Valve abusing the market power of Steam on game pricing according to a lawsuit

Quoting: kuhpunktThis is not the argument you made. You are disingenuous.

My argument was that Steam already offers lower cuts to big publishers - which it does, publicly visible to anyone via that 30/25/20 system.
That this theoretically counts for everyone is besides the point as only the big ones can even make use of it.

My argument was also that Steam had specific deals with big publishers that are not disclosed to the public.
Which is, as I said, an open secret in the industry.

Now, what I don't know for certain is if both are active at the same time for how many publishers. I'm not THAT close to the source anymore.
That staggered system is relatively new (2018) and it might have replaced some of the older deals with big publishers.

Quoting: kuhpunktSo you can't offer any proof. And I'm the one who has a narrative?

I don't have a narrative - I don't care about painting Valve in any light - positive or negative. As I said, I am neutral.
I only have what I know due to what I've seen from working close to the industry as well as my own knowledge about digital infrastructures and its cost, which is the truth.
If you believe it or not is - as I said - up to you.
But if all you're going to parrot from now on is just "I don't believe you", you should probably not bother as I think that much has become clear from your side.

Quoting: kuhpunktI didn't say it was a lie. And I'm the one with a problem in my perception?

Please tell me how else you could interpret this:

Quote(About the Epic numbers)You don't know if Epic can run their store at 5-8%... you have no insight into the costs.
(About the GOG numbers)Of course they sell much less than Steam, but that's at least still some actual data.

To me that sounds as if the Epic numbers are not "actual" data to you i.e. they are a lie.
And btw: I don't need to have insights into Epic's costs if they are nice enough to give me these numbers on Twitter of all places.

Quoting: kuhpunktYes, 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.

I answered the question "What cut would be appropriate?". The answer to that question is a number. I gave you a number and an idea for a calculation of it with what I think would be appropriate.
My hint for future discussions for you: Be precise. Don't expect people to read your mind. My telepathy only works within 3m eyesight.

If you really wanted to get a full calculation of WHY exactly that cut is appropriate (which is not the question that you asked): I already anwered that.
Do the math yourself, all the numbers are out there in good enough estimations (partly very precise) to end up with something in a +/- 5% range.
I'm not here to be your convenience business and maths consultant and what you're asking is a full approximate rundown of maintaining a storefront like Steam. The last time I did this calculation (about two years ago, as I said), it took almost a day - and yes, I should have saved it but didn't. Trust me, I begin to regret that right now.
But that doesn't mean I'll do it again just to convince some random users on a website.


Last edited by TheSHEEEP on 8 February 2021 at 1:01 pm UTC

Quoting: TheSHEEEPMy argument was that Steam already offers lower cuts to big publishers - which it does, publicly visible to anyone via that 30/25/20 system.
That this theoretically counts for everyone is besides the point as only the big ones can even make use of it.

It doesn't THEORETICALLY count for everyone. It counts practically for everyone. That only big ones can make use of it, is a) not true and b) not relevant.

Quoting: TheSHEEEPMy argument was also that Steam had specific deals with big publishers that are not disclosed to the public.
Which is, as I said, an open secret in the industry.

You repeat that over and over again with no proof. If those deals were in place, why did so many big publishers leave and create their own stores? Why is there no proof? Stuff leaks all the time. Why would/should Valve make such deals in the first place?

Quoting: TheSHEEEPI don't have a narrative - I don't care about painting Valve in any light - positive or negative. As I said, I am neutral.

Calling others fanboys in this thread here for bringing up simple facts... that's neutral, yeah.

Quoting: TheSHEEEPPlease tell me how else you could interpret this:

Quote(About the Epic numbers)You don't know if Epic can run their store at 5-8%... you have no insight into the costs.
(About the GOG numbers)Of course they sell much less than Steam, but that's at least still some actual data.

To me that sounds as if the Epic numbers are not "actual" data to you i.e. they are a lie.
And btw: I don't need to have insights into Epic's costs if they are nice enough to give me these numbers on Twitter of all places.

There is no need for interpretation. I said what I meant. You don't know the costs for running a store like Steam or EGS or gog.

Quoting: TheSHEEEPDo the math yourself, all the numbers are out there in good enough estimations (partly very precise) to end up with something in a +/- 5% range.

I can't do the math, because I have no insight about the costs and what all the factors are.

Quoting: kuhpunktIt doesn't THEORETICALLY count for everyone. It counts practically for everyone.

True, definitely used that word wrong.

Quoting: kuhpunktThat only big ones can make use of it, is a) not true and b) not relevant.

A) Please point me towards all those indie devs that benefited from that in earning more than 10 million USD or then 50 million... I wonder if that'll even let you count to 10.
B) So a measure that lowers (with maybe a handful of exceptions) only big publishers' cuts is not relevant in an argument about how big publishers already have lower cuts on Steam, proving that Steam can in fact afford to lower the cut? Okay...

Quoting: kuhpunktCalling others fanboys in this thread here for bringing up simple facts... that's neutral, yeah.

Calling a fanboy a fanboy is neutral in itself, it's not like they are hard to identify. You need only look at the extremes they go to try and push back any and all points being made against their darling.
Just like calling a dog a dog or an apple an apple.

Quoting: kuhpunktI can't do the math, because I have no insight about the costs and what all the factors are.

You could, though. It can all be approximated well enough by numbers publicly available, especially because Steam is so large, you'll end up with so high numbers that a few million here and there simply won't make much of a dent.
Average wages in the industry & location, prices on Steam, the cut, user numbers, employee numbers, stats from games themselves, hosting costs, taxes, etc. It's a lot, but it's not rocket science. You'll have a low and a high end when you input lower/higher approximations and in the end you'll know you are getting there when you end up with numbers that make sense.
That's what I did and ended up in the same ballpark as Epic's numbers. Higher, actually, 10-20%.

You might be too lazy to do it - and I'm fully with you on that one, so am I! Once was enough.
But don't claim you can't do something that you could indeed do.


Last edited by TheSHEEEP on 8 February 2021 at 1:55 pm UTC

Quoting: TheSHEEEPYou 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.

Steam features are definitely part of the Store and definitely something that adds as infrastructure cost (you agree with this in your estimations). Whatever estimation Sweeney provides will probably be far from the reality by the simple fact that if they want to compete they must provide similar features, not to mention that the cash flow of their store is still low. So, if you consider that your cost estimations are correct you will agree with me that this type of statements are BS (once again, FUD against Steam).

IMO, Epic is leveraging their position in the market with external investments, whatever they say will mostly end up being propaganda as I'm sure that if we get a balance sheet of EGS we will definitely see a shit-show in those numbers.

Quoting: TheSHEEEPIs 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.

What I pretend is to know who are those that were "mad" against Steam fee before the Epic store release and all the drama they created (I would love to see game devs complains posted before 2017), which is what implied before. And BTW, my problem with your statement is that you used the news media cliche of "people says...". So, if want to bring up something that others mentioned, just name them.

And regarding the FUD, take this lawsuit as example. As was mentioned before, it was presented by users and not developers. Suspicious, doesn't it?

Quoting: TheSHEEEPKnowledge 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.

An arrogant person will always think that they understand something when they don't. Keep that in mind.

Anyway, fortunately you did your research and hopefully, someone will believe on it.


Last edited by x_wing on 8 February 2021 at 11:49 pm UTC

Quoting: Purple Library GuyHuh. Well, I guess if the allegation is true, that Valve's secret contracts involve making developers not sell their games cheaper anywhere else as a condition of being able to sell on Steam, that's kind of anti-competitive in that it stops other stores from trying to gain market share by underselling Steam. And if you foreclose on the whole concept of competition on price, that's likely to be bad for consumers.

Given the high hurdles in US antitrust law, even if the allegation is true that might well not be enough for Valve to actually lose the lawsuit, as noted by EagleDelta etc. But it's still a practice I'd find somewhat annoying--sure, you can understand why they'd want to do it, but then it's easy to understand why any company would do any anti-competitive practice . . . no company wants to be successfully competed against.

Of course if it ain't true then the filers are just assholes. And whether it's true or not, the filers could have questionable motivations and backing.

Anti-competitive means there needs to be harm to consumers (that's a brief legal description) not to competitors. Steam requiring that you keep prices LOWER so that their customers can benefit from LOWER PRICES on other platforms is a plus for consumers. I know it's a plus for me. It means that when I see a sale for a game on another platform, I can go to my platform of choice to get the same price. I win. That's a good thing.

Quoting: Grazen

Quoting: Purple Library GuyHuh. Well, I guess if the allegation is true, that Valve's secret contracts involve making developers not sell their games cheaper anywhere else as a condition of being able to sell on Steam, that's kind of anti-competitive in that it stops other stores from trying to gain market share by underselling Steam. And if you foreclose on the whole concept of competition on price, that's likely to be bad for consumers.

Given the high hurdles in US antitrust law, even if the allegation is true that might well not be enough for Valve to actually lose the lawsuit, as noted by EagleDelta etc. But it's still a practice I'd find somewhat annoying--sure, you can understand why they'd want to do it, but then it's easy to understand why any company would do any anti-competitive practice . . . no company wants to be successfully competed against.

Of course if it ain't true then the filers are just assholes. And whether it's true or not, the filers could have questionable motivations and backing.

Anti-competitive means there needs to be harm to consumers (that's a brief legal description) not to competitors.

Quoting: Merriam-WebsterAnti-competitive: 'tending to reduce or discourage competition'
Anti-consumer: 'not favorable to consumers : improperly favoring the interests of businesses over the interests of consumers'

I think he used the term correctly, and you might be mixing up the two terms.

Quoting: tuubi

Quoting: Merriam-WebsterAnti-competitive: 'tending to reduce or discourage competition'
Anti-consumer: 'not favorable to consumers : improperly favoring the interests of businesses over the interests of consumers'

I think he used the term correctly, and you might be mixing up the two terms.

I agree. Of course, anti-competitive behaviour may be bad for the consumer as well sooner or later, but that's not what's defining the term.

Quoting: Grazen

Quoting: Purple Library GuyHuh. Well, I guess if the allegation is true, that Valve's secret contracts involve making developers not sell their games cheaper anywhere else as a condition of being able to sell on Steam, that's kind of anti-competitive in that it stops other stores from trying to gain market share by underselling Steam. And if you foreclose on the whole concept of competition on price, that's likely to be bad for consumers.

Given the high hurdles in US antitrust law, even if the allegation is true that might well not be enough for Valve to actually lose the lawsuit, as noted by EagleDelta etc. But it's still a practice I'd find somewhat annoying--sure, you can understand why they'd want to do it, but then it's easy to understand why any company would do any anti-competitive practice . . . no company wants to be successfully competed against.

Of course if it ain't true then the filers are just assholes. And whether it's true or not, the filers could have questionable motivations and backing.

Anti-competitive means there needs to be harm to consumers (that's a brief legal description) not to competitors. Steam requiring that you keep prices LOWER so that their customers can benefit from LOWER PRICES on other platforms is a plus for consumers. I know it's a plus for me. It means that when I see a sale for a game on another platform, I can go to my platform of choice to get the same price. I win. That's a good thing.

I think you're mistaken on two levels here. First, on what "anti-competitive" is. Lots of tactics are anti-competitive without being anti-consumer. So for instance, if there are four airlines, one of them has more money than the other three, and so the one starts offering airline tickets at below cost in hopes that it will drive the others out of business before it runs out of money itself, that tactic gives consumers cheap airline tickets, at least in the short term. But it is certainly anti-competitive; it's an attempt to establish a monopoly. It also happens that in the long run it's probably not good for consumers, because that one airline did not start the price war just to return to the status quo prices afterwards--the point is that after there's no competition it can jack prices up and reap far more profits than it lost. Once it has the monopoly, jacking the prices up will not be anti-competitive (there already is no competition), but it will sure as hell be anti-consumer.

Second, on what this policy (if it exists) does. The arrow of causation goes in the opposite direction to what you're saying. It does not mean Steam has to match other platforms' sales (actually, it doesn't seem as if it's alleging that sale prices are involved at all, only the regular price or prices which are "on sale" for so long they are in effect the regular price). If it included sales in the first place, what it would mean is that no other platform could mount a sale unless Steam was doing it first.
More generally, Steam is the big player, the main marketplace. And, it charges a large cut, 30%. If a game publisher wants to make $14 per game, it must charge $20 on Steam. But on Itch.io, say, it could make $14 per game while charging $16, or even less if the publisher wanted to be a jerk to Itch. So normally, platforms that took a smaller cut than Valve does could undersell Steam and potentially gain market share via their lower prices, potentially forcing Steam to in turn lower its cut to compete, lowering game prices across the board.
The kind of agreement alleged would mean the publisher must instead charge at least $20 on Itch and other such platforms. At the immediate level that means you can never get a price break on another platform. I don't see any way in which it reduces prices to consumers, quite the reverse, even in the short term. In the longer term, by making competition on price impossible, it reduces pressure for Valve to reduce their cut, so that would keep prices higher in the longer term.

So yeah, I don't see where you get the idea that such agreements would lower game prices in any way shape or form.

Quoting: Purple Library Guy

Quoting: Grazen

Quoting: Purple Library GuyHuh. Well, I guess if the allegation is true, that Valve's secret contracts involve making developers not sell their games cheaper anywhere else as a condition of being able to sell on Steam, that's kind of anti-competitive in that it stops other stores from trying to gain market share by underselling Steam. And if you foreclose on the whole concept of competition on price, that's likely to be bad for consumers.

Given the high hurdles in US antitrust law, even if the allegation is true that might well not be enough for Valve to actually lose the lawsuit, as noted by EagleDelta etc. But it's still a practice I'd find somewhat annoying--sure, you can understand why they'd want to do it, but then it's easy to understand why any company would do any anti-competitive practice . . . no company wants to be successfully competed against.

Of course if it ain't true then the filers are just assholes. And whether it's true or not, the filers could have questionable motivations and backing.

Anti-competitive means there needs to be harm to consumers (that's a brief legal description) not to competitors. Steam requiring that you keep prices LOWER so that their customers can benefit from LOWER PRICES on other platforms is a plus for consumers. I know it's a plus for me. It means that when I see a sale for a game on another platform, I can go to my platform of choice to get the same price. I win. That's a good thing.

I think you're mistaken on two levels here. First, on what "anti-competitive" is. Lots of tactics are anti-competitive without being anti-consumer. So for instance, if there are four airlines, one of them has more money than the other three, and so the one starts offering airline tickets at below cost in hopes that it will drive the others out of business before it runs out of money itself, that tactic gives consumers cheap airline tickets, at least in the short term. But it is certainly anti-competitive; it's an attempt to establish a monopoly. It also happens that in the long run it's probably not good for consumers, because that one airline did not start the price war just to return to the status quo prices afterwards--the point is that after there's no competition it can jack prices up and reap far more profits than it lost. Once it has the monopoly, jacking the prices up will not be anti-competitive (there already is no competition), but it will sure as hell be anti-consumer.

Second, on what this policy (if it exists) does. The arrow of causation goes in the opposite direction to what you're saying. It does not mean Steam has to match other platforms' sales (actually, it doesn't seem as if it's alleging that sale prices are involved at all, only the regular price or prices which are "on sale" for so long they are in effect the regular price). If it included sales in the first place, what it would mean is that no other platform could mount a sale unless Steam was doing it first.
More generally, Steam is the big player, the main marketplace. And, it charges a large cut, 30%. If a game publisher wants to make $14 per game, it must charge $20 on Steam. But on Itch.io, say, it could make $14 per game while charging $16, or even less if the publisher wanted to be a jerk to Itch. So normally, platforms that took a smaller cut than Valve does could undersell Steam and potentially gain market share via their lower prices, potentially forcing Steam to in turn lower its cut to compete, lowering game prices across the board.
The kind of agreement alleged would mean the publisher must instead charge at least $20 on Itch and other such platforms. At the immediate level that means you can never get a price break on another platform. I don't see any way in which it reduces prices to consumers, quite the reverse, even in the short term. In the longer term, by making competition on price impossible, it reduces pressure for Valve to reduce their cut, so that would keep prices higher in the longer term.

So yeah, I don't see where you get the idea that such agreements would lower game prices in any way shape or form.

Well, we’ll have to agree to disagree on both points. On your first point, selling below cost, that’s called dumping and that is clearly not what Valve is doing and your example is completely irrelevant.

On your second point, it is (apparently) a term of service for Steam that publishers NOT sell their games for a lower price on a competing platform. They can of course choose not to sell their game on steam (or not to sell it for a while) as many do when they go on the Epic Game Store. In fact many or most publishers sell their games through their own online stores, including EA, Ubisoft and CDPR - cool, they can do that... BUT BUT BUT... if you want the benefit of selling your game on Steam you can’t position it as a higher priced store to make your own store look better in comparison. Can’t have your cake and eat it too... this cake is no lie! Publishers can also choose to sell games exclusively on their own platform like Blizzard or Riot or Epic does... in fact there’s lots of competition... because Valve keeps Steam’s rules simple and expansive.

Quoting: GrazenWell, we’ll have to agree to disagree on both points. On your first point, selling below cost, that’s called dumping and that is clearly not what Valve is doing and your example is completely irrelevant.

Are you for real? You made a claim about what it means for something to be anti-competitive. I refuted that claim. That's what it's relevant to.

And in the second point, you made a claim that these (alleged) license terms of Steam's would cause lower prices. I refuted that claim, and showed how it was in fact the reverse of that. So when you came back to me you sidestepped that whole thing to say that they're just good because Steam is good and letting other stores undersell them would be bad. Maybe, but that's not at all what you were saying before. You are not arguing in good faith.