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The points linked above allege Valve will delist a game from their platform if the price is lower off-platform (even for non-key sales), correct?
This is called a “Platform Most Favored Nation” clause, and it has anti-competitive effects. It is controlling the price off-platform using the leverage of market share to coerce behaviors out of publishers.
Please also link me this European court case, I have been unable to locate it myself.
It’s an ongoing case, so I don’t know what you expect of me here. My reply was to correct your misunderstanding about the focus of the case, which is not limited to the use of steam keys as you originally claimed.
I am not aware of the european case you reference, would you mind pointing me to where I can learn more?
If that is demonstrably true, I’d like to see the demonstration. In fact, the case alleges the policy extends to non-key sales (see pts 204, 205, 207, 208).
I like Wolfire. Their head (David Rosen) had a really good procedural animation talk at GDC about a decade ago, their games are pretty good, and they started up Humble before it spun off on its own.
Before tarnishing their reputation, I’d suggest reading up on the actual complaints put forth in the lawsuit. I’ve done so extensively, I think they have very solid grounds to go after Valve (Valve’s behaviour is comparable to Amazon’s in terms of anticompetitive practices).
This is demonstrably wrong. The 30% cut is standard because Steam has used the same strategy as Amazon to fix prices across the market (a “Platform Most Favored Nation” clause—see the Wolfire Games v. Valve class action, specifically items 204 and 205 on pg 55). Competing storefronts cannot undercut Steam, so why would they take less than a 30% cut?
Epic Games Store—which is trying to undercut steam at a 12% fee—still list games at the same price as on Steam because of Valve has strongarmed publishers into fixing the prices. If Epic is charging 18% less but Valve is stopping publishers from reducing the game cost by that much, how is that not blatantly anti-competitive and anti-consumer?
enshitifies
Oh good, you are familiar with Cory Doctorow. He has an article on how Amazon abuses their position using the exact same playbook Valve uses.
You have to have never seriously engaged with the details of the Valve monopoly if you think that’s what we are upset about.
We know Steam is an amazing storefront—I buy my games there because it’s the best experience for the cost. But Steam charges a premium. And despite taking smaller cuts, competing platforms like Epic cannot actual pass those cost savings to consumers because Valve is strongarming game publishers into fixing prices.
Yep. Because honestly, Steam is better than Epic in almost every way. When you want to buy a particular game X, you get a lot more from your purchase if it’s on Steam (workshop, friends, multiplayer, etc.). There is strong inertia and network effects that keep us all preferring Steam.
Epic can’t compete with the Steam experience. But if Epic was able to list everything 18% cheaper (the difference in fees between Epic and Steam)—then they would rightly be able to compete on price.
“Platform Most Favored Nation”. It’s a type of clause in platform/marketplace agreements that prohibit a seller from listing their product for a lower price on a different sales platform. Specifically, it prevents selling on a different marketplace with lower fees (e.g. Epic Games or a publishers own website) and passing the difference as savings to the consumer.
CSGO cases pulled $1 billion revenue in 2023. The steam store brought in $8.5 billion in that same year. That’s a 30% cut of all sales traffic on steam vs. in-game loot crates on a single title.
Loot boxes pull insane numbers. And yes they exploit children and problem gamblers. Love to see so many Valve fans downvote you :/
Sigh… I’m getting tired of the Valve apologetics in every thread. They make good products, yes. They also abuse their market share to implement anticompetitive policies. The first doesn’t absolve them of the second.
Truth is, no one has any idea what it would look like if there were actual competition among the PC games platforms. Steam may be the best possible world, or maybe we don’t know what we’re missing.
To learn more about Steam’s anticompetitive practices:
- See the complaint from the pending class action case Wolfire Games v. Valve (at a minimum items 204, 205 on pg. 55) for how Steam’s PMFN clause affect publisher pricing.
- See Cory Doctorow’s Amazon’s financial shell game let it create an “impossible” monopoly as a starting point for how a PMFN affects the market unfairly and harms the consumer.
Fanatical and humble bundle (the good old days) are good examples.
Incidentally Wolfire Games—the studio that founded Humble (but no longer operates it)—is currently in class-action litigation against Valve for this very issue.
I don’t know what you say “non-discounted”, cheaper is cheaper no matter what.
The Steam Distribution Agreement AFAIK allows temporary sales on other platforms to undercut Steam, but requires the “resting” price matches that on Steam. By specifying “non-discounted” I meant to indicate that although sales do exist on other platforms, the normal price of an item always matches on Steam. A quick few spot checks show the non-sale price of games on Humble, Steam, and Fanatical are equal.
“Cheaper is cheaper” kind of overlooks the core issue. Ultimately a publisher on Epic Games Store—which has a fee of 12% instead of Steam’s 30%—can have a lower price for a game as part of a promotion, but can’t just sell every game 18% cheaper always without violating Steam’s terms and being risk being de-listed.
Steam doesn’t get a cut from keys sold in perfectly legal thirth party stores like fanatical, humble or gmg. Epic does not sell steam keys so obviously no.
Okay, gotcha. Yeah, I misunderstood. For Steam Keys it’s pretty clear that Valve should be able to control the price since they provide the services after that key is purchased.
But the PMFN applies to all copies, even those distributed outside of Steam (e.g. the direct-from-publisher option I mentioned). Last time I was in a thread on this, another user found the following in the complaint (page 55) from the Wolfire v. Valve case mentioned above:
- TomG also explained to another game publisher that the publisher should “[t]hink critically about how your decisions might affect Steam customers, and Valve. If the offer you’re making fundamentally disadvantages someone who bought your game on Steam, it’s probably not a great thing for us or our customers (even if you don’t find a specific rule describing precisely that scenario).” In that same thread, TomG responded to a question by stating: “we usually choose not to sell games if they’re being sold on our store at a price notably higher than other stores. That is, we’d want to get that lower base price as well, or not sell the game at all."
- In response to one inquiry from a game publisher, in another example, Valve explained: “We basically see any selling of the game on PC, Steam key or not, as a part of the same shared PC market- so even if you weren’t using Steam keys, we’d just choose to stop selling a game if it was always running discounts of 75% off on one store but 50% off on ours. . . .”
To add an example:
Take Cities: Skylines II. It’s listed at $50 on Steam, $50 direct from Paradox. If Steam is taking 30% cut, Paradox sees $35 from each sale. Why is Paradox not listing the game at $40? They would earn an extra $5 per sale, and draw more sales.
They have every economic reason to undercut Steam, but they aren’t. Like seriously, if not the PMFN, then what’s the explanation?
I guess I’m confused. Are you contesting that the PFMN clause has an effect or not? Whether that effect is anticompetitive?
Find me a game that has been de listed from Steam because it was sold cheaper elsewhere. You can’t, so don’t bother.
I’m not going to dig through the web for an example of enforcement (which are not likely to be published anyway), when the only relevant matter is whether the PMFN clause exists. You can count every instance of a direct-from-publisher listing not being ~≤30% cheaper than the Steam listing as evidence that all you need is the threat of enforcement.
There is no reason in a market without this PMFN clause that a publisher wouldn’t sell the game at equal or higher margin off-Steam.
You can find games sold cheaper than in Steam in many places. You can even buy games outside of Steam and they see 0 revenue from it.
I would genuinely love if you could point me to an example where the non-discounted price of a game is lower outside of Steam than it is on Steam — I’d love to buy my games cheaper lol.
they see 0 revenue from it
This part confuses me. Are you trying to clarify to me that Steam isn’t taking a 30% cut of what gets sold on, say, Epic Games Store?
That’s not how monopolistic marketplaces like Steam (and Amazon) operate, though. They have “Platform Most Favored Nation” (PMFN) clauses in their terms that mean products sold on the platform can’t be sold cheaper elsewhere…
Which means the whole “pass it on to the consumer” can’t happen, unless a product risks being de-listed from Steam. It literally removes the ability to compete on price.
Additionally, there’s the usability hurdle of interacting with non-home instances from outside mastodon. If I pull up someone’s blog and click the little mastodon social media icon, it may very well link to mastodon.world. If my home instance is mastodon.social, now I have to launch into my own server, search up the account, and then begin interacting.
It’s trivial to do but it is an extra step, but for your less-tech-literate friends and family it can be a point of confusion. Mastodon handles federation great in-ecosystem, but the broader web is still going to treat each instance as a different site.
I’m at my wits end trying to explain this. I guess I can just recommend reading the legal briefs that summarize the matter, or articles that dig deeper than this one.
Maybe I’ll think about it later and make a more complete write up with concrete examples. I really hate to see the confusion here. Wolfire is doing us a favor, we should not be handing Valve the keys to the market just because they act like Mr. Benevolent.
What Wolfire wants to happen is for game marketplaces and game services platforms to be decoupled. Right now Valve has vertically integrated the two. You buy the game, and they offer peer multiplayer, social, workshop, etc.
If those services were charged separately, so that the costs of those services was not forced into the pricing of other marketplaces that don’t offer those services, you open the market to more competition.
Note that the main argument Wolfire is making is that game marketplaces (buy/download the game) and game platforms (online features, mod distribution, social pages) need to be decoupled. By integrating the two, Steam is vertically integrating, amortizing the cost, and then forcing every other marketplace to bear the cost of a platform in their pricing.
If you bought a game and paid for platform services separately, then competition can better exist for both of those roles. Which is good for consumers.
Steam has a large userbase, which offers a lot of consumer inertia to prefer games on Steam. They also have a policy where game pricing on other platforms cannot undercut Steam.
The main complaint is that this pricing policy coupled with the consumer inertia makes it difficult for other gaming marketplaces to enter the market. You cannot undercut steam unless a publisher wants to not put their game on Steam at all (which would be suicide for anything but the largest titles), so you have to sell at Steam’s price point. Few platforms could match Steams’ established workshop, multiplayer, streaming, and social services; all of which benefit from costs at scale and the established user content.
Imagine trying to convince a user: “Buy your game here instead. It will cost the same as on Steam. No, you won’t have access to the existing Workshop. No, you won’t have in-platform multiplayer with your Steam friends.” Even if you had feature parity, people would prefer Steam since that’s where their existing games and friends are.
As I said, Steam would be in their rights to enforce that pricing policy for Steam keys, because they provide distribution and platform services for that product after it sells.
But as @Rose clarified, it applies to not just Steam keys, but any game copy sold and distributed by an independent platform. Steam should not have any legitimate claim to determining the pricing within another platform.
Valve offers a great service, and I enjoy it a lot. But it’s very difficult for a competitor to enter the market because they won’t be able to match Steam’s services immediately. Typically in a market the approach is then to undercut Steam, but that is exactly what this policy is designed to make impractical by forcing publishers to overprice, on penalty of losing Steams’ userbase.
I mean I don’t know what else to say. It is anti-competitive. It doesn’t take too much to see why. There are many good articles and legal briefs on the matter. It hurts you and me, the consumer, and it hurts publishers. It enriches Valve, benevolent though they may appear. You shouldn’t like this type of strong-arming the market when Amazon does it, and you shouldn’t roll over and take it from Valve either.
Doesn’t even matter, the court is going to sort it out for us. But I hate to see the reputational hit Wolfire is taking here. I like their studio, I believe their developers are operating in genuine good faith, and I think they are doing consumers a favor.
I was under the impression that the policy required a game’s price to be the same on all marketplaces, even if it’s not a steam key being purchased. I.e. a $60 game on steam must sell for $60 off-platform, including on the publisher’s own launcher.
I just went to double check my interpretation, but the case brief by Mason LLP’s site doesn’t really specify.
If it only applies to steam keys, as you say, then I agree they don’t really have a case since it’s Steam that must supply distribution and other services.
But, if the policy applies to independent marketplaces, then it should be obvious that it is anticompetitive. The price on every platform is driven up to compensate for Steam’s 30% fees, even if that particular platform doesn’t attempt to provide services equivalent to Steam.
Again, I am really wanting to see this EU case you reference, because this is an issue I have been reading up on. Do you have a reference for me?