Epic Games CEO says he’ll foot the bill for refunds related to exclusives

Tim Sweeney, as divisive as he seems to be among gamers, is continuing to champion developers. As Ys Net announced to Kickstarter backers, Shenmue 3 will be exclusively available on the Epic Games Store. The third installment in the Shenmue series was originally supposed to be distributed through Steam, but as more and more publishers (and developers) are taking notice of: EGS is an easier, more profitable approach for distributing digital games.

There are a number of consumers that have shown a considerable amount of vitriol for the Epic Games Store exclusives. As such, Ys Net has confirmed that it is offering refunds for backers (and those that pre-ordered on EGS) who may not want to support Shenmue 3 on another launcher. Sweeney upped the ante by stating that Epic Games will handle the refunds so that Ys Net’s development budget will go uninjured. 

Epic is funding the cost of all Kickstarter refunds resulting from Shenmue III’s move to the Epic Games store, so that refunds won’t reduce Ys Net’s development funding. https://t.co/mSGdbzYPJ5

— Tim Sweeney (@TimSweeneyEpic) July 2, 2019

Shenmue 3 has been chugging along in development hell since the beginning of its Kickstarter campaign in the summer of 2015. Granted, Shenmue 3 shattered Kickstarter records that summer by raking in a cool $6 million (the most a video game has made on KS) before the end of the campaign, but it needed three more rounds of funding (and a publishing deal with Deep Silver) to round out an expensive development schedule, which is running two years behind what was originally stated in the campaign. 

“Taking publishing and sales considerations into account, YSNET and Deep Silver agreed to our partnership with Epic Games Store on PC version distribution,” Ys Net wrote in a Kickstarter Update. “As a publishing partner, Deep Silver has greatly contributed not only to sales and marketing, but to scaling up the game so there is more Shenmue III to begin with. Also, Epic Games has been with us from the start of the project when we adopted Unreal Engine 4 for development, and have given us their support throughout the development process.”

Epic Games has been with Ys Net since the beginning of this project, as Shenmue 3 is being developed on with the Unreal engine. Ys Net likely also received Epic’s generous Unreal licensing agreement that would have seen any licensing fees from the last four years refunded. And while, yes, Deep Silver does have control over the marketing and publishing efforts, including where the game will be distributed, EGS and Shenmue 3 aren’t particularly strange bedfellows based on their mutual pedigree. 

As more publishers and developers decry the 70/30 revenue share split that has become standard in the industry, across Steam, Sony, Microsoft, Nintendo, Apple, and Google, we will likely see more cases like Shenmue 3, Metro Exodus (another Deep Silver property), and The Division 2. Sweeney’s assurance that Epic will pick up the tab for requested refunds from gamers who prefer Steam to EGS is a safety net and backstop for developers that might otherwise have had to weigh the cost of refunds against the financial benefits of a time-limited exclusive deal.