Phoenix Point Developers Reportedly Got $2 Million For Epic Games Store Deal
A mix of math and logic allowed ResetERA user to have the exact number
Last month, we reported that Phoenix Point, a game many call XCOM’s spiritual successor, will be an Epic Games Store exclusive for 12 months. The deal was announced after the game has gone through its crowdfunding, and naturally, many fans were outraged over this sudden change of plans.
Apart from giving developers and publishers a bigger sales cut, Epic pays them a flat fee for an exclusive release in their marketplace. Obviously, the contracts’ values are kept in secret, but the user Remachinate seems to have managed to extract the exact sum in this ResetERA thread. According to him, Epic paid Snapshot games more than $2 million.
Phoenix Point was crowdfunded using Fig platform (the same company Obsidian used to raise money for Pillars of Eternity II). Their key difference from other platforms like Kickstarter is that Fig treats backers as investors, allowing them to receive dividends for their investments. The same ResetERA user was an investor for Phoenix Point, so he received an email from Fig, announcing that the game has already accrued a 191% return of investments.
The poster went on to explain how exactly Fig works:
"Investors don't invest in the developer itself, but rather in preferred shares of Fig. For each game, Fig enters a license agreement with the developer agreeing to a revenue split on all revenue from the game, in exchange for which Fig runs the crowdfunding/investing campaign and certain other services. Fig then agrees to provide dividends to the individual investors out of their share of the revenue at a certain percentage — 85% in the case of Phoenix Point."
For Phoenix Point’s investors to break even, Fig needed to raise $588,235. Since it was announced that return of investments is already at 191%, the total ROI now equals $955,000. Taking into consideration the 85% share of the investors, the total revenue of Fig amounts to $1,123,529. The original poster also assumes that split between Fig and Snapshot games is 50/50, which means that the total royalties paid to Fig and Snapshot games are approximately $2,247,058. Apparently, this is the amount Epic Games paid for a 1-year exclusivity deal.
How do we know that this money only comes from Epic deal? Well, since the game has not yet released, it’s obvious that there is no sales revenue. The only other possible source of income would be Xbox Game Pass deal, because Phoenix Point will also be a part of Microsoft’s subscription service. However, Xbox deal was announced in June 2018, but according to the table of revenue, there was no money earned for the game as of September 2018.
While Microsoft could arrange a deal that would be paid or recognized only after September 2018 (QC Games lead software engineer talked about it in the same thread), it still gives us a pretty good guesstimate on how much money is involved with such kind of exclusivity deals. Considering that Phoenix Point is a relatively unknown title, the amounts paid for games such as Detroit or The Division 2 could be mind-boggling.