PC gamers win the first battle against Valve Corporation as £656m competition claim receives judicial approval
The UK specialist competition tribunal has certified the £656m legal claim against Valve brought by children’s rights campaigner, Vicki Shotbolt. This marks a significant first victory for the class of around 14 million PC gamers against Valve – the owner of popular gaming platform, Steam.
The claim alleges that Valve has abused its dominant position in the PC gaming market under UK competition law by imposing excessive commission charges and anti-competitive restrictions on game developers selling gaming titles on the Steam platform.
These excessive commission charges are passed onto consumers by way of increased prices for PC games and in-game content.
Ms Shotbolt, the class representative, asserts that Valve’s conduct has increased the prices of games across the entire market. Therefore the class is not limited to Steam users but also includes purchasers of PC games and downloadable content on other gaming platforms and distribution channels.
I read the article and I’m not sure what I’m missing.
Their claim is that Valve’s practices, such as the 30% platform fee are anti-competitive. The winners of the lawsuit would be the class of ‘People who have purchased games from Steam’ and the money that the lawsuit recovers would be paid to the class members.
I can’t see the downside of possibly winning some money and having cheaper games on Steam.
But the customers don’t see this. You buy a $60 brand new game on epic vs steam vs nintendo vs prime vs anywhere else: the game isn’t more expensive on steam because of their fees. The game is still $60, the publisher and studio make less money. In fact steam doesn’t even set prices, the publisher does. Steam takes 30% to use the platform. Is that too much? Maybe, but this doesn’t hurt the customer, this hurts the people wanting the profits, mostly the game publishers.
Taking this down to 10% won’t drop the price of the game, it reduces the amount of money steam gets. The publisher gets more money. That’s what changes. A few small indie games where the studio is also the publisher might drop the price, but they will be few and far between.
In a competitive market, companies on the supply side are price accepting, like people on the demand side. Gaming in general is relatively competitive.
If a company can sell a game for 60 EUR, they won’t sell it cheaper. If they can’t make it for that cost, they won’t sell it for more, they just won’t make it.
Costs of producing the game generally have no direct impact on the market price.
I think you’re right that thier commission won’t really effect the price of games at all, as that’s more driven by how much people can afford or are willing to pay for entertainment. It still could benefit gamers if the publisher/developer got more of the revenue from the games they purchased, as then the developers could more easily fund future development, especially indie games.
Yes for any game without a publisher. Most indie games use publishers so they can get paid while they’re making the game. It’s really only the games made in a basement on weekends that may see a price improvement.
Maybe, but this doesn’t hurt the customer, this hurts the people wanting the profits, mostly the game publishers.
Trying to argue that adding a 30% tariff to a good doesn’t cause the price to go up is nonsense. It is basic economics that a good which costs more will need to sell for more than a good that costs less.
I don’t know if you’ve been paying attention to geopolitics, but this argument has already played out in the real world and to the surprise of nobody, raising costs via tariffs raise the costs to the end consumer.
Your games cost more because of fees like this.
This price pressure freezes out smaller developers who, if they didn’t need to pay 30% of their gross revenue in fees, would otherwise have been able to run a successful business. Those small developers, which don’t exist, are not making games and that means less variety in the market places and more domination by the large AAA developers.
Trying to argue that adding a 30% tariff to a good doesn’t cause the price to go up is nonsense.
So why aren’t EGS exclusives, which only takes a 12% cut and the dev of such exclusives also get a massive monetary incentive to be exclusive to the platform from Epic, not any cheaper than their contemporaries on any other marketplace? 🤔
Edit: Holy shit with the quintuple post hiccup 😵💫 Did not mean to spam; app just took a shit on me.
So why aren’t EGS exclusives, which only takes a 12% cut and the dev of such exclusives also get a massive monetary incentive to be exclusive to the platform from Epic, not any cheaper than their contemporaries on any other marketplace? 🤔
I don’t know, I can only speculate. EGS makes a lot of decisions where they lose money on purpose in order to try to grow their business so their practices don’t always fit neatly into a simple economics model. For example, giving away games for free isn’t a rational business decision on the face, but they’ve decided that the future benefits will outweigh the costs.
If I had to guess a single reason. I would say that this is likely because AAA games have all essentially coalesced around specific price points. If a game is selling for 59.99 everywhere, then you’d certainly try to sell your game for 59.99 also. If you’re selling with 12% fees ($52.80/unit) and they’re selling with 30% fees ($42/unit) then your company is making more money and you’re in a more favorable position should the competition try to lower prices to take your market share.
Selling for less than the market prices wouldn’t make sense and the market price for all of this is primarily based on how Steam operates. Since Steam is the largest distributor, all price decisions are going to be primarily based on a market where prices include the 30% fee because the largest volume of, most, games’ sales are through Steam.
This lawsuit may not go anywhere, but there is no world where we, the consumer, are hurt by Steam being challenged on their pricing model. The only outcomes here are pro-consumer and pro-indy developer (the people most price sensitive and so most affected by these fees as a percentage of total revenue).
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I read the article and I’m not sure what I’m missing.
Their claim is that Valve’s practices, such as the 30% platform fee are anti-competitive. The winners of the lawsuit would be the class of ‘People who have purchased games from Steam’ and the money that the lawsuit recovers would be paid to the class members.
I can’t see the downside of possibly winning some money and having cheaper games on Steam.
But the customers don’t see this. You buy a $60 brand new game on epic vs steam vs nintendo vs prime vs anywhere else: the game isn’t more expensive on steam because of their fees. The game is still $60, the publisher and studio make less money. In fact steam doesn’t even set prices, the publisher does. Steam takes 30% to use the platform. Is that too much? Maybe, but this doesn’t hurt the customer, this hurts the people wanting the profits, mostly the game publishers.
Taking this down to 10% won’t drop the price of the game, it reduces the amount of money steam gets. The publisher gets more money. That’s what changes. A few small indie games where the studio is also the publisher might drop the price, but they will be few and far between.
It most definitely cost the customer more.
What your describing us not how pricing and economics works.
In a competitive market, companies on the supply side are price accepting, like people on the demand side. Gaming in general is relatively competitive.
If a company can sell a game for 60 EUR, they won’t sell it cheaper. If they can’t make it for that cost, they won’t sell it for more, they just won’t make it.
Costs of producing the game generally have no direct impact on the market price.
I think you’re right that thier commission won’t really effect the price of games at all, as that’s more driven by how much people can afford or are willing to pay for entertainment. It still could benefit gamers if the publisher/developer got more of the revenue from the games they purchased, as then the developers could more easily fund future development, especially indie games.
Yes for any game without a publisher. Most indie games use publishers so they can get paid while they’re making the game. It’s really only the games made in a basement on weekends that may see a price improvement.
Trying to argue that adding a 30% tariff to a good doesn’t cause the price to go up is nonsense. It is basic economics that a good which costs more will need to sell for more than a good that costs less.
I don’t know if you’ve been paying attention to geopolitics, but this argument has already played out in the real world and to the surprise of nobody, raising costs via tariffs raise the costs to the end consumer.
Your games cost more because of fees like this.
This price pressure freezes out smaller developers who, if they didn’t need to pay 30% of their gross revenue in fees, would otherwise have been able to run a successful business. Those small developers, which don’t exist, are not making games and that means less variety in the market places and more domination by the large AAA developers.
So why aren’t EGS exclusives, which only takes a 12% cut and the dev of such exclusives also get a massive monetary incentive to be exclusive to the platform from Epic, not any cheaper than their contemporaries on any other marketplace? 🤔
Edit: Holy shit with the quintuple post hiccup 😵💫 Did not mean to spam; app just took a shit on me.
The post button did you dirty.
I don’t know, I can only speculate. EGS makes a lot of decisions where they lose money on purpose in order to try to grow their business so their practices don’t always fit neatly into a simple economics model. For example, giving away games for free isn’t a rational business decision on the face, but they’ve decided that the future benefits will outweigh the costs.
If I had to guess a single reason. I would say that this is likely because AAA games have all essentially coalesced around specific price points. If a game is selling for 59.99 everywhere, then you’d certainly try to sell your game for 59.99 also. If you’re selling with 12% fees ($52.80/unit) and they’re selling with 30% fees ($42/unit) then your company is making more money and you’re in a more favorable position should the competition try to lower prices to take your market share.
Selling for less than the market prices wouldn’t make sense and the market price for all of this is primarily based on how Steam operates. Since Steam is the largest distributor, all price decisions are going to be primarily based on a market where prices include the 30% fee because the largest volume of, most, games’ sales are through Steam.
This lawsuit may not go anywhere, but there is no world where we, the consumer, are hurt by Steam being challenged on their pricing model. The only outcomes here are pro-consumer and pro-indy developer (the people most price sensitive and so most affected by these fees as a percentage of total revenue).
Valve has a price parity policy.
They have a price parity policy for Steam keys.
If you release your game elsewhere as a Steam key, you agree not to sell it for less than you do via Steam itself.
Not to mention EGS exclusives aren’t even ON Steam, and do not even have to worry about the Steam Key policy. 🤦♂️
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The only ones that won here are the lawyers. Simple as that.