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.
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Quoting: x_wingBut mostly, I can see that Valve invest their profit in the gaming marketWrong, 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
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Quoting: TheSHEEEPQuoting: x_wingBut mostly, I can see that Valve invest their profit in the gaming marketWrong, 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.
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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?
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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.
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Quoting: TheSHEEEPQuoting: 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.
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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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Quoting: x_wingHow 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.You are mixing different points here. We're talking about the store cut of 12%. With that low cut, Epic still nets a profit:
https://twitter.com/TimSweeneyEpic/status/1120441795010338816
Of course, if you also take all the other measures into account - the exclusivity deals and the free games - then yeah, I'm fully with you they most likely run at a net loss right now.
But those other growth measures are not the topic of discussion here.
Quoting: x_wing"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).I did list some of the numbers you CAN get despite Valve not being a public company. It isn't totally precise, but there's no way it is entirely off, either. If you wanna do the math, be my guest. I did that ~2 years ago when EGS first entered the picture and it turned out that Epic is very much right on this one.
And the last two years only saw more growth and profit for Valve, so I don't see any reason to assume much has changed in this regard.
Quoting: x_wingRegarding "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).Is this the part where you pretend something didn't happen because you didn't see it happen?
Honestly, just set your search engine to present you results from before 2017 or so and look for discussions about the store owner cut. You'll find quite a few, and absolutely not only about Steam, but also about mobile app stores, consoles, etc.
Your claim was that Epic "created" this narrative in some kind of FUD approach. And that is just provably false.
What Epic did was bring this to way more people's attention, which is a service in itself and if that discussion is the only thing that remains of Epic's efforts, it'll still be at least something good.
Now, did they push this point in an attempt to discredit others and get people on their store? Probably. I couldn't care less about intentions. I care about results.
Quoting: x_wingYou'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.Knowledge is often mistaken for arrogance by those who don't possess it, especially if it isn't sugarcoated, so I'll take that compliment, thank you.
Just because you don't understand where the numbers are coming from, doesn't mean I created them out of thin air. I think I dropped enough keywords by now for anyone to do their own research and I am under no obligation to hand you my own research and do the thinking for you. Nor do I care if you believe me or not, so I'm really not willing to go that extra mile.
Quoting: x_wingNot 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.Seriously doubt that I ever made such an attempt. I said that some developers might decide to lower their prices due to the lower cut, but most won't.
So for customers, not much of an improvement.
But honestly, customers are cared for pretty well already. Games are cheap, too cheap IMO but that's a different topic altogether. It's the indie/small devs that struggle the most, and that is my perspective, too, so that's what I'm most concerned about.
Quoting: kuhpunktHow do you know that they already offer lower cuts to large publishers/developers?https://www.theverge.com/2018/11/30/18120577/valve-steam-game-marketplace-revenue-split-new-rules-competition
Just as the most recent example. That isn't specific to large devs, of course, but I hope you can see how that benefits those the most.
The deals between Steam and large publishers beyond that are more of an open secret, but you won't find many articles about it. Contracts not being disclosed and all that.
Quoting: kuhpunktgog broke down their costs running the store any say said that running their store costs about 20% and 10% is actual profit for them.If that is true - and I have my doubt here - it would tell you two things:
1.) They suck at running at their business. Epic can run their store at about 5-8% and the rest is profit, but GOG requires three times that much? Something is very wrong here.
2.) 10% profit is already absolutely crazy as any investor will gladly tell you. Do you know how much profit normal, non-digital stores (e.g. supermarkets, electronic markets, etc.) make from products they sell? 1-3%.
But honestly, I think this might just be throwing different things together, not all actually related to the store itself. Or their sales numbers are much lower than I ever expected.
Quoting: kuhpunktHow do you know it's a way too big cut? What cut would be appropriate?My suggestion would be to not have one-cut-fits-all, but a minimal cut, say 10-15%.
And then developers can add packages on top. Want a forum with it? +1%. Want multiplayer servers/matchmaking, etc.?+1-4% Other stuff? +1% each.
You get the idea.
This might actually end up with something close to 30% in the end for the premium package, but it's a fact that most developers don't even need half the services Steam supposedly takes such a large chunk for.
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Quoting: TheSHEEEPQuoting: kuhpunktHow do you know that they already offer lower cuts to large publishers/developers?https://www.theverge.com/2018/11/30/18120577/valve-steam-game-marketplace-revenue-split-new-rules-competition
Just as the most recent example. That isn't specific to large devs, of course, but I hope you can see how that benefits those the most.
That is not what you claimed. You said that Valve makes deals with big publishers so that the 20/25/30% cut rule doesn't apply. This applies to everybody.
Quoting: TheSHEEEPThe deals between Steam and large publishers beyond that are more of an open secret, but you won't find many articles about it. Contracts not being disclosed and all that.
So you make baseless claims and just say that this is an open secret. Who does this apply to? Why doesn't this apply to CD Projekt Red, a big money maker for Steam?
Quoting: TheSHEEEPQuoting: kuhpunktgog broke down their costs running the store any say said that running their store costs about 20% and 10% is actual profit for them.If that is true - and I have my doubt here - it would tell you two things:
1.) They suck at running at their business. Epic can run their store at about 5-8% and the rest is profit, but GOG requires three times that much? Something is very wrong here.
2.) 10% profit is already absolutely crazy as any investor will gladly tell you. Do you know how much profit normal, non-digital stores (e.g. supermarkets, electronic markets, etc.) make from products they sell? 1-3%.
It's what they said. You don't know if Epic can run their store at 5-8%... you have no insight into the costs.
Quoting: TheSHEEEPBut honestly, I think this might just be throwing different things together, not all actually related to the store itself. Or their sales numbers are much lower than I ever expected.
Of course they sell much less than Steam, but that's at least still some actual data.
Quoting: kuhpunktHow do you know it's a way too big cut? What cut would be appropriate?My suggestion would be to not have one-cut-fits-all, but a minimal cut, say 10-15%.
And then developers can add packages on top. Want a forum with it? +1%. Want multiplayer servers/matchmaking, etc.?+1-4% Other stuff? +1% each.
You get the idea.
This might actually end up with something close to 30% in the end for the premium package, but it's a fact that most developers don't even need half the services Steam supposedly takes such a large chunk for.[/quote]
That's not what I asked.
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Quoting: kuhpunktThat is not what you claimed. You said that Valve makes deals with big publishers so that the 20/25/30% cut rule doesn't apply. This applies to everybody.So you do not see how this is just a veiled deal with all big publishers as those are the only ones (bar a few indie successes maybe?) who can even fulfill it?
The goal with this was - and it was successful, too - to get big publishers to come back to Steam instead of running their own exclusive stores which they started doing prior to this. There was this period of a year or so (not entirely sure how long it was) where for example EA did not release anything big on Steam.
Quoting: kuhpunktSo you make baseless claims and just say that this is an open secret.It is very obvious from this comment and most of your others that you do not work in the industry or even close to it.
I cannot show you any definite proof of this as that would be a rather stupid thing to do in my position and some of the people I work with.
Believe me or not - it's your choice, but I think we all know you're going to go with the choice that fits into your narrative.
Quoting: kuhpunktWho does this apply to? Why doesn't this apply to CD Projekt Red, a big money maker for Steam?Hmmm... why would Valve not cut deals with their direct competitors at GOG?
Yeah, no idea. It is a mystery of which only the brightest detectives would be worthy.
Quoting: kuhpunktIt's what they said. You don't know if Epic can run their store at 5-8%... you have no insight into the costs.
Quoting: kuhpunktOf course they sell much less than Steam, but that's at least still some actual data.Ah, so if Epic (well, the person who runs it, anyway) gives you some numbers, that must be a lie.
But if GOG gives you some numbers, that must be true.
I truly hope that you can see the problem in your perception here.
Quoting: kuhpunktYou asked what cut would be appropriate. How my answer is not what you asked remains your secret so far.Quoting: kuhpunktHow do you know it's a way too big cut? What cut would be appropriate?Quoting: thesheeepMy suggestion would be to not have one-cut-fits-all, but a minimal cut, say 10-15%.That's not what I asked.
And then developers can add packages on top. Want a forum with it? +1%. Want multiplayer servers/matchmaking, etc.?+1-4% Other stuff? +1% each.
You get the idea.
This might actually end up with something close to 30% in the end for the premium package, but it's a fact that most developers don't even need half the services Steam supposedly takes such a large chunk for.
You also asked how I know it's a way too big cut - I already answered that, multiple times over. You just chose to either ignore it or not believe me. Not much more I can do for you there. I'm not in the habit of repeating myself.
Last edited by TheSHEEEP on 8 February 2021 at 10:33 am UTC
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Quoting: TheSHEEEPQuoting: kuhpunktThat is not what you claimed. You said that Valve makes deals with big publishers so that the 20/25/30% cut rule doesn't apply. This applies to everybody.So you do not see how this is just a veiled deal with all big publishers as those are the only ones (bar a few indie successes maybe?) who can even fulfill it?
The goal with this was - and it was successful, too - to get big publishers to come back to Steam instead of running their own exclusive stores which they started doing prior to this. There was this period of a year or so (not entirely sure how long it was) where for example EA did not release anything big on Steam.
This is not the argument you made. You are disingenuous.
Quoting: TheSHEEEPQuoting: kuhpunktSo you make baseless claims and just say that this is an open secret.It is very obvious from this comment and most of your others that you do not work in the industry or even close to it.
I cannot show you any definite proof of this as that would be a rather stupid thing to do in my position and some of the people I work with.
Believe me or not - it's your choice, but I think we all know you're going to go with the choice that fits into your narrative.
So you can't offer any proof. And I'm the one who has a narrative?
Quoting: TheSHEEEPQuoting: kuhpunktWho does this apply to? Why doesn't this apply to CD Projekt Red, a big money maker for Steam?Hmmm... why would Valve not cut deals with their direct competitors at GOG?
Yeah, no idea. It is a mystery of which only the brightest detectives would be worthy.
That's no argument. gog is barely a direct competitor and why would that play a role?
Quoting: TheSHEEEPQuoting: kuhpunktIt's what they said. You don't know if Epic can run their store at 5-8%... you have no insight into the costs.Quoting: kuhpunktOf course they sell much less than Steam, but that's at least still some actual data.Ah, so if Epic (well, the person who runs it, anyway) gives you some numbers, that must be a lie.
But if GOG gives you some numbers, that must be true.
I truly hope that you can see the problem in your perception here.
I didn't say it was a lie. And I'm the one with a problem in my perception?
Quoting: TheSHEEEPQuoting: kuhpunktYou asked what cut would be appropriate. How my answer is not what you asked remains your secret so far.Quoting: kuhpunktHow do you know it's a way too big cut? What cut would be appropriate?Quoting: thesheeepMy suggestion would be to not have one-cut-fits-all, but a minimal cut, say 10-15%.That's not what I asked.
And then developers can add packages on top. Want a forum with it? +1%. Want multiplayer servers/matchmaking, etc.?+1-4% Other stuff? +1% each.
You get the idea.
This might actually end up with something close to 30% in the end for the premium package, but it's a fact that most developers don't even need half the services Steam supposedly takes such a large chunk for.
You also asked how I know it's a way too big cut - I already answered that, multiple times over. You just chose to either ignore it or not believe me. Not much more I can do for you there. I'm not in the habit of repeating myself.
Yes, I asked what would be appropriate and you didn't offer a proper answer. You threw out a random number without a reason. I could just do the same and say that Steam deserves 49% and keep the explanation to myself. That wouldn't help either.
Last edited by kuhpunkt on 8 February 2021 at 12:02 pm UTC
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