Valve is facing an antitrust lawsuit from two indie game developers who accuse it of abusing its market power by charging a 30% commission fee and preventing them from offering lower prices on other platforms. The co-founder and president of Valve, Gabe Newell, has been ordered by a federal judge to give an in-person deposition in the case, despite his request to testify remotely due to the COVID-19 pandemic. The judge ruled that Newell’s unique knowledge of Valve’s business strategies and policies was crucial for the plaintiffs’ case, and that a remote deposition would be unfair and inadequate. The deposition is scheduled to take place on December 15, 2023, in Seattle.
>accuse it of abusing its market power by charging a 30% commission fee and preventing them from offering lower prices on other platforms.
Sure, the plaintiff may not agree with Valve's 30% cut because they find it too steep, but unlike the iOS/Android marketplaces, Valves is not a monopoly marketplace in the PC space. There are other competing marketplaces they can go to like Epic, Windows store, GoG (which most likely also charge 30%)
And plus, on PC you don't even need a marketplace to sell and run your game. Anyone can install software from whatever source. Heck, they can even host their games on google drive and share the link via e-mail to customers who buy their game off their website, or some ghetto solution like that if they wanna save a buck on distribution costs.
Their livelihood is not being gatekept or threatened by Valve or any other marketplace like in the mobile space. So I still don't get their monopoly angle here.
>and preventing them from offering lower prices on other platforms
I think this is the crux of the matter, rather than the 30%.
As much as I enjoy steam and don't care in the slightest that they charge a 30% fee for all they offer, I can't see any general benefit for any of the game companies to be able to dictate how game makers price their goods on other platforms or for direct sales.
If Valve is making access contingent on competitor pricing, I could understand it being seen as anti-competitive behavior. It should be banned across all of the marketplaces if it somehow doesn't fall afoul of some consumer protection law already.
edit:
HideousKojima says below that the pricing only applies if they're selling steam keys. If that's the case, I can't see how this has merit. If you're selling Valve's support of your game to users, pay them what they ask. If you're selling elsewhere and Valve is uninvolved, then there would be an issue.
I thought about that and realized they have a good reason. If they didn't do that, people would use Steam as a storefront to find games and then buy them on a different platform.
So if this wasn't in place, Steam would be unable to make money.
That being said, the indie developers could just set the game price to the same everywhere when they want to make a discount (which is what most do)
> people would use Steam as a storefront to find games and then buy them on a different platform
FWIW I do that anyway whenever I can find a platform that lets me buy and own the game outright, rather than depending on Valve having then good graces to continue allow me to log into Steam.
I also have a Steam Deck and still prefer buying games from GOG, when possible. Heroic Launcher is a nice GUI that let's you easily install GOG+Epic store games, sets up the proton stuff and gives you the option to add the games to Steam as non-Steam games.
Valve dont actually demand of developers to run the same discounts everywhere at the same time. You can still for instance sell game cheaper on other store, but eventually you have to run the same discount on Steam.
People would still buy on Steam to have it all in one place, and for the features that steam provides, like achievements and multiplayer with your steam friends.
That only really applies if the other platforms are as good as/better than Steam, which they aren't for most people.
> use [store] as a storefront to find [products] and then buy them [elsewhere]
Like every brick and mortar store had to contend with due to the rise of internet shopping? Did any of them have market position to prevent manufacturers from doing it?
>If they didn't do that, people would use Steam as a storefront to find games and then buy them on a different platform.
sounds good to me. If people want those advantageousfeatures or to stay in Valve's garden, they will pay more for that even if a cheaper pricing appears. Especially with so many complaining about non-steam releases and even claiming they will pay more just to say "fuck you" to EGS.
People who don't care (like me. I still have my game exe's on my desktop like a boomer) will research and find a better price, if possible. As is, Steam seems to discourage this.
>That being said, the indie developers could just set the game price to the same everywhere when they want to make a discount (which is what most do)
yes...because pricing parity. I'm assuming you can't just have a game on eternal sale on an alternative storefront as a loophole. I don't know the details of the sales period, but if GOG or Itch ever wanted their own fest, devs may be afraid due to risk of de-listing on Steam.
The most dangerous thing is that a lot of Valve is fast and loose behind the scenes. They are generally good enough to know when something is bad PR and let it slide. But there's plenty of old school Nintendo-style blurry lines when it comes to submitting.
Reviews, discovery queues, search, crowdsourced tagging, minitrailers, events, splash ads, wishlist, an entire overlay to support controller configuration (and any controller) for any videogame that's accessed through steam (even non-steam games). Discussions, mods, leaderboards, market. I suspect I can continue.
You could argue some of this features are not necessary "storefront", but the line is blurry. The point is when I want to discover new games, I go to Steam.
I'm not sure what else I could ask for as a storefront.
I am co-founder of game studio and I have lots of friends in gamedev too. I know people who sold under 100 copies of their game on Steam and got 10,000 keys for sales elsewhere no problem.
I never gonna to defend Valve 30% cut since it is terrible for anyone in game development, but honestly so far Valve itself have superb reputation as business partner and they never abused their market power.
My bet only trading card generator games ware affected when Valve cracked down on giving out umlimited number of keys.
My bet is that, like many things for Steam, it's inconsistent. Some will get a warning. Others slip through the cracks. Some may even slip but get rejected after that. But relatively few legit are companies want to take a risk to their merchant profile to begin with.
Wolfire isnt large by any means, but is definitely large enough where it couldn't get away with such obvious abuse. They could be lying, but I can believe with their general company ethos that they do/did legitimately just want an option to self-distribute, but pass on the 30% fee to the customer on Steam.
Personally I totally agree that Steam fee should be way below 30% because gamedev is tough enough to the point where actual indie studio get only 20-30% of gross revenue. Especially now when Steam dont provide any value of "organic" marketing.
What I dont agree with is Wolfire case when they want to distribute through Steam, but still give Steam customers worse deal than for Steam keys they directly sell.
It's just doesn't sounds right to me and it's certainly wont make life any easier for other indie developers without dedicated fan base. Only developers who already successful can really benefit from it.
>What I dont agree with is Wolfire case when they want to distribute through Steam, but still give Steam customers worse deal than for Steam keys they directly sell.
as far as I hear, the threat (they claim) comes from Steam delisting their game even if they don't use steam keys or DRM at all. Which I feel is fair enough.
Ultimately it's their game to distribute and I a dev should have an option to pass the cut on to the customer if it's really that drastic. That way, if customers feel slighted you can point back to steam and they can put pressure on to lower the cut.
In the far future I was thinking of doing a similar thing where I have a build on Itch.io that is cheaper than Steam. Nothing drastic: probably something like $5 for itch (itch's default cut is 10%, but I'd probably bump it to 15% personally. So I take home $4.25) and $6 on steam (where my take home would be $4.20), so I hope I don't run into such difficulty. There's been so many stories with opaque Steam support for devs that I simply want some extra control of the situation (especially since the nature of the work I want to do means I was to make the codebase open source). I don't want to put all my eggs in Valve's basket but also want to balance out any potential cuts where possible.
I think the argument is that Steam is sufficiently dominant in the PC-games marketplace that small publishers like this feel that they absolutely have to list their games there, and so have no option other than to accept Valve's terms. (With Valve's apparent "you can't sell your game cheaper anywhere else" term serving to lock in this state of affairs for Steam, by making it really hard for another store to compete on price.)
Well, people want to be on the Steam store because many eyes look at it.
That's what Valve built over time, their store has a lot of value even without selling the games.
> their store has a lot of value even without selling the game.
Wait, what? If Steam doesn't sell games it has little value. So while Steam doesn't need some random indie game, singular. It does need games, plural. (Especially since being drunk on easy money, they haven't even managed to finish their founding game franchise.)
Indies need Steam far more than Steam needs any one game. It's that power imbalance combined with Steam's terms (designed to entrench their market position) which are on trial.
Sorry I used confusing terminology.
Steam provides a lot of value without selling the game, but just listing the game: their are extremely well known, have amazing systems for game discovery.
That's why game devs feel compelled to list games on Steam.
VALVe has such strong network effects playing in their favour, nobody is gonna buy on those stores if it's also on Steam, except GoG maybe, as it lets you download the games DRM free IIRC
If it's any consolation, Valve also makes it pretty easy to play GoG games on Deck. You can run GoG installers in Proton and set them up with their own virtualized C:/ drive like other Steam games. They do a good job ensuring that even if a competing store came out, users would have proper access to it. That's commitment to customer satisfaction worth supporting, but don't be afraid to support devs outside Steam either!
Kinda? You then have to figure out the correct graphic settings.
I have BG3 on GoG (backed on kickstarter way back) and unfortunately it runs terribly on the Deck, to the point I'm not playing it right now
Absolutely this, steam still wins on ux by a mile. Windows store still has shitty drive management (try moving a game to a different drive... Good luck!) and download management. Epic is full of scam crypto games and in general just has a cruddier UI. GoG is awesome though.
Epic gets around this by offering free games all the time, though. Not sure how they can do that for games on steam as well, first I've heard about locked in pricing.
I don't use those features, so I'll take the lowest bidder. GoG galaxy groups them all together for me anyway (and I only play single player games really, outside of like, the rare fighting game. So I don't need to worry about servers).
One major difference - windows PCs don’t come with Steam pre-installed. Android phones do come with the Play Store. Defaults matter, because the vast majority of people don’t change defaults. That’s why Google pays Apple tens of billions to be the default search engine.
Everyone who has steam installed on their PC made a conscious choice to do that. They went out of their way to store.Steampowered.com, downloaded and installed.
Anti-trust regulators take a dim view of building market dominance by bundling. This is why Microsoft was forced to stop bundling some components with Windows back in the day.
>Anti-trust regulators take a dim view of building market dominance by bundling. This is why Microsoft was forced to stop bundling some components with Windows back in the day.
except... internet explorer is still bundled with windows to this day?
> The U.S. government accused Microsoft of illegally maintaining its monopoly position in the personal computer (PC) market, primarily through the legal and technical restrictions it put on the abilities of PC manufacturers (OEMs) and users to uninstall Internet Explorer and use other programs such as Netscape and Java.
> is a case brought by the European Commission of the European Union (EU) against Microsoft for abuse of its dominant position in the market (according to competition law). It started as a complaint from Sun Microsystems over Microsoft's licensing practices in 1993, and eventually resulted in the EU ordering Microsoft to divulge certain information about its server products and release a version of Microsoft Windows without Windows Media Player.
> Sure, the plaintiff may not agree with Valve's 30% cut berceuse they find it too steep, but unlike the iOS/Android marketplaces, Valves is not a monopoly marketplace in the PC space. There are other competing marketplaces they can go to like Epic, Windows store, GoG (which most likely also charge 30%)
Epic charges 12%. Microsoft Store revenue split is, maximally, 100/0. For games, 88/12. Microsoft also, for years, paid you to make apps, even basic ones.
Epic Store isn't profitable, billions of dollars burned since its creation.
GOG split is actually worse in some cases.
The 30% cut is great, in Steam's case.
Like the Android and iOS marketplaces, there's sufficient value add and plenty of alternatives, so there's no reason an antitrust complaint really makes sense. In Android's case, there's the MIUI store, the Huawei store, Baidu's, Samsung's, Tencent's, and VIVO/OPPOs, and that's barely even getting into it. Since the start of the platform, manufacturers have been shipping alternative app stores.
In Apple's case, there's Cydia, AltStore, and I've even seen a few Chinese sideloaded app stores that seem to be able to do some crazy things, like on-device IPA signing. That's not even getting into the most obvious option: PWAs. It's also not getting into the fact that Apple, as a minority vendor of smartphones in America, definitionally has no monopoly. Unless, that is, your definition of monopoly is ridiculously narrow.
You compare alternative app stores on Android devices to apple alt stores requiring rooting an Apple device. Very different and not an equal comparison what so ever.
Then referring to PWAs existence as an excuse for apple not having a monopoly to their device ignoring the fact apple has resisted PWAs in general and has taken a long time to even allow them to do something as basic as permit notifications.
Your attempt at equating the two is very obviously flawed.
AltStore doesn't require "rooting" (which is the wrong term in the iOS ecosystem, too, which is jailbreaking) anything. The Chinese stores definitely didn't: You could grab them from Safari, and they installed themselves using enterprise certificates.
The problem is not the 30%, the problem is that you apparently can’t sell on steam for a higher price than you do on other market places (or directly): e.g steam is abusing its market position to get a higher royalty payment because from the end users point of view every other store costs the same, but they already have steam because it’s dominant in the market.
To be clear, this clause only applies to Steam Key sales. You can't sell keys to redeem on Steam for less than the Steam price, or Steam could get tricked into eating distribution service costs for nothing.
I'm not even sure how that works in practice since I've obtained a bunch of Steam keys for cheaper than the price on Steam. If you browse gg.deals, you can find Steam keys on legitimate third-party sites for cheaper. For example: https://gg.deals/game/horizon-zero-dawn-complete-edition/
You probably got gray market steam keys which were cheaper than what you see when you log in from home, because they were gotten from more developing countries with high piracy, like Russia, Argentina, etc.
Humble, no. They are talking more about storefronts like Green Man Gaming.
Humble is done under charity and specific bundles (you can't buy any game at any time there for cheaper), so it's not really a good way thing PR-wise for Valve to tackle. And for the most part, it's not an issue anyway since it's still more people getting into Steam.
Yeah, I subsequently saw that restriction in other comments, and that seems to significantly impact how "reasonable" the complaint is. The problem is I'm unclear what part of steam "steam keys" are for - some comments imply it's the steam DRM mechanism? but you're implying there's ongoing operating costs so is it the cloud syncing or similar?
When you buy a Steam key for a game on a site other than Steam, you have to redeem it through Steam. The download of the game (and any future re-downloads, updates, and potentially multiplayer services) will be hosted by Steam.
Ah so it’s the mechanism you’d use if you made a game and wanted to let people buy directly from your own site (say) without just saying “look for us on steam!”?
If you sell the steam key yourself do you manually pay valve or is that “free” and they assume you’re managing the payment?
Thanks for the answer that’s what I was curious about, and yeah that does kind of make it seem reasonable to me tbh. “You get to use our download and syncing infrastructure but not pay us anything for that” is a good deal.
Woflire seems to claim otherwise. So I wouldn't be surprised if this is another under-the-table rules that many devs hit. Some can get away with it, others can't.
The lower price part is probably more relevant? Honestly, I would pay 30% more for a game on steam than a download link on some website, but I definitely wouldn't use the website for the same price, right? The discount is the only way it could compete with steam at all.
As far as I understand it, Steam only requires that you sell your game for the same price on other marketplaces if you're selling Steam keys. If you're selling a non-Steam license then you don't have to match prices at all and can sell for cheaper on Epic, Itch, GoG, etc. Can someone let me know if I'm misunderstanding?
If that is actually the case then I don't see the devs' case having any merits whatsoever.
As you say, it's basically "if you're selling Steam keys elsewhere, you need to be treating your product on Steam itself generally equivalently". It's written to sound flexible -- you can discount on different storefronts at different times, so long as Steam gets the same discount eventually.
I didn't turn up anything for just selling your game without selling the Steam keys, but it's a big site so I might have missed it. (Or it might be buried in an actual contract somewhere, etc.)
> they replied that they would remove Overgrowth from Steam if I allowed it to be sold at a lower price anywhere, even from my own website without Steam keys and without Steam’s DRM.
This is correct, also the steam keys are free to generate. I.e. when you buy a steam key from sites like greenmangaming, valve/steam gets $0. Steam could easily not provide the keys service or charge their cut as keys are claimed, but they decided to take the loss.
You seem to have a fundamental misunderstanding, here.
You can sell Steam keys on other platforms. Plenty of developers sell Steam keys on Itch, for example.
You get to keep 100% of the revenue from an off-Steam Steam key sale. 100%! The only limitation is that they don't want you selling the keys for peanuts on other platforms. If your other platform is handling distribution, you can go nuts. Just don't charge 50% less on other platforms if you are depending on Steam for distribution.
You don't have to use Steam keys to sell a game on Steam. Steam only issues those keys if you request them -- you only need them if you're selling your game somewhere other than Steam (or doing something like fulfilling Kickstarter preorders). If you don't request any keys, that just means that your game is only selling through the Steam store.
They can offer lower prices on other platforms. If I dual publish my game on the Epic Games Store and Steam, the pricing can be totally different. The rule is that I can't sell Steam Keys (basically a coupon redeemable for the game on Steam) for cheaper than I sell the game on Steam's marketplace.
IMO, that's an important distinction. If they were demanding price parity with competing storefronts with their own launchers and DRM and whatnot, there would be a compelling argument for an antitrust case. The reality is not nearly that bad.
Someone got nuked for asking why the court is explicitly not allowing Gabe to wear an n95 mask. I think it's a legit question.
Weirdly , it seems to come down to some belief in the courts that lawyers can determine credibility through some combination of face and body language? I didn't realize courts still believed in that kind of thing, but then again, the notoriously mutable eyewitness testimony is still considered a gold standard for evidence apparently.
So first of all, they reject remote because they can't determine credibility over a camera:
> While other courts conclude that a deponent’s credibility can be comparably assessed
through remote means, see, e.g., Henry v. Tacoma Police Dept., 2023 WL 5530201, slip op. at 3
(W.D. Wash. 2023), this Court is not of that opinion.
And in that case, it was believed you can determine credibility better over camera with someone not wearing a mask, than you can with in person but wearing a mask:
> attorneys have a better opportunity to observe and assess witnesses who are deposed in person as compared to video depositions—particularly where the witness’ [sic] credibility is an issue.” Dkt. No. 71 at 5. To the extent that statement i s intended to demonstrate prejudice, it fails. To the contrary, “it may be easier for [Defendants] to evaluate the credibility of [a] witness who appears via video conference without a mask than it is to evaluate the credibility of a witness who wears a mask while testifying in person
This court decided no to both, they want the lawyers to be able to exercise their superhuman facial tic analysis skills in person and uninhibited apparently.
It's an interesting question in general, in particular since there's little distinction between an N95 and Gabe's beard in terms of how much of the underlying face you'd see.
But you're leaving out this part, which is quite critical:
> In hopes of alleviating Mr. Newell’s health concerns, the Court mandates
the following additional health measures: all participants (including questioning counsel) must
wear a tightly fitting certified N95, KF94, or KN95 face mask throughout the deposition. At his
discretion, Mr. Newell may provide those certified masks to participants. But Mr. Newell shall remove his mask when responding to questions from Plaintiffs’ counsel.
I.e. everyone else nearby will be required to wear a mask, and will presumably be far enough away to make COVID-19 transmission unlikely.
I left that out without even thinking about it, but it does bear further thought: in my experience, especially in the USA, no matter how explicitly instructions are given for covid precautions, they're largely ignored, or only perfunctory attempts to comply are made, e.g. a mask worn but only covering the mouth, with the nose exposed.
So I wonder how well everyone will actually comply with this court order after a few hours of deposition!
Your note about his beard is a great example of why it's frankly absurd for a lawyer to claim that they need someone in person, with a mask off, to accurately judge their competency.
>So I wonder how well everyone will actually comply with this court order after a few hours of deposition!
I mean, if there's any place I would not want to try my luck, it'd be in an airport, and in the courtroom. Easy way to be throw in contempt of court. I wouldn't compare a courtroom to some non-complier in the checkout line.
Well, you can find post-pandemic pictures of Gabe and his comically bad mask fit, given his full face beard. You can also find pictures of him in public without a mask post-pandemic.
So I think this was pretty much a transparent "can't I just do this bullshit over Zoom?", which the court saw through.
I'm pointing out that they are being accommodating to his concerns, if they're taken at face value. I bet if he requested being wheeled in in an airtight plexiglass phonebooth the court would at least entertain it.
While I don't think that lawyers possess some kind of superhuman "Paul Ekman / Lie To Me" style abilities, I do think that non-verbal communication, including facial expressions, could help to inform a lawyers line of questioning during a deposition.
Regarding appearing in person, someone appearing on video call could easily have cue cards off-screen or a team of lawyers giving them thumbs up/thumbs down etc.
Doing it this way removes at least some of those doubts surrounding fairness for the plaintiffs.
1. If someone files a suit, is a basic level of sense-checking done before the defendant is served and issued a summons? Basically I'm asking if someone could just file a lawsuit with absolutely no reason just to inconvenience someone else.
2. Can a court summon anyone to appear at any court anywhere in the country, or can the defendant choose to travel to their closest/most convenient court? (If the former, can the defendant claim travel expenses or similar?)
3. Is there a specific reason that in-person depositions are mandated in civil suits like this? It seems you could communicate everything you need to over video conferencing without having to be physically present, regardless of any COVID-type excuses.
Gabe probably just can't be bothered travelling and I don't blame him.
1. If filed by a lawyer, no. The clerk will just issue a summons.
2. In order to compel a person to appear a proceeding, the court must have personal jurisdiction over the person as a defendant, or if the person is a witness and not a defendant, they must be within the subpoena power of the court.
3. The order explains the court’s reasoning on this.
It seems bizarre to me that an assessment of credibility requires in-person contact or that the indie developers could demonstrate the required prejudice that "remote" participation would provide. Or that "remote" means pre-recorded and not real time interactive?
Gabe Newell of Steam is forced to testify, while the CEO of Microsoft is not. Guess who has more people involved in influencing politics? We can certainly debate steam’s fees but what steam does is a far cry from microsoft’s market dominance.
how can Steam possibly get hit with antitrust when Apple and Google are allowed to do whatever they want with their app stores while controlling the hardware/OS?
Because any given suit doesn't require bigger fish to be addressed first. Steam is in court because two indie devs decided to file suit. Those indie devs weren't required to wait their turn for worse examples of antitrust behavior to get dealt with first.
Yes, but Epic did battle Apple over the store thing. Epic lost on all fronts except the anti-steering rule: Epic is allowed to advertise their off-platform web store where they will sell you in-app-purchases for Fortnight without the Apple tax. Not sure if they offer higher-price versions of same purchases through Apple's store or you must do your shopping for skins and other silliness through Epic.
However, AFAIK the final appeal battle at the US supreme court hasn't happened yet.
The suit will almost certainly fail. In event that it doesn't it will almost certainly go to the supreme court. If the supreme court upholds this as an antitrust violation then that will certainly be true for iOS and Android as well as most likely PlayStation and Xbox.
I mean the simple reply to that is: por que no los dos? Steam getting hit with an antitrust suit and losing could also pave the way for Apple and Google being forced to reduce their extortive rates.
because they aren't? Apple has been hit over the years and may be forced to allow alternative storefronts. Google is still being sued by Epic over these exact things that they pay for on IOS.
They just aren't as high proile as Epic v. Apple. Probably for good reason given the shitshow that courtroom was.
Sort of? They don't let you sell stuff to run on iOS apps on alternate stores at all. Epic is going right to the supreme court over this. Epic has links in iOS FortNight to buy in-app-purchases on the Epic store (not Apple's store) so they don't have to pay the Apple tax.
Epic lost on every other anti-trust fight vs apple except this one - every appeals court has upheld Epic's freedom to direct iOS users who want to buy cosmetics for Fortnite into the Epic store, which violates their agreement with Apple.
The point is you can charge less in other avenues. The claim appears to be that steam does not let you do that, the equivalent would be apple saying you must pay the 15/30% cut on our store but you also can’t sell for a lower price on other platforms.
That said from other comments here I’m not sure how accurate/true that claim is.
The amount of service developers receive for hosting their game on Steam seems underappreciated. For their 30% cut they provide content delivery, news publication, networking services (for multiplayer), forums, Steam Workshop (for hosting and sharing mods and addons), and management and trading of in-game items. Is it worth the 30% cut? That's not up to me, but at least they're not just hosting your 25mb .apk file like the Play store et al.
