May 9, 2021

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As Epic v. Approaches. Apple in court, Valve also sued Steam

Just two days before Apple was dragged into a California court to justify the 30 percent fee in the App Store – and two days after Microsoft axed the 30 percent cut in the PC – We learn that gaming giant Valve is now facing lawsuits against its own 30 percent cut and alleged anticompetitive practices with the PC gaming platform Steam.

“Valve has abused market power to ensure that game publishers have no choice but to sell most of their games through the Steam Store, where they are subject to Valve’s 30% toll,” the indie developer argued. game at Loving Bundle creator Wolfire Games, in a lawsuit filed on Tuesday (via Ars Technica).

Similar to Epic v. Apple, the new suit argues that a platform owner is using an effective monopoly in the area where people run their software (there, iOS; here, Steam) to dominate and tax an entire separate industry (alternative apps / game stores), an industry that could theoretically produce and produce lower prices for consumers if not for (Apple’s / Valve’s) iron grip.

Wolfire claims that Valve now controls “approximately 75 percent” of the entire gaming PC market, taking in an estimated $ 6 billion in annual revenue as a result of just 30 percent of fees – more than $ 15 million per year. per Valve employee, assuming the company still has somewhere around 360 employees It confirmed its existence five years ago.

About how The valve may have its strength, there’s a list of laundry complaints you might want to read in full (which is why I’ve embedded the complaint below), but the arguments seem to sink in:

  • Every attempt by another company to compete with Steam has failed to make sense, even though many of them offer developers a bigger revenue cut, such as Epic Game Store’s 88-percent revenue share
  • Steam does not allow publishers to sell PC games and game keys for less money elsewhere
  • This in turn means rival game platforms cannot compete on price, preventing them from gaining a foothold.
  • Most rival game stores have given up more, like how EA at Microsoft has each returned their games to Steam
  • This ensures that Steam remains the dominant platform, as the companies have been can have become competitors are reduced to simply feeding the Steam engine into their games or selling keys on Steam

Wolfire said the Humble Bundle in particular has fallen victim to Valve’s practices – the lawsuit alleges that “publishers are increasingly reluctant to participate in Humble Bundle events, reducing the quantity and quality of products available in Humble Bundle customers, “for fear of retaliation if Humble Bundle buyers resell their Steam keys on the gray market for cheap – and even Valve once worked with the Humble Bundle in a keyless direct integration, the lawsuit alleges that Valve suddenly pulled the plug on cooperation without explanation.

As you might expect, the lawsuit doesn’t waste a lot of ink consideration why gamers may prefer Steam than those of EA’s Origin or Microsoft’s Windows Store beyond the simple matter of price; I would argue that most Steam competitors are somewhat lackluster when it comes to meeting the many wants and needs of PC gamers. But it doesn’t rule out Valve’s anticompetitive work practices, assuming these claims are true.

Valve did not respond to a request for comment.

This is not the first lawsuit against Valve; a group of individual game buyers filed a somewhat similar complaint in January, and I’ve also embedded the new amended version of the complaint below. But the previous complaint also accused game companies including Valve – this new lawsuit was by a game company itself.

Each suit hopes to win class action status.

Whether these plaintiffs succeed against Valve or not, pressure is clearly rising to reduce app store fees across the industry, and Valve may have a harder time justifying the allegations. this than most – it seems more dominant in the PC gaming space than either Apple or Google on the smartphone one, even though there are fewer PC gamers than phone users.

Valve also doesn’t necessarily make a big concession to game developers right now. In 2018, Valve adjusted its revenue split to give more money to larger companies, reduces the 30 percent cut to 25 percent after a developer is worth up to $ 10 million in sales, and drops to 20 percent after they reach $ 50 million. (Apple and Google dropped their cuts to 15 percent for developers with under $ 1 million in sales, theoretically that helps smaller developers rather than larger ones.) But the Epic Games Store takes up only 12 percent, and is only copied by Microsoft’s Windows Store that lead by dropping the 30 percent cut to 12 percent also.

The EU may also add more pressure in the future; yesterday, European Commission executive vice president Margrethe Vestager announced that “there will also be interest in the gaming app market” following its conclusion that Apple violated EU antitrust laws around music streaming apps. The European Commission already has Valve on its radar, too; it fined the company earlier this year for the sale of geo-blocking the game.