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In the ongoing saga of the Wolfire versus Valve lawsuit, which is continuing, we've been able to see a funny little look behind the curtain and Tim Sweeney was not happy with Valve.

Thanks to the work from Simon Carless of GameDiscoverCo which has a great round-up of what's going on (definitely worth a read for some backstory here), we've managed to see some emails between Epic's Tim Sweeney to Valve's Gabe Newell and Scott Lynch.

Back in 2017 an email from Newell to Sweeney asked "Anything we doing to annoy you? We’re guessing Sean Jenkins public dumbness might be part of it.", which is in reference to a leaked post where a Valve's Jenkins talked about restricting Steam keys. Sweeney replied to mention they've "never heard of Sean Jenkins" and then goes off talking about the 30% platform fee Valve charges and how it's "no longer justifiable" but there was a "good case for them in the early days" but due to scale costs "have been driven down".

Sweeney's point here is that Valve make a lot of money from that 30% cut and goes on to say "If you subtract out the top 25 games on Steam, I bet Valve made more profit from most of the next 1000 than the developer themselves made" and complains that when you add together Valve's cut, marketing and so on that the cut for developers is small.

After that we don't see anything until November 2018 in the documents where Sweeney emailed Newell again and also Valve's Erik Johnson, notifying Valve about the plans to announce the Epic Games Store with their lower cut of sales from developers. Sweeney also mentions here about their issues with Apple, and how Sweeney wants Apple to open up, and hopes that Valve would make a "timely move" to change their rates taken from developers. Sweeney also notes the opposite, hoping Valve don't have any "unannounced revenue-sharing changes that favored big publishers over indies" as it would basically tell the likes of Apple that they "can keep their closed platforms and just pay off big publishers to stay silent".

It was only a few days later (quite cheekily then), that Valve suddenly publicly announced their plan to reduce their take for the top-selling Steam games. Naturally, this annoyed Sweeney rather a lot, as the next email confirmed the Epic Games Store announcement was going live the next day and Sweeney says to Valve "Right now, you assholes are telling the world that the strong and powerful get special terms, while 30% is for the little people. We're all in for a prolonged battle if Apple tries to keep their monopoly and 30% by cutting backroom deals with big publishers to keep them quiet. Why not give ALL developers a better deal? What better way is there to convince Apple quickly that their model is now totally untenable?".

The only reply to this we can see was from Valve COO (Chief Operating Officer) Scott Lynch sent internally at Valve to Johnson and Newell that simply says "You mad bro?".

You can only imagine how truly mad Sweeney would be if they saw that with Valve just basically laughing it off completely. Well, Sweeney can see it now.

As we know from Valve when they released their 2023 yearly report, they're continuing to print money and repeatedly break user records and so the Epic Games Store hasn't seemingly made much of a dent at all. While Epic Games continue to try to pull developers over to their store with various exclusivity deals and constant weekly free games.

Update note: Clarified the "You mad bro?" email was internal at Valve, not to Sweeney directly.

Article taken from GamingOnLinux.com.
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Quoting: F.Ultra
Quoting: pleasereadthemanual
QuoteSweeney's point here is that Valve make a lot of money from that 30% cut and goes on to say "If you subtract out the top 25 games on Steam, I bet Valve made more profit from most of the next 1000 than the developer themselves made" and complains that when you add together Valve's cut, marketing and so on that the cut for developers is small.
So his first argument is that Valve is making more money from the games that sell really well than the publisher themselves.

Valve almost immediately reduces their cut of games that sell really well:

QuoteIt was only a few days later (quite cheekily then), that Valve suddenly publicly announced their plan to reduce their take for the top-selling Steam games.
And then Tim Sweeney complains about Valve not doing it for everyone and only the big publishers benefit (that isn't necessarily true; small developers occasionally ship hits).

If Valve reduced their cut for everyone, what would his next argument be?

I'm trying to take Tim Sweeney's side here because it's true that Valve has a near-monopoly on PC games (I wish they had a monopoly on Japanese VNs too) and monopoly power should not exist, but these arguments don't seem to be coming from a place where I can assume good faith.

What I find even more absurd is that it to me sounds like he actually is quite ok with Valve taking 30% but is having more of a problem with Apple doing it and wants Valve to lower their commission to thus somehow force Apple to lower theirs as well.
I could probably make an argument that Valve does deserve 30% but Apple do not. After all, one thing that's been pointed out repeatedly in this thread is that Valve does a lot more than be a store--they got all these features, community, support for modding, yadda yadda, and the claim many of us have made is that it's this extra stuff that makes Valve worth the 30%. I don't think Apple does any of that stuff, so it would follow they're not worth the 30%.
s01itude Mar 15
I'm not going to sit here and say I full heartedly support valve, since steam is DRM after all and quite frankly the client has been pretty crap on linux the past year or so, but if Sweeny thinks he's got the support of gamers or indie-devs he's pretty delusional.

He can complain about the 30% cut all he wants, but despite all his efforts the epic game store has been a flop and a half. Maybe if he wasn't a prick and didn't have the horrible hot-take stances he tends to and didn't make idiotic decisions like pulling their own (older) games off their own store then people would like him more. At the end of the day people are willing to put up with the drm of steam because of all the features and services valve offers in return, and on the dev side people are willing to put up with the 30% cut because of the large customer base valve offers in return; EGS doesn't offer enough value to make spending money on it worthwhile.
F.Ultra Mar 15
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Quoting: Purple Library Guy
Quoting: F.Ultra
Quoting: pleasereadthemanual
QuoteSweeney's point here is that Valve make a lot of money from that 30% cut and goes on to say "If you subtract out the top 25 games on Steam, I bet Valve made more profit from most of the next 1000 than the developer themselves made" and complains that when you add together Valve's cut, marketing and so on that the cut for developers is small.
So his first argument is that Valve is making more money from the games that sell really well than the publisher themselves.

Valve almost immediately reduces their cut of games that sell really well:

QuoteIt was only a few days later (quite cheekily then), that Valve suddenly publicly announced their plan to reduce their take for the top-selling Steam games.
And then Tim Sweeney complains about Valve not doing it for everyone and only the big publishers benefit (that isn't necessarily true; small developers occasionally ship hits).

If Valve reduced their cut for everyone, what would his next argument be?

I'm trying to take Tim Sweeney's side here because it's true that Valve has a near-monopoly on PC games (I wish they had a monopoly on Japanese VNs too) and monopoly power should not exist, but these arguments don't seem to be coming from a place where I can assume good faith.

What I find even more absurd is that it to me sounds like he actually is quite ok with Valve taking 30% but is having more of a problem with Apple doing it and wants Valve to lower their commission to thus somehow force Apple to lower theirs as well.
I could probably make an argument that Valve does deserve 30% but Apple do not. After all, one thing that's been pointed out repeatedly in this thread is that Valve does a lot more than be a store--they got all these features, community, support for modding, yadda yadda, and the claim many of us have made is that it's this extra stuff that makes Valve worth the 30%. I don't think Apple does any of that stuff, so it would follow they're not worth the 30%.

That I think we all can agree, not sure I follow in Tim:s reasoning that it's up to Valve to change the cut so Apple might be forced to follow (why they now would be forced, I mean there is no law on what cut you can take and Apple have full monopoly on the iPhone app market).

Quoting: CatKiller
Quoting: F.UltraAlso not sure how Valve who gets 30% could make more money than the devs that gets the remaining 70% as he claims (and even if we include the typical publisher who:s average cut is 10%-20%, the devs should still get > 30%).
His claim isn't about revenue, but about profit: specifically, that for "most" of the 26 - 1,025 top selling games, (30% - taxes - cost of doing Steam things) is greater than (70% - publisher cut - taxes - cost of doing game-making things). Which is still a pretty incoherent claim (it makes zero difference to anything whether the claim is true or whether the claim is false), and Valve don't take 30% off the biggest games any more anyway.

True that he talked about profits and the devs have quite an investment to pay off before they make a profit, and I guess that it's my non-US perspective that didn't consider that companies over there pay less taxes than a small dev team.


Last edited by F.Ultra on 15 March 2024 at 8:49 pm UTC
s01itude Mar 15
Quoting: ElectricPrismI legit think that there are entities that are just mad that Valve is not a public traded company and can't be easily corrupted or remotely influenced/controlled.

We learned this week from Sweet Baby Inc being kicked off Steam for extortion and subsequent GlowFeds going after Valve for it that there are powers who are angry and want to dictate what games you get to play. I wouldn't mid a article or two sourcing these events in a factual fashion.

Absolutely agree with this. IMO the single biggest issue with the "AAA" gaming industry is that they are all publicly traded companies which has drastically shifted everything about the companies. From getting too involved in playing politics to the way they do business and how they treat their employees, these old giants of the gaming industry are nothing like the companies they used to be. May they all die a deserved death.
pilk Mar 15
Here, have a multi-paragraph ramble about Epic.

I have trouble believing Epic and Tim Sweeney give even one iota of a shit about the little guy, given his track record supporting non-Windows PC gaming. Epic took their game off macOS, a platform where you aren't limited by the App Store like iOS is, for petty reasons. Now, all macOS users that used to be able to play Fortnite just fine can only play a neutered version from three and a half years ago. They told a chunk of their audience, people who might have sunk money into Fortnite back in the day, to piss off.
I think the only reason they talk about lower cuts is because Fortnite made a boatload of money, but Timmy wants more. If Fortnite didn't explode in popularity, Epic wouldn't care. Epic's self-proclaimed "champion of the little guy" title is laughable.

And another thing, pretty much everyone who plays games on PC, myself included, hate using Epic's store, because EGS is just a straight-up horrible service. I have to go play some game, and it's on a completely different and much worse service all my other games are on. The interface is so sluggish, it makes the Wii U on launch day blush (and at least the Wii U had an excuse). The only user feedback you can give is a random question about Fortnite every now and then.
I pretty much only use EGS when I need to, and to freeload and promptly forget about whatever game they're giving away.
It kind of reminds me of Origin back in the day, an annoying, unneccesary service I only used to grab its free games.

All that being said though, I'm not really that big of a fan of Steam, but it typically does things right and that's where I'll buy most games. I'll buy games from other storefronts, like Itch and GOG, but I make a point to never purchase a game through Epic. I would rather just wait for it to come out on a platform I actually want to use.

If Steam did reduce their cuts across the board, it'd be nice. Epic doesn't genuinely care about that from what I see of them, though.


Last edited by pilk on 15 March 2024 at 9:15 pm UTC
CatKiller Mar 15
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Quoting: F.UltraThat I think we all can agree, not sure I follow in Tim:s reasoning that it's up to Valve to change the cut so Apple might be forced to follow (why they now would be forced, I mean there is no law on what cut you can take and Apple have full monopoly on the iPhone app market).
Epic doesn't care about "30%". At all.

Sweeney said that if Apple had given Epic special favourable terms that left everyone else in the lurch, they'd have taken it.

What they are bothered by is Apple's control of Apple's platform, so that when, say, legislators in a country say "you've got to take these applications off your platform" then Apple can. And have. For Epic's applications.

What they wanted was for the other platform controllers to collude to drop prices so that Apple would be standing alone & vulnerable when Epic sent the regulators knocking on Apple's door. Humble went along with it, and it's pretty much killed their business. Microsoft went along with it (but only for Windows, not Xbox) because they really want the Windows Store on iOS and Android. They didn't disturb Sony because Epic is so reliant on PlayStation Fortnite money. Google wouldn't go along with it. And Valve wouldn't go along with it, so Epic decided to use their Fortnite money to open their own store to (fail to) compete with Steam.
I will say this:

The antitrust lawsuits against Apple and Google can only help in limiting the duopoly on mobile and making the experience better for both Android and iOS users. Especially iOS users.
F.Ultra Mar 16
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Quoting: CatKiller
Quoting: F.UltraThat I think we all can agree, not sure I follow in Tim:s reasoning that it's up to Valve to change the cut so Apple might be forced to follow (why they now would be forced, I mean there is no law on what cut you can take and Apple have full monopoly on the iPhone app market).
Epic doesn't care about "30%". At all.

Sweeney said that if Apple had given Epic special favourable terms that left everyone else in the lurch, they'd have taken it.

What they are bothered by is Apple's control of Apple's platform, so that when, say, legislators in a country say "you've got to take these applications off your platform" then Apple can. And have. For Epic's applications.

What they wanted was for the other platform controllers to collude to drop prices so that Apple would be standing alone & vulnerable when Epic sent the regulators knocking on Apple's door. Humble went along with it, and it's pretty much killed their business. Microsoft went along with it (but only for Windows, not Xbox) because they really want the Windows Store on iOS and Android. They didn't disturb Sony because Epic is so reliant on PlayStation Fortnite money. Google wouldn't go along with it. And Valve wouldn't go along with it, so Epic decided to use their Fortnite money to open their own store to (fail to) compete with Steam.

ah, that makes so much more sense!
s01itude Mar 16
Quoting: pleasereadthemanualI will say this:

The antitrust lawsuits against Apple and Google can only help in limiting the duopoly on mobile and making the experience better for both Android and iOS users. Especially iOS users.

Agreed here. Apple and Google are both pretty horrible on all the things they do to control their respective platform/monopoly.
The duopoly is clearly secured when you try to find any sort of alternative; linux on mobile (outside of android) is basically a joke at best at this point, and realistically the best de-googled option of android is grapheneos which is only developed for google's devices.
And android is the "open" platform of the two.
tuubi Mar 16
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Quoting: s01itudelinux on mobile (outside of android) is basically a joke at best at this point
That's a bit harsh. I've been happy with Sailfish OS on my phones for years, and the wife isn't complaining either. If you're into mobile gaming or something, sure, it's not a realistic option, but it's certainly not a joke for those of us with simpler needs.
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