7 ms·

Steam uses outsized market power to take an enormous %30 cut so it also does major damage to the games industry.

SXX 9mo ago
This. As game developer this is a huge problem since outside of top 1% industry is shit poor and platforms squeeze it badly. Unfortunely needs of game developers and customers are not exactly align. Valve is good steward of their outsized market share when it's comes to gamers interests. Epic Games tried to shake market with "gamers dont matter" policy (no reviews, no community, worse services) and low fees and failed miserably. As game developer I'd love to see platform fee of 10%, but as gamer I dont want to buy my games and give power to Tencent, Microsoft or Google. I could only dream that customer-first platform not owned by VC / PE money like GOG could compete with Steam. Unfortunately unlikely to happen.
TulliusCicero 9mo ago
The 30% cut is standard, and was so at retail even before Steam existed IIRC.
- ThrowawayR2 9mo ago
  And the cut can't be lower? The rush to defend Valve's monopoly is so weird since HN usually hates fat cat billionaires. Valve is raking in so much money as a middleman that Gabe Newell has ~$1 billion worth of yachts alone, in addition to the rest of his wealth, yet gamers want Valve to keep on bleeding them and game studios?
  - chii 9mo ago
    > And the cut can't be lower? why should it be lower (or higher)? steam's cut should be whatever they set, and the market responds. The natural equilibrium would get reached. The value steam provides, imho, certainly justifies their cut imho. There's plenty of other platforms to release games on - including free ones (such as itch.io, or your own website).
    - esrauch 9mo ago
      The main claim here is that it is a defacto monopoly, and that there are not "plenty of other platforms", since none of those platforms actually have any reach. It results in most games smaller than Fortnight or Blizzard having literally no choice but to use steam regardless of policy or cut. Any time you have no choice it at least makes for a very warped market.
      - chii 9mo ago
        > since none of those platforms actually have any reach. so really, this is about getting reach, and that a 30% cut for said reach is too high. I am arguing that this price is a market price, for which it is justified by mere existence. If this price was too high, then these other platforms that you claim have no reach will get some reach, since the PC platform is not locked down (yet). Unlike in the model of apple's app store (until recently at least?), which has no alternative possible. Even android's supposed alternative is somewhat going to get locked down by google looking at the trend. Then the claim would be that those platforms hold not only a defacto monopoly, but an actual one, and their cut is therefore not a real market price. That makes it possible to claim that they're unfairly pricing their platform. Steam doesn't have this issue at all.
        qwytw 9mo ago
        That's not exactly how markets generally work ("free market" is more of a theoretical concept than something that has ever existed outside of commodity markets at least). In a way it can be justified in the sense that developers would rather get 70% than not make a sale at all if their games were only available on less popular platforms. But effectively that's what allows Steam to charge charge as much. They certainly have a dominant position in the market due to very little competition. It's like retail/supermarket chains in certain countries being able to extort better conditions from their suppliers because they have very little choice. Or e.g. real estate agents being able to charge disproportionally high fees due to how the market is structured. Whether someone considers that fair or not is of course rather subjective... > Steam doesn't have this issue at all. IMHO it's a matter of degree but fundamentally the same thing. The barriers to switching to a different store are just much lower than not having an Apple/Google phone but they still exist.
  - krige 9mo ago
    Ah yes the Tim Sweeney argument. Get a better service with a lower cut, sure. Why does nobody do that? They must be stupid.
    - ThrowawayR2 9mo ago
      It's more like the Year Of Linux On The Desktop argument. Why doesn't Linux just provide better features and TCO and unseat Windows? According to the parent poster, "They must be stupid."
  - ThatMedicIsASpy 9mo ago
    The cut lowers to 25% after $10mio and 20% after $50mio iirc. I can defend steam and its (key) features I need/use (Controllers, Linux gaming, Linux improvements) I cannot defend valves gambling casino. I also cannot say it's a monopoly.
  - TulliusCicero 9mo ago
    > The rush to defend Valve's monopoly is so weird since HN usually hates fat cat billionaires. Yes, almost like there's an actual difference between Valve and typical other corporations? Ha ha just kidding, it must be random internet nonsense, definitely not worth applying any brain cells to! The simple reality is that Valve is just a lot nicer to their customers in terms of behavior and utility than the overwhelming majority of companies, and that means many people cut them more slack for other things. People are willing to forgive a large cut if it feels like you're actually trying to provide an ever-more-useful service, rather than coasting on the bare minimum. Steam isn't just a little bit better than competing stores/platforms, it's MONUMENTALLY better, and the gap is probably increasing rather than shrinking over time, because other stores don't look like they're even trying in comparison.
- Jach 9mo ago
  Besides being standard, it's also reasonable solely for game developers not having to worry about chargebacks and financial fraud at all. Let alone all the other stuff your game gets, and stuff your game has the option of making use of (like network infrastructure for multiplayer games).
- qwytw 9mo ago
  Of course compared to retail its a great deal but that's because of the huge number of middlemen involved in shipping a game/software back then. It's not like retailer margins were that great. The 30% is mostly arbitrary though, IMHO had apple decided to charge 20% or 25% when the appstore came out that would have become the industry standard.
user____name 9mo ago
On top of their very frequent predatory pricing sales. -90% who the hell can or wants to compete with that? But hey the gamers love it.
- immibis 9mo ago
  That's called market segmentation. The people who either ignore the game or pirate it when it's full price - well they're trying to at least get some money out of those people. That's how sales work in general.

SXX 9mo ago

This. As game developer this is a huge problem since outside of top 1% industry is shit poor and platforms squeeze it badly. Unfortunely needs of game developers and customers are not exactly align. Valve is good steward of their outsized market share when it's comes to gamers interests. Epic Games tried to shake market with "gamers dont matter" policy (no reviews, no community, worse services) and low fees and failed miserably. As game developer I'd love to see platform fee of 10%, but as gamer I dont want to buy my games and give power to Tencent, Microsoft or Google. I could only dream that customer-first platform not owned by VC / PE money like GOG could compete with Steam. Unfortunately unlikely to happen.

TulliusCicero 9mo ago

The 30% cut is standard, and was so at retail even before Steam existed IIRC.

ThrowawayR2 9mo ago
And the cut can't be lower? The rush to defend Valve's monopoly is so weird since HN usually hates fat cat billionaires. Valve is raking in so much money as a middleman that Gabe Newell has ~$1 billion worth of yachts alone, in addition to the rest of his wealth, yet gamers want Valve to keep on bleeding them and game studios?
- chii 9mo ago
  > And the cut can't be lower? why should it be lower (or higher)? steam's cut should be whatever they set, and the market responds. The natural equilibrium would get reached. The value steam provides, imho, certainly justifies their cut imho. There's plenty of other platforms to release games on - including free ones (such as itch.io, or your own website).
  - esrauch 9mo ago
    The main claim here is that it is a defacto monopoly, and that there are not "plenty of other platforms", since none of those platforms actually have any reach. It results in most games smaller than Fortnight or Blizzard having literally no choice but to use steam regardless of policy or cut. Any time you have no choice it at least makes for a very warped market.
    - chii 9mo ago
      > since none of those platforms actually have any reach. so really, this is about getting reach, and that a 30% cut for said reach is too high. I am arguing that this price is a market price, for which it is justified by mere existence. If this price was too high, then these other platforms that you claim have no reach will get some reach, since the PC platform is not locked down (yet). Unlike in the model of apple's app store (until recently at least?), which has no alternative possible. Even android's supposed alternative is somewhat going to get locked down by google looking at the trend. Then the claim would be that those platforms hold not only a defacto monopoly, but an actual one, and their cut is therefore not a real market price. That makes it possible to claim that they're unfairly pricing their platform. Steam doesn't have this issue at all.
      - qwytw 9mo ago
        That's not exactly how markets generally work ("free market" is more of a theoretical concept than something that has ever existed outside of commodity markets at least). In a way it can be justified in the sense that developers would rather get 70% than not make a sale at all if their games were only available on less popular platforms. But effectively that's what allows Steam to charge charge as much. They certainly have a dominant position in the market due to very little competition. It's like retail/supermarket chains in certain countries being able to extort better conditions from their suppliers because they have very little choice. Or e.g. real estate agents being able to charge disproportionally high fees due to how the market is structured. Whether someone considers that fair or not is of course rather subjective... > Steam doesn't have this issue at all. IMHO it's a matter of degree but fundamentally the same thing. The barriers to switching to a different store are just much lower than not having an Apple/Google phone but they still exist.
- krige 9mo ago
  Ah yes the Tim Sweeney argument. Get a better service with a lower cut, sure. Why does nobody do that? They must be stupid.
  - ThrowawayR2 9mo ago
    It's more like the Year Of Linux On The Desktop argument. Why doesn't Linux just provide better features and TCO and unseat Windows? According to the parent poster, "They must be stupid."
- ThatMedicIsASpy 9mo ago
  The cut lowers to 25% after $10mio and 20% after $50mio iirc. I can defend steam and its (key) features I need/use (Controllers, Linux gaming, Linux improvements) I cannot defend valves gambling casino. I also cannot say it's a monopoly.
- TulliusCicero 9mo ago
  > The rush to defend Valve's monopoly is so weird since HN usually hates fat cat billionaires. Yes, almost like there's an actual difference between Valve and typical other corporations? Ha ha just kidding, it must be random internet nonsense, definitely not worth applying any brain cells to! The simple reality is that Valve is just a lot nicer to their customers in terms of behavior and utility than the overwhelming majority of companies, and that means many people cut them more slack for other things. People are willing to forgive a large cut if it feels like you're actually trying to provide an ever-more-useful service, rather than coasting on the bare minimum. Steam isn't just a little bit better than competing stores/platforms, it's MONUMENTALLY better, and the gap is probably increasing rather than shrinking over time, because other stores don't look like they're even trying in comparison.
Jach 9mo ago
Besides being standard, it's also reasonable solely for game developers not having to worry about chargebacks and financial fraud at all. Let alone all the other stuff your game gets, and stuff your game has the option of making use of (like network infrastructure for multiplayer games).
qwytw 9mo ago
Of course compared to retail its a great deal but that's because of the huge number of middlemen involved in shipping a game/software back then. It's not like retailer margins were that great. The 30% is mostly arbitrary though, IMHO had apple decided to charge 20% or 25% when the appstore came out that would have become the industry standard.

user____name 9mo ago

On top of their very frequent predatory pricing sales. -90% who the hell can or wants to compete with that? But hey the gamers love it.

immibis 9mo ago
That's called market segmentation. The people who either ignore the game or pirate it when it's full price - well they're trying to at least get some money out of those people. That's how sales work in general.