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.
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Hrm. My feelings on this are complicated.
1. I kind of like Valve. They're not as evil as most companies their size and for reasons of their own they do nice things for Linux.
2. I kind of hate Epic, who certainly have a hand in this lawsuit. Their "competition", as some have pointed out, is really just a strategy of operating at a loss to force competitors to also operate at a loss, so they can use their (and their sponsors') deep pockets to outlast the competition, drive them out of business, and thereby get a monopoly of their own, at which point they will jack up their cut. Anyone who thinks they won't jack up their cut the moment they have marginalized the competition, is naive. Luckily, I think they will fail.
3. The lawsuit is unlikely to succeed, very likely has little merit in US law, and is largely a sort of publicity stunt, an attempt to blacken Valve's name in the media.
However.
1. Valve is in fact a monopolist, and if the world had a level of antitrust protection ideal for fostering a competitive capitalist economy, they would be cut down to size (along with a bunch of others like Facebook, Microsoft, Google, Amazon et cetera). They didn't become a monopolist by being bad people (like, say, Microsoft did), they aren't even as nasty as most of their competitors (except Itch, who are sweethearts), but the fact remains--they dominate the space, their network effects and actions create barriers to entry, and this kind of thing causes problems for capitalist economies.
(1a. Not that I care in a sense, since I'm not a fan of capitalism anyway)
2. That thing Scaine is talking about with the algorithm, that's terrible, and very real, and everyone trying to persuade themselves the algorithm can't possibly be important is brandishing some major league denial. The basic facts Scaine pointed out make it utterly clear: If only one major, sudden change happens and immediately afterwards your sales get divided by ten, the causation is pretty obvious. It's about at the level of, someone hits you upside the head with a baseball bat and afterwards you have a headache. All the counterarguments seem to be less arguments as such than sort of instinctive rebellion against the idea that the world could work in a way they think it shouldn't.
So, to be clear: Stuff about gradual changes over years in the gaming world that could affect indie profits does not explain sales dropping by a factor of ten in a day. Stuff about "Oh, they must be lousy games because good games will magically get found" is not even relevant to sales dropping by a factor of ten in a day. Stuff about some good indie games occasionally still breaking through does not explain sales dropping by a factor of ten in a day.
(2a. A fair amount of the objection to the idea of the Steam algorithm having a very large impact on sales seems to be based on the idea that fair competition is some kind of law of nature, and so it's just inevitably the case that good quality games will sell well. It's like if anything seems to be unfair enough that it could make good quality things fail in the magical marketplace, that must somehow be an illusion. This is nonsense, and gives me vibes of "all's for the best in this best of all possible worlds".)
(2b. The relationship between quality, marketing, sales, and even sales potential is complicated, and sheer dumb luck also looms large in the equation. For example, something can be very good and yet have a very small potential audience--there are niches not many people are into, and if you do an excellent job filling that niche, it's a very good game even if it has low sales potential)
3. It's unclear whether 30% is too much, but frankly it probably is. And the idea that it must be OK because that's what Apple charges makes me laugh maniacally.
To sum up: Valve is a decent company, and Epic is crap, and this lawsuit is going nowhere and is probably bogus publicity bait, but Valve is a monopolist, the game economy would be healthier without a player that could warp the conditions of the whole market, Valve should really do something to the algorithm so it stops hosing indies, and 30%, despite a lot of uncertainties, seems a tad high.
1. I kind of like Valve. They're not as evil as most companies their size and for reasons of their own they do nice things for Linux.
2. I kind of hate Epic, who certainly have a hand in this lawsuit. Their "competition", as some have pointed out, is really just a strategy of operating at a loss to force competitors to also operate at a loss, so they can use their (and their sponsors') deep pockets to outlast the competition, drive them out of business, and thereby get a monopoly of their own, at which point they will jack up their cut. Anyone who thinks they won't jack up their cut the moment they have marginalized the competition, is naive. Luckily, I think they will fail.
3. The lawsuit is unlikely to succeed, very likely has little merit in US law, and is largely a sort of publicity stunt, an attempt to blacken Valve's name in the media.
However.
1. Valve is in fact a monopolist, and if the world had a level of antitrust protection ideal for fostering a competitive capitalist economy, they would be cut down to size (along with a bunch of others like Facebook, Microsoft, Google, Amazon et cetera). They didn't become a monopolist by being bad people (like, say, Microsoft did), they aren't even as nasty as most of their competitors (except Itch, who are sweethearts), but the fact remains--they dominate the space, their network effects and actions create barriers to entry, and this kind of thing causes problems for capitalist economies.
(1a. Not that I care in a sense, since I'm not a fan of capitalism anyway)
2. That thing Scaine is talking about with the algorithm, that's terrible, and very real, and everyone trying to persuade themselves the algorithm can't possibly be important is brandishing some major league denial. The basic facts Scaine pointed out make it utterly clear: If only one major, sudden change happens and immediately afterwards your sales get divided by ten, the causation is pretty obvious. It's about at the level of, someone hits you upside the head with a baseball bat and afterwards you have a headache. All the counterarguments seem to be less arguments as such than sort of instinctive rebellion against the idea that the world could work in a way they think it shouldn't.
So, to be clear: Stuff about gradual changes over years in the gaming world that could affect indie profits does not explain sales dropping by a factor of ten in a day. Stuff about "Oh, they must be lousy games because good games will magically get found" is not even relevant to sales dropping by a factor of ten in a day. Stuff about some good indie games occasionally still breaking through does not explain sales dropping by a factor of ten in a day.
(2a. A fair amount of the objection to the idea of the Steam algorithm having a very large impact on sales seems to be based on the idea that fair competition is some kind of law of nature, and so it's just inevitably the case that good quality games will sell well. It's like if anything seems to be unfair enough that it could make good quality things fail in the magical marketplace, that must somehow be an illusion. This is nonsense, and gives me vibes of "all's for the best in this best of all possible worlds".)
(2b. The relationship between quality, marketing, sales, and even sales potential is complicated, and sheer dumb luck also looms large in the equation. For example, something can be very good and yet have a very small potential audience--there are niches not many people are into, and if you do an excellent job filling that niche, it's a very good game even if it has low sales potential)
3. It's unclear whether 30% is too much, but frankly it probably is. And the idea that it must be OK because that's what Apple charges makes me laugh maniacally.
To sum up: Valve is a decent company, and Epic is crap, and this lawsuit is going nowhere and is probably bogus publicity bait, but Valve is a monopolist, the game economy would be healthier without a player that could warp the conditions of the whole market, Valve should really do something to the algorithm so it stops hosing indies, and 30%, despite a lot of uncertainties, seems a tad high.
3 Likes, Who?
Quoting: GuestValve need competition against Steam. The reality is that it's the main place to get most games, and it's the primary point of purchase for just about anything. I've seen a good many comments on this very site that if a game isn't on Steam, they won't buy it. If a developer wants a game to be successful, they've practically no choice but to put in on Steam (exceptions exist of course, but for the vast majority this is quite true).
We buy only if it's on steam because valve is only one from them who seriosly invest into linux. When i say "game isn't on Steam, I won't buy it" i do it because i want to support drivers and proton development by purchoase. Which one store seriously supported linux? GOG dont heve linux build of their own Galaxy! epic sabotaging us by bribing devs to support only theyr store withou linux support and efectively cancle linux build by that!
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Quoting: ArtenWe buy only if it's on steam because valve is only one from them who seriosly invest into linux.
There is also a lot of reason why people will only buy on steam. I'll take myself as an example.
Steam was the first in the market most other stores arrived far too late on the market when they finally caught with the reality that digital sell were juicy. Epic is the very last one, they will struggle to get people like me. My steam account is soon to be 15 years old I have hundreds of games on it all my friends are there. Epic like other stores before have nothing for me that steam don't have, and exclusivity deals only makes me hate them.
The only store that got me was GoG because they started with a very niche market. Old games and DRM free indies. No one had that. Steam only started to get serious on indies when GoG started to have success. So yeah for some years GoG was the only place you could get these games. Then they started to expand their offer. So, I got to buys there too because I already was a customer. They only started to lose me when I got 100% of my time on Linux and couldn't use GoG galaxy and had some online games that I couldn't play any more because they used the GoG API and forced the use of GoG Galaxy.
Where was epic games 18 years ago when steam was created? Where were they 15 years ago when steam started to get big? It's very rich from them to complain about a "monopoly" they participated to create and push other companies against Valve, when they are themselves very late to the party.
EDIT:
I'm sorry if I sound a bit harsh, but I'm really tired of people throwing shit at Valve for no good reason. Valve is far from being a saint, but some things need to be said. If Valve and Steam are in the position they are today it's because they were left alone for so many years without any real competition. And now a lot of people act all surprised as if that was new. Valve only have a de facto monopoly competition was always free to be created it just wasn't.
Last edited by DerpFox on 1 May 2021 at 2:01 am UTC
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There is one more think. 30% is a misleading. Valve has their cut only if they sell it. But if developer generate key and sell it elsewhere (humble bundle,...) key is free, game has full support of steam store but valve has 0 money from it. So in 30% is also calculated usage of infrastructure for "black passenger" whom did not payed it. Devs did note use this? How it is Valve fault? Devs have this option!
https://arstechnica.com/gaming/2019/04/why-valve-actually-gets-less-than-30-percent-of-steam-game-sales/
Last edited by Arten on 1 May 2021 at 2:14 am UTC
https://arstechnica.com/gaming/2019/04/why-valve-actually-gets-less-than-30-percent-of-steam-game-sales/
Last edited by Arten on 1 May 2021 at 2:14 am UTC
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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.
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Quoting: ArtenThere is one more think. 30% is a misleading. Valve has their cut only if they sell it. But if developer generate key and sell it elsewhere (humble bundle,...) key is free, game has full support of steam store but valve has 0 money from it. So in 30% is also calculated usage of infrastructure for "black passenger" whom did not payed it. Devs did note use this? How it is Valve fault? Devs have this option!
https://arstechnica.com/gaming/2019/04/why-valve-actually-gets-less-than-30-percent-of-steam-game-sales/
I think that's really interesting. Thank you for sharing. I did not know that. Great engagement tool. I assume the idea is to re-capture the consumer once they get back to Steam for the next and subsequent purchases?
I assume it's a great lock-in tool on the sales side too since a key seller doesn't need thier own infastructure, there's no point in investing in a full store/client/distribution system. Hence no full on competition to Steam since they need Steam for thier store?
Edit. Sorry for the double post. Im honestly not sure what I did.
Last edited by denyasis on 1 May 2021 at 3:58 am UTC
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Quoting: scaineQuoting: kuhpunktQuoting: scaineQuoting: omer666Quoting: Liam DaweRosen and Graham have been CEO and COO of Humble Bundle up until 2019, and are still in the company today as "advisors" after stepping down. SourceQuoting: toorI feel now that my money should rather go to Valve than to them for sure.They haven't been a part of Humble Bundle for years.
I think the confusion is that Wolfire sold Humble Bundle to IGN in 2017, even though the CEO's of Wolfire stayed on the Humble board as advisors, while also being CEO of Wolfire. A bizarre arrangement.
Quoting: scaineThese aren't popular games, but they're solid games that used to get exposure. Now they don't. So the 30% cut by Valve, for these devs, is particularly insulting, because Valve is adding precisely no value. Indeed, many of these indies saw (for the first time, ever, over years) greater sales via Itch, than on Steam.The algorithm is a real problem indeed, but it doesn't mean the cut is unfair. People these days want to get everything for free and they realise later on why it was so cheap. Steam does take 30% but they inject it back in functionality, infrastructure and (sometimes open source) development.
Epic spend most of their money into buying exclusives, which are AAA games. In the end both consumers and indie developers get screwed but no one seems to care.
I'm tired of arguing this on behalf of the various indies I follow on Twitter, but I'll say it one more time - these Indies used to (past tense) get great value from Valve, by way of large customer base and a tiny bit of exposure to engage that customer base. As of the 2018 change, that is no longer the case.
There's simply no point in justifying a 30% cut by promoting services that will never be used... because no-one knows these games exist, since the algorithm doesn't give any exposure. It used to be a tiny sliver. Now it's not even that.
Personally, I suspect that Valve realised that a non-curated store was a terrible mistake - it led to uninteresting, fringe and plain "bad" titles being surfaced on its front page. Therefore this is simply a way to push those titles to the bottom of pile without actually taking the bad press that shutting them out would generate.
Just a shame it pole-axed the indies at the same time.
Andyou still speak in past terms, still referencing the 2018 stuff.
And now you talk abot the non-curated store that led to "uninteresting, fringe and plain "bad" titles being surfaced on its front page" - what? How many of those unsatisfied devs are actually the ones that people complain about?
What's your point. What are you asking me? I'll do my best to answer on behalf of the devs I'm now apparently defending.
You continue bringing up the 2018 incident and not what happened after. That seems disingenous.
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For 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).
Last edited by s8as8a on 1 May 2021 at 4:54 am UTC
Last edited by s8as8a on 1 May 2021 at 4:54 am UTC
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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.
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