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Here we go again, yet another lawsuit has been filed against Steam developer Valve Software over an alleged abuse of their market position with their 30% cut. This time around it's a noted developer, Wolfire Games (Overgrowth, Receiver), along with two individuals William Herbert and Daniel Escobar "on behalf of all others similarly situated".

According to the documents, the argument is similar to one we've heard before. They're claiming that of the huge market that PC gaming is, "75% flow through the online storefront of a single company, Valve" and that "Valve uses that dominance to take an extraordinarily high cut from nearly every sale that passes through its store—30%" which results in "higher prices and less innovation" and that Valve can do this because of their market position so developers "have no choice but to sell most of their games through the Steam Store, where they are subject to Valve’s 30% toll".

One of the cited people is former Valve developer Richard Geldreich, who famously tweeted:

Steam was killing PC gaming. It was a 30% tax on an entire industry. It was unsustainable. You have no idea how profitable Steam was for Valve. It was a virtual printing press. It distorted the entire company. Epic is fixing this for all gamers.

The suit also mentions clauses Valve have that prevent developers selling at cheaper prices on other stores, "Valve blocks pro-competitive price competition through two main provisions—the Steam Key Price Parity Provision and the Price Veto Provision".

It goes even further to mention the likes of Microsoft, EA and more companies that tried and "failed to develop a robust commercial strategy away from the Steam Gaming Platform" arguing that it shows how vital Steam is and so the behaviour is anticompetitive. On top of that it even pulls in the Steam Workshop and the Steam Market, to claim this keeps developers even more tied to Valve and Steam and that Valve takes a big cut.

What are they hoping to achieve with this lawsuit? On top of damages and the usual, they want "injunctive relief removing Valve’s anticompetitive provisions" to "bring competition to the market and benefit the public as a whole".

Article taken from GamingOnLinux.com.
Tags: Meta, Valve
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169 comments
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Protektor 6 May
Quoting: denyasis
Quoting: scaineThat's why these devs, who got thousand plus sales before the algorithm change, suddenly...

Quoting: Purple Library GuyThat thing Scaine is talking about with the algorithm, that's terrible, and very real


While I agree with you, I think it's worth asking if the algo is really the main issue or is it control they have over a games potential success?

Valve basically can pick the winners and losers by what they decide to put on thier store front. Wether they use an algo or not to make those picks seems secondary. Would you agree that is more the core issue?

Valve sometimes uses an algo to put games on the store front. From what I can see they also handpick things as well (thier self promotion is pretty obvious to me). I'm curious how much active manipulation they do to the results beyond thier self promotion. I'm also curious how much extra a publisher or dev has to pay for that service. I'd expect it's the type of service that's only offered to certain clients.


I worked in the business and I can absolutely tell you that Steam sold ads on their home page because I have had developers tell me they did and ask if the gaming store I worked for did the same and we did not. Steam pulled underhanded shit all the time and absolutely picks the winners and losers on their store. Five Nights at Fredy's was not on Steam and Steam wanted nothing to do with them until they started to take off on other stores and then Steam allowed them on the system. That is just one example of many out there. I worked with devlopers and had deal with Steam and I know what they did. Steam/Valve are not angels. They screw developers they don't like all the time.
Protektor 6 May
Quoting: Interknet
Quoting: s8as8aFor what it's worth, the 30% (or any percentage) cut doesn't seem bad to me (even if they didn't "give back" anything to the community, but in our case, they do, and a lot). What does seem bad to me is the "clauses Valve have that prevent developers selling at cheaper prices on other stores" (because that improperly reduces competition among stores, and that likely is the point).

That sounds like a myth honestly. I'm sure I've seen games available elsewhere for less many times.

That is absolutely not a myth. I have seen the contract that you must sign with Valve to be on Steam. It is ABSOLUTELY part of the agreement and Valve is selective about enforcing it. But it not a myth. I have also talked with many developers who can attest to that.
Protektor 6 May
Quoting: kuhpunkt
Quoting: TheRiddickYeah %30 is pretty high for a DIGITAL GOODs based store. Who knows if Valve will change this policy. It does hurt indie devs the most who can't achieve high sales numbers to get discounted 'valve tax rate'.

Why is it always "this is against Indies"? Valheim is a small indie title and sold bonkers numbers. Avengers is a AAA blockbuster with a HUGE name behind it (the biggest running movie franchise!) and it bombed hard.

Valve wants to sell games. Why should they make a difference between AAA and Indie? Money is money.

That is a bullshit argument and absolutely does not look at the sales that Avengers still made given it's massive marketing and budget. It made 100x what most indie games will ever hope to achieve. Avengers failed based on the expected goals and what they spent on development and promotion, but it still made a ton of cash regardless. It just didn't make what everyone expected.


Last edited by Protektor on 6 May 2021 at 2:25 am UTC
Protektor 6 May
Quoting: TheRiddickI find it hilarious people are comparing digital copies of games to physical goods in the retail markets like its Apples to Apples comparison. Its just not, too many people clueless about software development and cost/time associated.

I find it hilarious that you think just because something is digital that is somehow special and different and shouldn't be treated exact the same as physical goods for consumer rights and protects and cost regulation. Hell we don't even enforce fitness of service and use like we do for everything else that is sold to the public. Imagine if you sold every car with a license and contract and made the buyer sign a contract that said...well this is suppose to be a car but it might not work, it might blow up, in fact we can't even really guarantee that it's a car that runs, but you must agree to this and hold us totally immune and no liability if it blows up or breaks don't work or anything else including killing you. No one would put up with it, so why do should we put up with it for digital goods?


Last edited by Protektor on 6 May 2021 at 2:26 am UTC
Protektor 6 May
Quoting: PublicNuisance
Quoting: tonR
Quoting: PublicNuisanceThe reality is that gamers are as much to blame as Valve. Take Wolfire for instance, they sell their games on Steam but also Itch.io and Humble Store. If a gamer wanted to give them maximum profit Itch.io would probably be the best bet as Itch.io allows developers to set what revenue goes to Itch and what they keep. The option is there but the issue is that most gamers prefer to buy from Steam to keep their games in one library. In other words they should be as mad at gamers as they are at Valve as gamers choose where to buy their games. Of course getting mad at your customer and suing them doesn't play so well from a PR standpoint. Just to make clear, i'm not saying they should sue gamers or even be mad at them but it makes as much sense (or as little) as being mad at Valve. I for one try to buy from Itch.io and GOG as I prefer to support those businesses that give me a DRM free product and support open source (in Itch's case not GOG). I'm the minority though, most gamers don't care. They just want their games and don't care about ideology or business practices. As long as that is true then Valve will remain king and no lawsuit will change that.
Totally disagree with your statement that I bolded.
Here the thing. Why most gamers especially in developing/emerging countries (which includes me) choose Steam because of one thing: Convenience

I can buy Steam wallet code anywhere! 7-Eleven, Tesco (now called Lotus as Thai company bought it), some mom-and-pop shops, telcos and even a bank! (Maybank Malaysia link). Some country such as India also have Cash on Delivery option.

So, Why should we get blame for choosing a company that offers better service to us. The one who willingly takes extra mile to reach us the gamers, as their customers. Don't mad at us for exercising our consumerism.

Without extra mile that Valve took, piracy will be rampaging again. Just like the old times. As Gaben said:
Piracy is an issue of service, not price

Apologies. Just share our sentiment (and some facts) here. And I do bought some games on itch.io if possible too.

I feel like you may have missed where I said

"Just to make clear, i'm not saying they should sue gamers or even be mad at them but it makes as much sense (or as little) as being mad at Valve."

I don't see being mad at Valve as being productive, i'm simply saying that if one were to want to be mad at someone that being mad at gamers makes as much sense as they are the ones choosing where to shop.

If you are manipulating the market to force lock-in to your store like Valve has done for years then yes they need to be taken down and forced to play by different rules than everyone else because they intentionally manipulated the market. They didn't make a better product to take the market they manipulated to take over. Giving a way keys was exactly a way to lock up the market. A new store just getting started can't give away keys because they don't have the size and scale to absorb the loses like Valve has done. Valve knew this and this is exactly why they did it. It was a cheap way to lock users in to their store and it worked once they were large enough to absorb the losses. Valve did NOT do this in the beginning. It wasn't until they got very large that they started doing this as a way to shut out other stores, lock users in to their store, and cheap way to capture new customers. If you can capture a new customer for $5-10 worth of bandwidth and storage then that is way the hell cheaper than advertising to capture new customers. Ask yourself why Valve has never advertised their store and how they built up their user based to this large. It wasn't because they were first. It was the choices they made to capture new users cheaply.
kuhpunkt 6 May
Quoting: Protektor
Quoting: kuhpunkt
Quoting: TheRiddickYeah %30 is pretty high for a DIGITAL GOODs based store. Who knows if Valve will change this policy. It does hurt indie devs the most who can't achieve high sales numbers to get discounted 'valve tax rate'.

Why is it always "this is against Indies"? Valheim is a small indie title and sold bonkers numbers. Avengers is a AAA blockbuster with a HUGE name behind it (the biggest running movie franchise!) and it bombed hard.

Valve wants to sell games. Why should they make a difference between AAA and Indie? Money is money.

That is a bullshit argument and absolutely does not look at the sales that Avengers still made given it's massive marketing and budget. It made 100x what most indie games will ever hope to achieve. Avengers failed based on the expected goals and what they spent on development and promotion, but it still made a ton of cash regardless. It just didn't make what everyone expected.

https://www.pcgamer.com/square-enix-reports-losses-following-release-of-underperforming-marvels-avengers/
Quoting: ProtektorI find it hilarious that you think just because something is digital that is somehow special and different
But it is. The cost of a copy approaching zero makes a fundamental difference. When it comes to physical goods, scarcity is real and costs are based (more or less) on cost of production. When it comes to digital goods, costs are arbitrary and scarcity is entirely a social construct which we have created because we don't understand how to do any other models and anyway we fear trying other models would undermine the status quo.
denyasis 7 May
That's an interesting point, although I think looking at only the cost of duplication might be a little narrow. There's the cost of development. I think, to some extent, this isn't dissimilar to other industries like other media production (wasn't always digital), or R&D.

I would reckon there have always been some industries where production isn't nearly as expensive as the development. I think digital just exaggerates this ratio; although does not eliminate it.

Quoting: ProtektorI worked in the business and I can absolutely tell you that Steam sold ads on their home page because I have had developers tell me they did and ask if the gaming store I worked for did the same and we did not

Very interesting. Thank you for sharing. To be honest. I always assumed similar practice for the big online stores in general like Humble, Epic, and GOG (thier self promotion of CP2077 is bordering on ludicrous, lol)

Quoting: TheRiddickI find it hilarious people are comparing digital copies of games to physical goods in the retail markets like its Apples to Apples comparison. Its just not, too many people clueless about software development and cost/time associated.

That's a really good point. I'm definitely both a culprit and a victim of the "Hey. It should be easy to program ..." in my job and I'm not even a programmer! I can only imagine what real programmers have to put with.
Quoting: denyasisThat's an interesting point, although I think looking at only the cost of duplication might be a little narrow. There's the cost of development. I think, to some extent, this isn't dissimilar to other industries like other media production (wasn't always digital), or R&D.
Oh, I'm not saying that costs don't exist. But the thing is that there's a fundamental mismatch between a cost structure that is almost entirely up front as a sort of single thing, and a revenue structure that is based on price per copy sold, which in one direction or another is likely to bear no resemblance to the costs. Ideally, you'd want some kind of arrangement where proven game developers could be just paid a solid wage to develop games, and then everyone would have the right to download copies of the results for free or some minimal downloading charge. But that would be hard to arrange within the existing structure of markets.

Quoting: denyasisI would reckon there have always been some industries where production isn't nearly as expensive as the development. I think digital just exaggerates this ratio; although does not eliminate it.
The pharmaceutical industry comes fairly close. There are large up-front costs to developing new drugs. As compensation, companies are given a monopoly (patent) on drugs which they invented did the clinical trials for, and charge orders of magnitude more than the cost of production. The resulting compensation tends to be wildly out of proportion to the costs of development--but also, that mismatch between fixed development cost and per-unit revenue leads to perverse incentives. Companies gain hugely if by any means they can sell more units of a given drug rather than start over with a new drug; hence they tend to aggressively push to expand what a drug can be prescribed for whether it's appropriate or not, tend to spin the data to discount dangerous side effects, and pull various tricks to extend the life of their patents. Not to mention the genesis of the opioid crisis. If the drug companies were instead paid lump sums for the drug development, but then were not awarded a monopoly but had to compete, the prices of drugs would fall towards the price of production, and drug companies would gain little from misrepresenting a given drug's capabilities, arranging for it to be prescribed inappropriately, and so on.


Last edited by Purple Library Guy on 7 May 2021 at 8:16 am UTC
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