Steam Steam Hit with Class Action Lawsuit, Alledging Monopolistic Practices

[Husky_Khan]

The lawsuit was brought against Valve, which owns Steam, by one video game publisher in San Francisco, Wolfire Games and on behalf of two PC Gamers, Florida Man William Herbert and New Yorker Daniel Escobar (no relation to the Drug Lord... probably).

Wolfire Games, a video game publisher in San Francisco, entered into Steam Distribution Agreements with Valve so that its games could be compatible with the popular Steam Gaming Platform, the claim states. In order to have a game on the Steam platform, publishers must agree to sell games through the Steam Store.

“As a result of Defendant’s anticompetitive practices, Wolfire Games has paid supracompetitive commissions to Valve.”

Florida resident William Herbert and New York local Daniel Escobar are both PC gamers who have bought games through the Steam Store, and say in the class action lawsuit that they have also paid “supracompetitive prices for PC Desktop Games.”

According to the claim, 75% of PC game sales are made through Steam and nets Valve $6 billion dollars in sales annually off of their 30% commission. The lawsuit also alledges, in spite of alternative online game distributors such as Epic Games, Microsoft, Uplay, Amazon, Gog.com, Humble Bundle, etc etc etc etc etc, Valve's abuse of market power has caused its potential rivals to fail... or something.

Valve CEO to testify in Steam antitrust lawsuit filed by Wolfire Games

Valve Games suppresses innovation in the gaming market and is harming both gamers and game developers with its anticompetitive practices, a new class action lawsuit claims.

topclassactions.com

 

[PsihoKekec]

Ignore the Epic Games behind the curtain.

 

[ShadowArxxy]

It's hilariously greedy claiming Steam charges excessive commissions when Steam literally turned the gaming market upside down with 30% commissions versus the previous market norm of 70% commissions, and their only evidence that Steam commissions are "excessive" is the assertion that commissions might hypothetically be lower if Steam wasn't charging 30%.

 

[Emperor Tippy]

Steam, IIRC, doesn't even offer Steam exclusivity deals much less require it.

Anyone who doesn't violate steams relatively loose policies is free to offer any game that doesn't violate those policies at the same price.

I mean Steam is like the least monopolistic of any of the "big tech" companies, especially in the gaming space. And it's not like any of their competition is actually undercutting them on price.

 

[Marduk]

"If we want to use Valve's distribution service, we have to pay Valve, what an injustice!"
Yeah, it sounds stupid, and that in turn sounds a lot like the complaints Epic Games makes about this sort of things.

“Game publishers are forced to use the Steam Store and give Valve 30% of nearly every sale if they want to gain access to the Steam Gaming Platform—access they need in order to sell,” the claim states,

That claim is getting laughed out of court.

Despite a number of other game stores trying to crack the market with lower fees, including Electronic Arts (“EA”), Microsoft, Amazon, and Epic, Valve’s “abuse of market power” — whereby games must be listed on its platform to reach the majority of gamers — has led each to fail, the class action lawsuit claims.

How odd for Epic's proxy lawsuit to state that EGS is a failure while also ignoring the GOG in the room.

 

[ShadowArxxy]

Steam, IIRC, doesn't even offer Steam exclusivity deals much less require it.

They don't, but the Steam sales agreement does include a clause where developers agree that they won't sell on other digital platforms for a lower *list* price than they offer on Steam. This does not in any way restrict sales and promotional offers, however, and the actual price is entirely up to the dev.

And it's not like any of their competition is actually undercutting them on price.

The legal argument they're making is that were it not for the equal list price clause, a hypothetical developer could hypothetically offer a lower list price on a rival platform, particularly if that rival platform charged a lower commission percentage.

 

[Marduk]

The legal argument they're making is that were it not for the equal list price clause, a hypothetical developer could hypothetically offer a lower list price on a rival platform, particularly if that rival platform charged a lower commission percentage.

Yup. It is critical to their strategy. Which is:
1. We can't compete with Steam on quality of service to customers, because we are bound by China politics, and that, plus our hunger for shady deals with suppliers, creates several reasons for why we can't have open user reviews, forums, and workshop equivalent.
2. What we can do to compete is undercut Steam on prices, possibly with help from shady deals with suppliers.
3. But if a game is not on Steam, then it gets no Steam forum, no Steam workshop, and no eyes on product from Steam's massive user base, who can't read Steam user reviews on top of that. Due to 1, we can't replicate these functions on our own. Which technically would be easy, but because of politics, we can't, period. And that hurts the sales of any games that would stick with just us compared to sticking with Steam, while dual platforming means too many sales go to Steam rather than us because of legally forced equal price combined with better services and platform popularity.
4. Hence let's try a long shot lawsuit to try and make Steam provide us and our friends all these things we can't, but at the same time make sure that the price for the game in question is so high on Steam that most people won't buy it there. If we feel bold we can even make it a downright barrier price, so that everyone will come to EGS to actually buy the game, while Steam has to provide most of the extras it provides to "normal" suppliers and customers also to all EGS customers and suppliers while getting a cut from hopefully just a very tiny fraction of sales when it comes to EGS&friends games due to the price difference favoring buying these games on EGS. Then we can make big money even with a smaller cut from a lot of sales, despite not providing these extras to anyone ourselves, and make Steam pay for these extras for extra lulz.

Obviously now you can see that the most obvious obstacle stopping this clever but rather unfair plan from implementation, at least in full and long term scale, is Steam's equal list price clause.

The counterargument is going to be that of course they can price their games whatever they want if they don't demand to be listed on Steam at the same time, as Steam does not owe them near free marketing and support services just for existing, especially those who want to treat Valve as second rate partner in sales.

 

[S'task]

Yeah, I'm not seeing the Monopolistic Practices... unless Steam somehow made all the alternatives to their market and interface suck... made them include terrible DRM or other such stuff...

Also, yeah, putting money on Epic Money being behind this, and given that where Epic is Tencent is, and where Tencent is the CCP is... yeah...

 

[ShadowArxxy]

The other key point is that this lawsuit isn't just against Valve -- the lawsuit also names a seemingly random selection of the developers who do business with Valve, claiming that their willingness to contract under Valve's terms constitutes wilful collusion with Valve's alleged monopoly.

(That doesn't make any sense until you realize that if the court accepted this logic, it would set a precedent for *forcing* developers to do business with Epic, and more specifically, *forcing* them to set lower list prices on Epic as long as their bottom-line commission is equal. In other words, this blatantly astroturfed case is signaling the absolute failure of Epic's current business model of de facto bribing developers for exclusives.)

 

[Robovski]

I guess the free candy, er games, aren't enough to get all the kids into the Epic van.

 

[PsihoKekec]

Kids are just snatching the free candy and running away.

 

[Battlegrinder]

Why can't epic do normal things with all thier fortnite money, like buying expensive cars and throwing absurdly lavish parties or something?

 

[Bear Ribs]

I wish they could. Honestly I've been following Epic as a customer for over 30 years, I started out with them downloading ZZT for goodness sakes. Its painful to see them devolve to this. I've heard it said many times before though, and I believe it: You can tell when a company runs out of innovation and creativity, because suddenly they become extremely litigious and try to use lawyers to get their way instead of creating anything new or innovating.

At least I have a fat stack of free games out of it.

 

[S'task]

I wish they could. Honestly I've been following Epic as a customer for over 30 years, I started out with them downloading ZZT for goodness sakes. Its painful to see them devolve to this. I've heard it said many times before though, and I believe it: You can tell when a company runs out of innovation and creativity, because suddenly they become extremely litigious and try to use lawyers to get their way instead of creating anything new or innovating.

At least I have a fat stack of free games out of it.

Holy crap... someone ELSE remembers ZZT?!

 

[Bear Ribs]

Holy crap... someone ELSE remembers ZZT?!

I made a heck of a lot of ZZT games back in the day, I was pretty active in the old community.

I'd contemplated doing a Let's Play of it here but I didn't think it would generate any interest after my last try at it on these forums, I don't think we have people interested in those here.

 

[S'task]

I made a heck of a lot of ZZT games back in the day, I was pretty active in the old community.

I'd contemplated doing a Let's Play of it here but I didn't think it would generate any interest after my last try at it on these forums, I don't think we have people interested in those here.

Not sure ZZT lends itsself to Let's Plays... but yeah, ZZT was probably the first game that exposed me to the idea of a "level editor" end user content creation. I played around with making a few maps, but I was a kid and so kept them all to myself.

 

[Bear Ribs]

Yeah, perhaps I'll just drop a Rib Review of ZZT instead.

 

[Aaron Fox]

Well, back in the day Steam did had some competition in the form of Impulse, aka what originally was Stardock's answer to Steam. Got bought out by GameStop and basically got ruined.

I should know, some of my most interesting games are on Impulse.

 

[BlackDragon98]

Kids are just snatching the free candy and running away.

Us Gen Z are pretty smart in some cases.

Like speaking of Epic Games, I remember this one time there was the BLM speaker thing on Fortnite where there was a screen in game broadcasting the whole thing (I don't play the game myself, my friend told me about it) and some developer had the great idea of putting a dispenser full of tomatoes right beside the screen.

You can guess what happened next . . .

 

[BlackDragon98]

Why can't epic do normal things with all thier fortnite money, like buying expensive cars and throwing absurdly lavish parties or something?

Because Comrade Chairman Winnie told them that they can't have nice things and must work harder for Comrade Chairman Mao's vision.