The games industry is going through a bit of shakeup right now as developers are pushing back against the autocratic regime, or in other words developers are realizing how some storefronts may be taking advantage of their position and want it to stop. That’s exactly what Wolfire Games, the developer of cult indie games Overgrowth and Receiver, is doing by filing an antitrust lawsuit against Valve, the owners of Steam.
Steam is by far the biggest storefront on PC at the moment, and although it has some competition, they don’t seem to be able to come anywhere close to Valve’s dominant position. So much so that Wolfire Games believes this is part of some anticompetitive behavior, and that Valve is abusing their position in the market.
Even Steam’s biggest competitor at the moment, the Epic Games Store, is only able to do so by spending millions of dollars on exclusivity deals and free games, effectively losing money in the process to gaining more popularity. Yet even then, the Epic Games Store only has a share of 15% in the entire market (as of June 2020).
The lawsuit comes soon after Microsoft announced their own decision to reduce their own store fees for developers from the usual 30% down to 12%, matching the Epic Games Store. Steam still has a 30% fee for games that sell up to $10 million, after which the cut is 25%, and can be further reduced to 20% when sales reach $50 million.
“In order to afford Valve's 30 percent commission, game publishers must raise their prices to consumers and can afford to invest fewer resources in innovation and creation,” reads the lawsuit. “Gamers are injured by paying higher retail prices caused by Valve's high commissions. Competition, output, and innovation are suppressed, in ways that can never be fully redressed by damages alone.”
Essentially, Steam’s high cut from developers and other anticompetitive behavior is not just hurting developers, but consumers as well, since Steam forbids developers from selling their own games at lower prices anywhere else.
The lawsuit also quotes Epic CEO Tim Sweeney, who once said back in 2019 that if Steam committed to a permanent reduction in their fees, then Epic Games would “hastily organize a retreat from exclusives” and potentially even put their own games back on Steam.
Anticompetitive has been a bit of a buzzword in the games industry lately, mostly thanks to the ongoing legal fight between Epic Games and Apple. Whilst the lawsuit is seeking damages, it is also seeking “injunctive relief removing Valve's anticompetitive provisions,” which apparently “is necessary to bring competition to the market and benefit the public as a whole.”
What do you think? Is Steam being anticompetitive towards developers? Should Valve update their store policies for developers? Do you think they ever will? Let us know your thoughts!