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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UltraAltesBrot Apr 30, 2021
Since my comment is rather long, I've put it in a spoiler. Thank you if you read it, just had to get it off my chest somewhere, lol.
Spoiler, click me
As if a mere adjustment of the cut would fix anything. That's far too short-sighted and simplifies the real issue.
Customers/backlog
I'm not a dev, so of course I can only speak from the perspective of a customer. And as a customer I don't have infinite resources: My money and even more as I get older my time is limited. When I reflect on my purchasing behavior and my Steam library itself I notice: I buy way fewer games that I did year ago. Why? Limited time, as mentioned before. That limited time I want to invest in the games that interest me the most (right now) and games I see myself complete - be it a short, sophisticated game with fresh gameplay or a longer game with long-time motivations (collectibles, dense story, ...). Furthermore, I amounted a huge backlog of games that are cool but didn't get to play or finish yet.
Market saturation
What I want to say is that my library is oversaturated. Others already mentioned here in the comments: The market is oversaturated, too. Hundreds of games come out every day and not only do they have to compete with current or future games, but also loads of older (indie)games (e.g. why play a new probably average indie metroidvania when I haven't even touched masterpieces like Hollow Knight, Dead Cells, Shovel Knight or Celeste?). Of course people pay attention to Steam reviews a lot and will probably refrain from buying a game that might not be rated positive enough in their opinion.
Customer expectations
Also, customer interest is way different than years ago: Many players expect "games as a service", multiplayer/coop games and most importantly communication (even more with early access games). You can't throw your game at the store and expect the algorithm to sell it for you. Building a community and communicating with users through blog posts isn't only important on release, but before and after it. Maybe your average-looking farming sim or mediocre JRPG is just that: Not good enough. And even if it's great you have to convince people of it being great not only when they play it, but before: Sell your game. Marketing, communication, build your community.
Why I and probably many others use Steam
Even though Steam has many half-assed features (broadcasts, new chat, 32-bit client without ipv6 support, ...) it's still considered the status quo. Why? Because there is nothing better around especially on Linux:
Epic: Nothing aside from freebies or exclusives keeps customers there, because there is nothing else. Also, no Linux support
GOG: On the rise (see recently released article), but still no Linux support.
Steam: Sales, returns, community, excellent Linux support with Proton which is absolutely insane if you look just 5 years back in time, ...
Don't get me wrong. As soon as there is a really superior platform on the market or Steam turns anti-customer, people will switch and vote with their wallets. See the paid mods drama they started or that the Steam cut already gets adjusted if you reach a certain threshold sales (which is still out of the league for indie games, though).
Conclusion
What's the solution then? I don' know! I'm not getting paid to come up with one.
Is Steams cut too high? Probably, depending of how much devs use Steam features in their games. As a minimum they'll give you an audience that you have to make use of, host your game, do the billing and a lot of community features from a forum over game server network capacity to inventories with paid skins and stuff. Maybe let devs choose what they need and adjust the cut based on that.
Should the price parity be dropped? Depends. If a dev decides to release on a storefront with fewer features that can offer to sell their game cheaper due to lower running costs or whatever, that should be possible. But what would happen in the long term? I think games value and prices would drop even more, which first seems good but quality would severely suffer long-term. E.g. key stores are there yet and Steam sees nothing of the money gained there, even though they cover all hosting costs and stuff.
All in all I believe Valve is still a giant money-sink that could innovate way more. Since they are privately-owned, nobody knows how much money they really own or where it goes. Imo they haven't abused their market power that much. If other big companies like EA or Activision would be in charge, we'd be screwed. But for the time being, competition hasn't managed to catch up despite Valve's/Steam's flaws and due to the complexity of the market.
Customers/backlog
I'm not a dev, so of course I can only speak from the perspective of a customer. And as a customer I don't have infinite resources: My money and even more as I get older my time is limited. When I reflect on my purchasing behavior and my Steam library itself I notice: I buy way fewer games that I did year ago. Why? Limited time, as mentioned before. That limited time I want to invest in the games that interest me the most (right now) and games I see myself complete - be it a short, sophisticated game with fresh gameplay or a longer game with long-time motivations (collectibles, dense story, ...). Furthermore, I amounted a huge backlog of games that are cool but didn't get to play or finish yet.
Market saturation
What I want to say is that my library is oversaturated. Others already mentioned here in the comments: The market is oversaturated, too. Hundreds of games come out every day and not only do they have to compete with current or future games, but also loads of older (indie)games (e.g. why play a new probably average indie metroidvania when I haven't even touched masterpieces like Hollow Knight, Dead Cells, Shovel Knight or Celeste?). Of course people pay attention to Steam reviews a lot and will probably refrain from buying a game that might not be rated positive enough in their opinion.
Customer expectations
Also, customer interest is way different than years ago: Many players expect "games as a service", multiplayer/coop games and most importantly communication (even more with early access games). You can't throw your game at the store and expect the algorithm to sell it for you. Building a community and communicating with users through blog posts isn't only important on release, but before and after it. Maybe your average-looking farming sim or mediocre JRPG is just that: Not good enough. And even if it's great you have to convince people of it being great not only when they play it, but before: Sell your game. Marketing, communication, build your community.
Why I and probably many others use Steam
Even though Steam has many half-assed features (broadcasts, new chat, 32-bit client without ipv6 support, ...) it's still considered the status quo. Why? Because there is nothing better around especially on Linux:
Epic: Nothing aside from freebies or exclusives keeps customers there, because there is nothing else. Also, no Linux support
GOG: On the rise (see recently released article), but still no Linux support.
Steam: Sales, returns, community, excellent Linux support with Proton which is absolutely insane if you look just 5 years back in time, ...
Don't get me wrong. As soon as there is a really superior platform on the market or Steam turns anti-customer, people will switch and vote with their wallets. See the paid mods drama they started or that the Steam cut already gets adjusted if you reach a certain threshold sales (which is still out of the league for indie games, though).
Conclusion
What's the solution then? I don' know! I'm not getting paid to come up with one.
Is Steams cut too high? Probably, depending of how much devs use Steam features in their games. As a minimum they'll give you an audience that you have to make use of, host your game, do the billing and a lot of community features from a forum over game server network capacity to inventories with paid skins and stuff. Maybe let devs choose what they need and adjust the cut based on that.
Should the price parity be dropped? Depends. If a dev decides to release on a storefront with fewer features that can offer to sell their game cheaper due to lower running costs or whatever, that should be possible. But what would happen in the long term? I think games value and prices would drop even more, which first seems good but quality would severely suffer long-term. E.g. key stores are there yet and Steam sees nothing of the money gained there, even though they cover all hosting costs and stuff.
All in all I believe Valve is still a giant money-sink that could innovate way more. Since they are privately-owned, nobody knows how much money they really own or where it goes. Imo they haven't abused their market power that much. If other big companies like EA or Activision would be in charge, we'd be screwed. But for the time being, competition hasn't managed to catch up despite Valve's/Steam's flaws and due to the complexity of the market.
14 Likes, Who?
Quoting: 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.
Quoting: TheSHEEEPThe solution is simple: Lower the minimal cut to something reasonable (closer to the Epic cut), then allow developers to opt-in to features they actually need, which would then increase the cut.If you do this, it's the customers who will complain, like they did with the Epic store. People want community hubs, Steam Family Sharing, Steam overlay's custom gamepad button mapping, etc. Games from developers who don't have the money to get these will be even more prejudiced.
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.
3 Likes, Who?
Chronarius Apr 30, 2021
Quoting: Liam DaweThey haven't been a part of Humble Bundle for years.
They have been "Humble Bundle" before they sold it off to IGN.
Last edited by Chronarius on 30 April 2021 at 1:15 pm UTC
0 Likes
Quoting: dubigrasuRichard Geldreich, that guy has a huge chip on his shoulder about Valve, I don't believe a word he's saying. Of course he's siding with Epic.
This guy sounds over the top in many regards.
But, indeed, he seems to outright hate his former employer Valve.
Judging from his tweets I wouldn't blame Valve, though.
3 Likes, Who?
Quoting: kuhpunktQuoting: scaineQuoting: kuhpunktQuoting: scaineQuoting: kuhpunktQuoting: scaineThe same argument and frustration is often voiced around Play and Apple's store - they take their 30% cut but unless you magically put out the next minecraft, factorio or limbo, you're gonna languish with pitiful sales until you go out of business.
And the solution would be what? Everybody is always screaming for CoMPetItiOn... and when they have that and lose against other more popular titles, it sucks. Go figure.
The point is how they get popular. If the algorithm was fairer for new titles, then indies would have a better chance at leveraging Steam and becoming the next big thing. But since it doesn't, they never hit the front-page and the same tired (but popular) games are constantly regurgitated on the carousel and in the discovery queues.
There's also a huge amount of opacity around how that algorithm works. It used to be "okay" for indies, but a couple of years ago (maybe 2018?) it changed, and multiple indies saw their revenues destroyed. They weren't even being surfaced during sales. It put some studios out of business.
You can't force being popular. No algorithm in the world can change that. It used be be "okay" for indies, because there was less competition. Less games that would take away your attention.
Valve already tries what they can with Game Festivals and whatnot, where they highlight hundreds of games.
Do people complain about Bandcamp or iTunes or Amazon, because their unknown albums and movies aren't able to compete with Taylor Swift and Star Wars?
The algorithm did change that. It's nothing to do with competition. Sure, you can't force being popular, but even 1000 sales for an indie were important and they got those sales, year after year, sustainably. Then the algorithm changed (devs were informed by Valve that this was happening, but no details as to what it meant) and 1000+ sales turned into less than 100.
So, multiple indies reporting that their sales literally fell off a cliff, as a result of this one change.
These 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.
Yeah, and they change the algorithm again and they constantly tune it and they have the Steam Labs (they just released the new store to hopefully improve visibility), but when you are one in 50000 games, how is Steam supposed to give everybody the same exposure?
And if they aren't happy on Steam, they can just leave and be successful elsewhere, like Itch. Free market.
They're already on Itch? What's your point here? Mine is that multiple indie devs are aggrieved by a 30% cut because Valve adds no value. Nobody said anything about "same exposure". All the indies want a moment in the spotlight. Valve used to do that, now they don't.
Also, no, they don't change the algorithm that much - they announced this change. And it crippled many indies.
You know what? Maybe you're right, and they do change it all the time. That doesn't change the argument that a 30% cut of nothing is still nothing.
1 Likes, Who?
Quoting: 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.
3 Likes, Who?
Quoting: amataiIs it really the algorithm ?
https://www.statista.com/statistics/552623/number-games-released-steam/
There are more and more game on steam, people tends to also buy and play games from a few year ago especially as game tend to get support for years concurrency is not just new game but also all the game released on the last few years. 100 milions players is not that much when there is 40-50 thousand games compared with the one thousand or so DS game for the same userbase.
It's really the algorithm yes. Devs saw their sales fall off a cliff. That doesn't happen with natural growth of the market.
You can't buy what you don't know about. Sure, a bigger market makes everything worse, but it doesn't have an overnight effect on sales drying up.
3 Likes, Who?
Quoting: 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?
0 Likes
Quoting: TheSHEEEPI hope the lawsuit succeeds, although chances are naturally slim.
Their cut is and always has been too high.
Yes, they offer a ton of services, but practically no developer utilizes even half of them.
The solution is simple: Lower the minimal cut to something reasonable (closer to the Epic cut), then allow developers to opt-in to features they actually need, which would then increase the cut.
But Epic cut is dumping: https://www.techpowerup.com/280877/epic-games-lost-usd-453-million-running-the-epic-games-store-in-2019-2020
They got $265 Million from third parties, which means that they got a profit of 26.5 million. Remove the millions they spend with exclusives and free games plus Fortnite benefits and you will be far from making any profit with that 12% cut.
BTW, seems that GOG takes a similar cut from devs and had financial problems not long ago. Anyway, what a greedy bastards!
Last edited by x_wing on 30 April 2021 at 1:38 pm UTC
0 Likes
Quoting: scaineI'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.If you are tired of repeating the same argument, why do you keep repeating it?
I read it and acknowledged it, but it still doesn't make a whole lot of sense to me. What I can state is what I obviously see most of the time: people like Steam as a software, as a product in itself, and someone has to pay for it. If you don't charge developers, then you will have to charge customers for the premium features. What do you think is the best compromise?
4 Likes, Who?
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