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Valve are in the legal spotlight again following the EU Commission Fine with a few more Steam troubles, as a new lawsuit has emerged with a claim about an "abuse" of their market power.

First picked up by the Hollywood Reporter, which has the full document showing the lawsuit was filed on January 28, was filed by 5 people together and doesn't appear to have any major companies backing it. The suit mentions how Valve require developers to sign an agreement that contains a "Most Favored Nations" provision to have developers keep the price of their games the same on Steam as other platforms. To be clear, they're talking about the Steam Distribution Agreement which isn't public and not what we can all see in the Steamworks documentation which talks about keys.

This means (if the claim is actually true) that developers cannot have their game on itch, GOG, Humble or anywhere else at a lower price, and so the lawsuit claims that other platforms are unable to compete on pricing "thereby insulating the Steam platform from competition" and that it "acts as an artificial barrier to entry by potential rival platforms and as higher prices lead to less sales of PC Games".

As part of the lawsuit it also names CD Projekt, Ubisoft, Devolver Digital and others.

It argues that if developers could legitimately set their own prices across different stores, they could lower their prices on stores that take a lower cut and "generate the same or even greater revenue per game as a result of the lower commissions, while lowering prices to consumers". They even directly bring up posts on Twitter from the Epic Games CEO, Tim Sweeney, like this one from 2019:

Steam has veto power over prices, so if a multi-store developer wishes to sell their game for a lower price on the Epic Games store than Steam, then: 1) Valve can simply say “no” 2) Pricing disparity would likely anger Steam users, leading to review bombing, etc

What are your thoughts on this? Should Valve be forced to allow developers to set their own prices, and not require their price to be the same as other stores?

Article taken from GamingOnLinux.com.
Tags: Misc, Steam, Valve
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134 comments
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TheSHEEEP 7 Feb
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Quoting: tuubi
Quoting: TheSHEEEPA lower cut is good for developers and neutral for customers.

So in total, a positive thing.
I guess this could hypothetically be a bad thing for customers if it means the store owner (Valve in this case) decides to cut spending on platform development and upkeep due to smaller profit margins.
Eh, their profit margins are so large, they can - and do - already offer lower cuts to large publishers / developers.
And those deals are outside of the automatic lowering of the cut to 20% after - IIRC - selling 50 million $ worth of game.

Funny enough, large publishers wouldn't even need all those cuts to begin with due to the sheer number of their sales (not that they don't welcome them, mind you).
Adding to all of that, large game releases are what earns Steam the most money - yet they are willing to take a lower cut there - but nowhere else. Hmmmm.

Meanwhile, indie devs get no such treatment - despite Valve being more than capable of granting them a lower cut as well.
And this is mostly about indie/small devs for me, as that is where the best games and most of the passion are at. For them, the 30% cut is more than just a small problem. E.g. the difference between having to sell 1000 games a month to make a living or having to sell 1150 is significant.
For big publishers, the difference is merely one of making a bit more or a bit less profit (but it is profit, either way).

tl;dr: Steam does already grant lower cuts, so it's not like they couldn't afford it - but not to those who'd need it.


Last edited by TheSHEEEP on 7 February 2021 at 11:21 am UTC
x_wing 7 Feb
Quoting: TheSHEEEPEh, their profit margins are so large, they can - and do - already offer lower cuts to large publishers / developers.
Valve isn't a public company so there is no way to know the profit. You're speculating here.

Quoting: TheSHEEEPAnd those deals are outside of the automatic lowering of the cut to 20% after - IIRC - selling 50 million $ worth of game.

Funny enough, large publishers wouldn't even need all those cuts to begin with due to the sheer number of their sales (not that they don't welcome them, mind you).
Adding to all of that, large game releases are what earns Steam the most money - yet they are willing to take a lower cut there - but nowhere else. Hmmmm.

Meanwhile, indie devs get no such treatment - despite Valve being more than capable of granting them a lower cut as well.
And this is mostly about indie/small devs for me, as that is where the best games and most of the passion are at. For them, the 30% cut is more than just a small problem. E.g. the difference between having to sell 1000 games a month to make a living or having to sell 1150 is significant.
For big publishers, the difference is merely one of making a bit more or a bit less profit (but it is profit, either way).

tl;dr: Steam does already grant lower cuts, so it's not like they couldn't afford it - but not to those who'd need it.

Other stores takes the exact same cut but it seems that Steam is always the one that get all the FUD.
TheSHEEEP 7 Feb
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Quoting: x_wingValve isn't a public company so there is no way to know the profit. You're speculating here.
Hardly.
I can't know the exact numbers, obviously, but you can do a rather well educated guess based on the public numbers Valve does release, the prices, what you know about hosting / infrastructure costs, the relatively low number of employees, etc.
Hint: You won't end up at 30% as the required number for a tidy profit.

Quoting: x_wingOther stores takes the exact same cut but it seems that Steam is always the one that get all the FUD.
Valve is just a topic here more often due to most other stores barely being relevant to this site. Obviously the same cut isn't really justified anywhere.
But in contrast to e.g. the PlayStation Store, developers on PC have a choice of where to publish if they want a lower cut. At least in theory. That choice simply doesn't exist on consoles, or on IOS/Android.

Critizing Valve, in contrast e.g. to criticizing Sony, might actually lead to a result that is beneficial to developers. Especially since EGS showed up.
x_wing 7 Feb
Quoting: TheSHEEEPI can't know the exact numbers, obviously, but you can do a rather well educated guess based on the public numbers Valve does release, the prices, what you know about hosting / infrastructure costs, the relatively low number of employees, etc.
Hint: You won't end up at 30% as the required number for a tidy profit.

I can also do a rather well educated guess of Steam infrastructure and I can tell you that it isn't cheap. But mostly, I can see that Valve invest their profit in the gaming market so is kinda difficult to me to say that I don't think that they deserve that cut.

Quoting: TheSHEEEPCritizing Valve, in contrast e.g. to criticizing Sony, might actually lead to a result that is beneficial to developers. Especially since EGS showed up.

But the discussion is always focused on what EGS "criticize". Everyone talks about the 30% cut but never talks about the cut that devs get when items of his game are sold in the market, the tools that Steam provides in order to simplify the release/development process for their games or the access that devs have to activation keys in order do a retail sale wherever they want. Let's be honest, this is not about developers this is just about the FUD that Epic created against Valve.


Last edited by x_wing on 7 February 2021 at 3:51 pm UTC
TheSHEEEP 7 Feb
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Quoting: x_wingBut mostly, I can see that Valve invest their profit in the gaming market
Wrong, again.
You can see that they invest some of their profit into the gaming market. Which is undoubtedly more than others do, which is a great thing, especially for us.
If they didn't invest anything back, they'd end up with a similar share to Epic, about 12% for developing/maintaining their store infrastructure and all things related to it. Actually Epic nets a profit from even that, but they don't have as much stuff to maintain and their service is just straight worse, so let's just say 12% let's you be even if you are Valve.

Now, if you want to assume that those 18% of Valve's cut they invest back into the market in the form of hardware & software research (incl. Proton), I can't stop you. But I can tell you it is absurd. Even if you assumed twice the number of employees that the highest estimate shows for Valve you couldn't spend that much money on them - assuming Valve doesn't pay multiple times the industry standard wages for everyone...

More realistically, they invest maybe half of that or less into non-profitable endeavours, meaning they could easily ask for a 20% cut from everyone, still do everything they do now, and still be on top of it all.

Quoting: x_wingLet's be honest, this is not about developers this is just about the FUD that Epic created against Valve.
Let's be honest, yes: You have no idea what you are talking about in this matter.
I haven't read a single argument of yours that actually holds up upon inspection.
People have been bringing the same points against the 30% cut since way before Epic entered the picture, though Epic certainly lend the whole criticism much more publicity and credit.
You should do yourself a favor and stop now, before it gets too embarrassing.


Last edited by TheSHEEEP on 7 February 2021 at 4:37 pm UTC
x_wing 8 Feb
Quoting: TheSHEEEP
Quoting: x_wingBut mostly, I can see that Valve invest their profit in the gaming market
Wrong, again.
You can see that they invest some of their profit into the gaming market. Which is undoubtedly more than others do, which is a great thing, especially for us.

Grammar games? Really? Please don't twist my words, with this I meant that as a customer I can see were the money goes with Valve (and as a Linux user, this is a strong argument). Unfortunately I cannot say the same with other stores.

Quoting: TheSHEEEPIf they didn't invest anything back, they'd end up with a similar share to Epic, about 12% for developing/maintaining their store infrastructure and all things related to it. Actually Epic nets a profit from even that, but they don't have as much stuff to maintain and their service is just straight worse, so let's just say 12% let's you be even if you are Valve.

How do you know that? If I have to guess, Epic is losing money right now. For each free copy they give they are probably forced to pay a fee to the publisher. Not to mention that the temporal exclusives aren't cheap. This strategies aren't new in the gaming market, many new comers always worked at loss in the first years.

Quoting: TheSHEEEPMore realistically, they invest maybe half of that or less into non-profitable endeavours, meaning they could easily ask for a 20% cut from everyone, still do everything they do now, and still be on top of it all.

"Wrong, again." There is now way you can get any number out of this as Valve isn't a public company. Unless you're Valve's accountant or a shareholder of Valve, this number are pure speculation (not to mention that you don't evaluate costs).

Quoting: TheSHEEEPLet's be honest, yes: You have no idea what you are talking about in this matter.
I haven't read a single argument of yours that actually holds up upon inspection.
People have been bringing the same points against the 30% cut since way before Epic entered the picture, though Epic certainly lend the whole criticism much more publicity and credit.
You should do yourself a favor and stop now, before it gets too embarrassing.

Are you sure that my arguments don't holds up an inspection? Is kinda fun to read this when in this same answer I see that you're giving me some credit regarding the Epic participation. Also, I mentioned the advantages of Steam for many developers (with extra revenue sources), something that you may want to add to your revenue estimations. Regarding "People have been bringing the same points against the 30%" I probably should ask by whom? Before Epic drama, I never heard a complain about that cut (at least not for Steam).

You're really an arrogant person. You imply that I don't bring any valid argument and I have no idea of what I'm talking about when you keep creating numbers from nowhere in order to justify what could be the right fee of a Store. Not to mention that you try to show some advantages of fee reduction for customer when many showed you that Epic didn't bring any advantage for us. If you don't find any sense on my arguments it's probably related to the fact that you've decided to not read my answers. So yeah, just lie to yourself.
kuhpunkt 8 Feb
Quoting: TheSHEEEPOf course, to the mind of a rabid fanboy, calling things out like a way too big cut or a refusal to have regional pricing within the same currency zone immediately makes you a hater.

How do you know it's a way too big cut? What cut would be appropriate?
kuhpunkt 8 Feb
Quoting: TheSHEEEPEh, their profit margins are so large, they can - and do - already offer lower cuts to large publishers / developers.

How do you know that they already offer lower cuts to large publishers/developers? CD Projekt Red is pretty big and Cyberpunk 2077 was one of the biggest launches in history. They didn't get an extra deal.
kuhpunkt 8 Feb
Quoting: TheSHEEEP
Quoting: x_wingValve isn't a public company so there is no way to know the profit. You're speculating here.
Hardly.
I can't know the exact numbers, obviously, but you can do a rather well educated guess based on the public numbers Valve does release, the prices, what you know about hosting / infrastructure costs, the relatively low number of employees, etc.
Hint: You won't end up at 30% as the required number for a tidy profit.

gog broke down their costs running the store any say said that running their store costs about 20% and 10% is actual profit for them.
kuhpunkt 8 Feb
Quoting: TheSHEEEPLet's be honest, yes: You have no idea what you are talking about in this matter.
I haven't read a single argument of yours that actually holds up upon inspection.

You haven't shown any sign that you have an idea what you are talking about. Nothing but allegations that you can't back up.
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