beyond Fortnite.

Long-term Impact

Digital Distribution Market Evolution

By 2025, the PC game distribution landscape would look substantially different without Epic's intervention:

Steam's Market Position

Increased Market Concentration: Without Epic's aggressive competition, Steam's market share would likely have grown even more dominant. Analyst estimates suggest Steam might have captured 75-80% of PC digital game sales compared to its current 60-65% share.
Slower Feature Innovation: The pace of significant feature additions to Steam would have been more gradual. Features like Steam Remote Play Together, the redesigned library, and improved curator systems might have arrived later or in less robust forms without competitive pressure.
Different Approach to Indie Games: Without Epic's emphasis on curated selection and highlighted indie titles, Steam might have continued its more algorithmic, hands-off approach to the growing indie game market, potentially making discovery even more challenging on its increasingly crowded storefront.

Alternative Platform Development

Publisher-Specific Platforms: The absence of a strong general competitor would likely have encouraged more publishers to develop or strengthen their proprietary distribution platforms. Companies like Take-Two Interactive might have followed Ubisoft and Electronic Arts in creating standalone launchers rather than partnering with Epic.
Microsoft's Accelerated Strategy: Microsoft's PC gaming strategy might have evolved differently, potentially accelerating the development of the Xbox PC App and Game Pass for PC to fill the competitive void left by Epic's absence. This could have positioned Microsoft as the primary Steam challenger instead of Epic.
Specialized Alternative Platforms: More specialized storefronts like itch.io (for indies) and GOG (for DRM-free games) might have seen accelerated growth as developers sought alternatives to Steam's terms, capturing specific market niches.

Business Model and Revenue Sharing Standards

The economics of PC game distribution would have evolved along a different trajectory:

Persistence of the 30% Standard: Without Epic's challenge, the 30% revenue share model might have remained the unchallenged industry standard through 2025, with only minor adjustments for the largest publishers with significant negotiating leverage.
Different Monetization Evolution: Free-to-play and games-as-a-service models might have become even more prominent as developers sought to retain more revenue through in-game purchases rather than initial sales subject to platform fees.
Publisher Subscription Services: More publishers might have pivoted toward subscription services (similar to EA Play or Ubisoft+) as a way to build direct customer relationships and reduce dependence on Steam, leading to greater subscription fragmentation.

Impact on Game Development

The absence of Epic's store would have significantly affected how games are funded and developed:

Funding and Development Models

Reduced Advance Funding: The practice of platforms providing significant upfront payments to secure exclusives—which Epic pioneered in the PC space—would not have become commonplace. This would have meant less guaranteed funding for mid-sized developers, potentially leading to more conservative game designs or increased dependence on publishers.
Different Indie Development Landscape: Without Epic's guaranteed minimums and beneficial revenue splits, some independent studios might have struggled to secure funding or maintain independence. The indie game boom might have developed differently, possibly with more publisher-dependent relationships.
Altered Cross-Platform Strategy: Without Epic creating bridges between PC and console gaming through its multi-platform approach, the PC gaming ecosystem might have remained more distinct from console environments, with fewer simultaneous releases and cross-platform features.

Game Engine Competition

Unreal Engine Pricing Models: Without the store as a strategic platform to promote its engine, Epic might have adopted different pricing strategies for Unreal Engine. The current policy where games using Unreal Engine that publish on the Epic Games Store can waive the 5% engine royalty fee would never have emerged, potentially affecting engine adoption rates.
Alternative Engine Investments: Epic might have invested even more aggressively in Unreal Engine development to compete with Unity and other engines, potentially accelerating technical innovations like Nanite and Lumen that appeared in Unreal Engine 5.

Consumer Impact and Cultural Effects

By 2025, the consumer experience and broader gaming culture would reflect the absence of Epic's disruptive influence:

Higher Average Purchase Prices: Without Epic's frequent sales, coupon offers, and free game program creating competitive pressure, average game purchase prices on PC might have remained higher. Steam sales might have offered smaller discounts without a major competitor forcing price matching.
Different Exclusivity Dynamics: Rather than timed exclusives to specific PC stores, exclusivity might have evolved more around subscription services or publisher platforms, similar to the streaming video market's fragmentation.
Altered Consumer Attitudes: The significant backlash against store exclusivity that characterized 2019-2021 would never have materialized. Instead, consumer activism might have focused on other issues like microtransactions, preservation of digital games, or ownership rights.
Social Platform Integration: Without Epic's focus on social features derived from Fortnite's success, Steam might have evolved its community features differently, potentially focusing more on its traditional strengths in user reviews and forums rather than expanded social capabilities.

Epic Games' Alternative Trajectory

Without investing billions in establishing a store, Epic's business and influence would have developed along different lines:

Financial Position: Epic might have maintained a stronger cash position without the reported billions spent on store exclusives and free games. This could have enabled different strategic investments, possibly including more studio acquisitions or earlier expansion into emerging technologies.
Metaverse Development: Epic might have accelerated its metaverse ambitions sooner, potentially establishing Fortnite as an even more central platform for virtual events and experiences beyond gaming, given additional focused resources.
Different Regulatory Position: Without its battles over store policies, Epic might never have engaged in its high-profile legal challenges against mobile platform holders like Apple and Google. These lawsuits, which stemmed partly from Epic's frustration with closed platforms and high revenue shares (similar to its complaints about Steam), significantly influenced the ongoing regulatory discussion about digital marketplaces.

Expert Opinions

Dr. Joost van Dreunen, former Professor of Business at New York University's Stern School of Business and digital games industry analyst, offers this perspective: "Epic's decision to challenge Steam represented one of the most capital-intensive competitive moves in gaming history. In a timeline where this challenge never materialized, we would likely see a more concentrated but potentially less innovative PC gaming ecosystem today. Valve's 30% revenue share model might have remained the unchallenged standard, much as we've seen Apple maintain in mobile despite regulatory pressure. The absence of Epic's disruptive influence would likely have particularly impacted independent developers, who benefited most from both the improved revenue terms and the funding security that Epic's exclusivity deals provided."

Maria Williams, Principal Researcher at the Institute for Platform Economics, provides a different analysis: "The Epic Games Store, while failing to displace Steam, nonetheless succeeded in resetting industry expectations around revenue sharing and platform fees. Without Epic's challenge, we might have seen different actors—perhaps Microsoft, Amazon, or even a consortium of publishers—eventually emerge to question the sustainability of the 30% standard. However, this pressure would likely have come years later and with less intensity. One overlooked consequence in this alternate timeline would be the impact on emerging markets. Epic's more developer-friendly terms were particularly beneficial for studios in regions like Southeast Asia and Eastern Europe, where profit margins are critical for sustainability. Without Epic's model, we might see a less geographically diverse development landscape in 2025."

Alex Chen, Chief Technology Officer at Indieverse Studios and former platform developer, considers the technological implications: "Epic's challenge to Steam wasn't just about revenue splits—it was also about pushing platform technology forward in specific directions. Without Epic's influence, we might have seen cloud gaming emerge as the primary competitive battlefield instead of store revenue terms. The technical infrastructure of PC gaming distribution might have evolved differently, with less emphasis on cross-platform play—which Epic championed—and more on platform-specific optimization. Steam would likely have maintained its more hands-off approach to curation longer, potentially exacerbating the 'discoverability crisis' for smaller developers as the number of releases continued to grow exponentially through 2020-2025."