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[Durante]

Because it's the industry standard, and because they offer a lot of value to customers for free that other platforms charge for extra (on top of their own 30%).

What I find amusing is how different the position is for some GAF posters depending on which company they are talking about.
If [insert plastic box manufacturer] does something blatantly anti-consumer, it's "good business" and "I would do the same". When Valve charges the same everyone else does while providing more services and features, that's an outrage.

For other companies, acting purely profit-motivated is seen as normal and acceptable. But Valve is expected to act like a charity even when they are the most consumer-friendly of the bunch.

They handle:
- Credit card processing, including payment processing for every payment processor in every country
- Historically, giving you literally hundreds of thousands of front page impressions -- not sure if they still guarantee this but historically they did; I know they currently guarantee tons of patch update impressions on the front page
- Unlimited keys for external sales which they take 0% on
- All handling of refunds and chargebacks
- A marketplace for item content, which they only take 10% on
- A marketplace for trading cards, which are free for developers, where each sale they take 10% on
- Custom art and promotion in major sale events
- Hosting every download and redownload, all patches and patch downloads, all costs associated with patch certification
- Hosting preloads
- Closed beta tests and interactive branching for deployment
- Cloud saves and storage for all your users in perpetuity
- Coupons and targeted user contacts
- A pretty effective anti-cheat system, yours for free
- A community discussion forum and an unlimited supply of free labour to moderate it if you need it
- Purchase support in every major language
- Steam Days
- Matchmaking
- Leaderboards
- Several engine tech stacks, including the major tech stack for VR, completely free
- An audience of 100 million users

Of course you might say you can do without some of these and roll your own for some of these (also, when you discontinue your roll-your-own service 3 years from now because you can't afford it, I hope you enjoy an unending torrent of complaints for your customers because you demanded not to have to pay 30%). But the idea that "lol if u add up mastercard and my cdn costs steam ain't worth 30%" is stupid as hell.

The monopoly / monopsony arguments seem totally incoherent; maybe 6 or 7 of the the 10 biggest games on PC aren't on Steam at all.

Stump always with the excellent posts in these threads.

 

[2SeeKU]

Smaller developers must pay $100 to put a product on Steam, but they are paid that $100 back after that product reaches a certain sales threshold. The difference is that Valve's $100 charge is per game, while Apple's fee must be paid annually?

Thanks, didn't know that.

And yeah, Apple's fee is annual and if you don't keep it up, your Apps are removed from the App Store.

 

[dragonelite]

Ooh old man Sweeney is trying to pick on steam.
Inbe4 barrage off tweets that don't make sense given the stuff steam gives to it users for free.

 

[StrategyFan]

digital inventory isn't a real thing

valve reducing its cut wouldn't result in lower prices

it's not like they're buying game SKUs for $X and selling them for $X+30%. they probably don't even control the sale price in most cases

 

[TheRedSnifit]

Because people often use words that are 'close enough' to what they mean without those words literally being what they mean. In this case, Steam is an effective monopoly--that is, as developer or publisher, you cannot afford NOT to release your game on Steam, unless you have a significant investment in your own infrastructure, which most developers cannot afford to do. We're not all Riot/Nexon.

If I release a game exclusively on GoG or from my own website, it's gonna be a guaranteed failure. It's simply not feasible to release it outside of Steam on the PC. So Steam is a monopoly. Sure, you can argue that the absence of competitors means that they're not... but it doesn't matter.

You can't release a game on the PC and make money without that game being on Steam.

https://en.wikipedia.org/wiki/Riot_Games
https://en.wikipedia.org/wiki/Mojang

You're literally just discounting all of the competition and all of the developers that were succesful without being on Steam without anything more substantial than that they ruin your argument. You've moved the goalposts from "Games that aren't on Steam are guaranteed failures" to "They're guaranteed failures if you aren't EA or Blizzard" to "Not being on Steam is likely to impact your sales if you're a small developer and are unlucky."

I don't know what you think "effective monopoly" means, by the way, but it's literally just a monopoly not created by government, not the "Kinda-sorta-a-monopoly-if-you-look-at-it-through-a-kalaidascope" I presume you're thinking of. A scenario where many of the most successful products are sold exclusively by their myriad competitors is not a "monopoly."

 

[KHarvey16]

Amusing diversion: List all the things that Steam could do if they wanted to become a monopoly or de facto monopoly.

Drop their cut.
Demand exclusivity periods.

Anything else?

Stop giving out keys for free.

Yeah the removal of keys would be a big one. Tying APIs and tools to exclusivity would be another.

I mean the key one is pretty big. I wonder if a publicly traded company could even justify to its shareholders a system like what they currently have in place.

 

[Ionic]

But Valve is expected to act like a charity even when they are the most consumer-friendly of the bunch.

I see this kind of sentiment cropping up in other places. When something has a lot of good will, it gets set to absurd standards at which point people get super nit-picky. For example there are plenty of Humble Bundle threads where the site is called greedy because the quality isn't always up to par with the insane years past, but I mean, they're still consistently offering great packs of games for 5 dollars. I buy sandwiches for twice that. I think a lot of forum goers need to recalibrate their outrage occasionally. I'm glad in this thread it's been very reasonable compared to most Valve threads.

 

[N3DS]

He is playing dumb.

 

[Widge]

Stump always with the excellent posts in these threads.

Yeah. I hate how the internet boils things down to a seemingly "logical" thought that X + Y so why doesn't it cost Z.

Happened with the Vita where people for some reason expected the machine to cost the same as its component parts. Literally no idea on how products sell commercially.

 

[Wiped89]

I hope none of the people saying 30% is too high never go into business, cos you're in for a shock. 30% is actually lower than most physical stores would take.

When selling a game into a physical store, expect to surrender anything up to 50% of the RRP to the store's profit margins.

 

[Sad Affleck]

Yeah that's what I said earlier in the thread - it's super weird for Tim to basically be encouraging putting a price squeeze on competitors considering his other opinions.

Exactly that. Businesswise it seems suicidal to be calling for something like that.

I agree with Tim Sweeney. Usually the percentage of and margins of setting up an infrastructure, should decrease with time as the base infrastructure is set up. IDC if that is their "demand" and the price the "market of devs" has been willing to historically pay. They have an effective monopoly and takikng so much is kinda ethicallly shit IMO. Valve makes fucktons of money for offering a rather poorly regulated service at times where they have little responsibility.

This 'poorly regulated' service is the best of its kind by a very wide margin.

Haha... It would actually make sense for valve to reduce their cut for AAA releases by 25% (maybe for preorders and during launch week) and to push the reduced price to their costumers. Pre Order CoD:Next for 70€ on Uplay, Amazon, Origin, Gamestop or for 50€ on steam... such a move would impact the industry in a big way and I'm pretty sure valve would be able to take the hit in income for years. Maybe even long enough to bleed out some of their competition.

Right? Sweeney is basically arguing in favor of Valve destroying every other storefront and becoming an actual monopoly.

The irony is that, them taking a smaller cut that they could afford too and other stores couldn't would get them closer to a monopoly that people so love to latch onto Steam.

Other digital stores couldn't hope to compete with the features, userbase of Steam if they also lowered their cut of sales.

Exactly. Steam is already the biggest and best service, if it was cheaper on top of that it would be an absolute bloodbath for every other competitor.

 

[Sad Affleck]

Double post.

 

[Sentenza]

Wait till you hear the part about Sony and Microsoft taking the same 30% cut AND still charge you to play online

AND take a royalty fee on any game sold for their platforms as well (even when they don't sell it directly, unlike Steam/Valve).

But watch the same people outraged by the "excessive 30% cut on Steam" conveniently ignore this.

 

[NoPiece]

Which may be a flaw in his understanding? Given the number of refunds Valve do, I wonder how much higher the card charges are. (Genuinely don't know myself, but Tim's assumption that they're "probably Steam's biggest expense" and still only 2-5% seems off to me. *shrugs*)

Note that they pay the credit card processor 2-5% of the full price of the sale, not just the 30%. That's 6-16% of Valve's cut.

 

[GhostTrick]

They handle:
- Credit card processing, including payment processing for every payment processor in every country
- Historically, giving you literally hundreds of thousands of front page impressions -- not sure if they still guarantee this but historically they did; I know they currently guarantee tons of patch update impressions on the front page
- Unlimited keys for external sales which they take 0% on
- All handling of refunds and chargebacks
- A marketplace for item content, which they only take 10% on
- A marketplace for trading cards, which are free for developers, where each sale they take 10% on
- Custom art and promotion in major sale events
- Hosting every download and redownload, all patches and patch downloads, all costs associated with patch certification
- Hosting preloads
- Closed beta tests and interactive branching for deployment
- Cloud saves and storage for all your users in perpetuity
- Coupons and targeted user contacts
- A pretty effective anti-cheat system, yours for free
- A community discussion forum and an unlimited supply of free labour to moderate it if you need it
- Purchase support in every major language
- Steam Days
- Matchmaking
- Leaderboards
- Several engine tech stacks, including the major tech stack for VR, completely free
- An audience of 100 million users

Of course you might say you can do without some of these and roll your own for some of these (also, when you discontinue your roll-your-own service 3 years from now because you can't afford it, I hope you enjoy an unending torrent of complaints for your customers because you demanded not to have to pay 30%). But the idea that "lol if u add up mastercard and my cdn costs steam ain't worth 30%" is stupid as hell.

The monopoly / monopsony arguments seem totally incoherent; maybe 6 or 7 of the the 10 biggest games on PC aren't on Steam at all.

Because it's the industry standard, and because they offer a lot of value to customers for free that other platforms charge for extra (on top of their own 30%).

What I find amusing is how different the position is for some GAF posters depending on which company they are talking about.
If [insert plastic box manufacturer] does something blatantly anti-consumer, it's "good business" and "I would do the same". When Valve charges the same everyone else does while providing more services and features, that's an outrage.

For other companies, acting purely profit-motivated is seen as normal and acceptable. But Valve is expected to act like a charity even when they are the most consumer-friendly of the bunch.

Stump always with the excellent posts in these threads.

All said and done.

 

[Pixieking]

Note that they pay the credit card processor 2-5% of the full price of the sale, not just the 30%. That's 6-16% of Valve's cut.

Didn't realise that. Totally makes sense, just didn't think of it. At its highest that's a lot of money, then, that is just taken out of the 30% before Valve even see it.

 

[Daedardus]

Because it's the industry standard, and because they offer a lot of value to customers for free that other platforms charge for extra (on top of their own 30%).

What I find amusing is how different the position is for some GAF posters depending on which company they are talking about.
If [insert plastic box manufacturer] does something blatantly anti-consumer, it's "good business" and "I would do the same". When Valve charges the same everyone else does while providing more services and features, that's an outrage.

For other companies, acting purely profit-motivated is seen as normal and acceptable. But Valve is expected to act like a charity even when they are the most consumer-friendly of the bunch.

Stump always with the excellent posts in these threads.

I don't think anyone is claiming that it should be like 5% or so. I think the discussion is more about if they can still be profitable with charging a lower rate and still providing all these benefits mentioned at the volume they are working with right now. Within any business, if I provide you with a detailed service, I'll charge you a certain rate for that service, often times at a small premium than what it costs me. But if a competitor could swoop in, offer the same service at the same quality for a smaller rate, that makes me continually want to evaluate the rate I offer.

With all the store fronts, due to the lack of real competition, there isn't such a free market evaluation. The stores grow to a natural monopoly because the quality of the service you provide depends a lot on the size of the service. Maybe it is possible that Valve can still make bank at a 20 or 25% rate, but that will never happen because there's no incentive to lower the rate. It isn't so much only Valve, it's that all the storefronts offer the same rate given the impression of an industry standard, but let's not forget that all ecosystems are heavily monopolised.

 

[patapuf]

I don't think anyone is claiming that it should be like 5% or so. I think the discussion is more about if they can still be profitable with charging a lower rate and still providing all these benefits mentioned at the volume they are working with right now. Within any business, if I provide you with a detailed service, I'll charge you a certain rate for that service, often times at a small premium than what it costs me. But if a competitor could swoop in, offer the same service at the same quality for a smaller rate, that makes me continually want to evaluate the rate I offer.

With all the store fronts, due to the lack of real competition, there isn't such a free market evaluation. The stores grow to a natural monopoly because the quality of the service you provide depends a lot on the size of the service. Maybe it is possible that Valve can still make bank at a 20 or 25% rate, but that will never happen because there's no incentive to lower the rate. It isn't so much only Valve, it's that all the storefronts offer the same rate given the impression of an industry standard, but let's not forget that all ecosystems are heavily monopolised.

If Valve starts undercutting it's competitors that will make it more like a monopoly, not less. Smaller stores won't be able to compete. It'll suffocate the competition.

That would be Valve applying Amazon tactics, cutting prices they only can because they have a dominant market position, not Valve doing a "good guy" move.

 

[Pixieking]

I don't think anyone is claiming that it should be like 5% or so. I think the discussion is more about if they can still be profitable with charging a lower rate and still providing all these benefits mentioned at the volume they are working with right now. Within any business, if I provide you with a detailed service, I'll charge you a certain rate for that service, often times at a small premium than what it costs me. But if a competitor could swoop in, offer the same service at the same quality for a smaller rate, that makes me continually want to evaluate the rate I offer.

With all the store fronts, due to the lack of real competition, there isn't such a free market evaluation. The stores grow to a natural monopoly because the quality of the service you provide depends a lot on the size of the service. Maybe it is possible that Valve can still make bank at a 20 or 25% rate, but that will never happen because there's no incentive to lower the rate. It isn't so much only Valve, it's that all the storefronts offer the same rate given the impression of an industry standard, but let's not forget that all ecosystems are heavily monopolised.

People who suggest this seriously ought to look at Predatory pricing. A literally anti-competitive move that would only reinforce Steam's dominant position.

The only way this works is if GOG, Humble, MS, Origin start to push the "industry standard" down, as if lowered by Valve's competitors it is a means of competition. For Valve to instigate this move would cause anti-trust suits to be filed (rightfully so, too).

 

[120v]

and here i thought valve was doing all this on their own goodwill

 

[ISee]

I don't think anyone is claiming that it should be like 5% or so. I think the discussion is more about if they can still be profitable with charging a lower rate and still providing all these benefits mentioned at the volume they are working with right now. Within any business, if I provide you with a detailed service, I'll charge you a certain rate for that service, often times at a small premium than what it costs me. But if a competitor could swoop in, offer the same service at the same quality for a smaller rate, that makes me continually want to evaluate the rate I offer.

With all the store fronts, due to the lack of real competition, there isn't such a free market evaluation. The stores grow to a natural monopoly because the quality of the service you provide depends a lot on the size of the service. Maybe it is possible that Valve can still make bank at a 20 or 25% rate, but that will never happen because there's no incentive to lower the rate. It isn't so much only Valve, it's that all the storefronts offer the same rate given the impression of an industry standard, but let's not forget that all ecosystems are heavily monopolised.

Of course, having a larger user base means that you'll be able to provide better features and service. You have more money to throw around. Simple logic, if we ignore that maintaining a larger buisnees also costs more money, but that's not the point that I'm aiming at. Valve goes even further then they need to go and offer something that nobody else does, not even Microsoft or sony (where you have to pay an additional monthly fee as a consumer and they still charge whatever they want from devs/publishers btw. Which shows what "greed" combined with real system monopoly can lead to). Valve guarantees you that they will refund you your money if you don't like the product you bought, no questions asked. This is the best consumer friendly policy on any store out there. I can't emphasise that enough. This makes preordering and buying on day one an stress free experience. Your game doesn't work or play as expected? Refund it, done.

Also why should valve take a cut to their earnings and still sell games for the same price as on other stores? Just to be nice to publishers? Why would they feel the need to do that? As already said, they would push the reduced price directly to their consumers. Great for us, but a huge problem for the competition.

 

[Ravelle]

I do.

They love money.

 

[Randall365]

Let's face it, before Steam came along, nobody had 20+ games in their libraries that they have never even played.

It costs the game companies nothing extra to sell all these unused copies and they get 70% - I reckon they are still well up on the deal.

 

[EvB]

If it's a monopoly, valve is a pretty nice monopoly. This is the most pro consumer if you count 4 major game platform providers. Behind Gog if you count them as the 5th.

There is nothing pro consumer about having a monopoly

 

[Ascheroth]

There is nothing pro consumer about having a monopoly

Which is why it was 'if'.
Thankfully they are not a monopoly though!

 

[daxy]

There is nothing pro consumer about having a monopoly

Thankfully, Valve does not hold a monopoly on the market -- Though, to be sure, it does have a degree of monopoly power as a result of its dominant market position.

 

[Pixieking]

There is nothing pro consumer about having a monopoly

Stilllll not a monopoly.

But aside from that, the point would be that many companies in Valve's position would do worse things. They'd charge for keys, they'd require exclusivity periods, they'd bull competition out, they'd stop innovating, they'd charge for more features.

This is partly why, as Durante says

Valve is expected to act like a charity even when they are the most consumer-friendly of the bunch.

Because they're already pro-consumer, people expect them to act even more pro-consumer. Nothing is ever good enough, and when Valve fall short, they're greedy and a monopoly.

 

[Lanrutcon]

They handle:

- An audience of 100 million users

Surely that if nothing else makes it worth it?

 

[Chobel]

Steam is not monopoly. Some people seriously need to look up the definition of monopoly.

 

[snail_maze]

There is nothing pro consumer about having a monopoly

While I agree with you, I also have a hard time thinking of what Valve could actually do more to be less of a monopoly. They already allow devs to generate and freely redistribute keys outsise of their own storefront ad geerally seem to have no issue with games being offered on competitor platforms like GoG or elsewhere, even for lower prices. Consumers have all the choice in the world not to buy from them, but most just dont care. Hard to hold that against them too much

 

[grumpy]

They handle:
...
- Hosting every download and redownload, all patches and patch downloads, all costs associated with patch certification
...

All very good points, but I love how people ignore the fact that hosting a game and pushing it to hundreds of thousands / potentially millions of people costs a lot of money.

 

[ezodagrom]

If Valve lowered the cut to 10% would you then claim that they're abusing their monopoly to outdo their competitors?

Sweeney:
Not at all. That would be awesome for developers and gamers, and result in more game investment and lower prices.

https://twitter.com/TimSweeneyEpic/status/900260093836402688

He's really delusional if he really believes that reducing Valve's share to 10% would result in lower priced games.

 

[Pixieking]

https://twitter.com/TimSweeneyEpic/status/900260093836402688

He's really delusional if he really believes that reducing Valve's share to 10% would result in lower priced games.

Y'know, I was going to tweet a reply, but why bother? There's no depth to his thinking. Block and move on.

 

[snail_maze]

https://twitter.com/TimSweeneyEpic/status/900260093836402688

He's really delusional if he really believes that reducing Valve's share to 10% would result in lower priced games.

Video game trickle down economics, of course

 

[AHA-Lambda]

https://twitter.com/TimSweeneyEpic/status/900260093836402688

He's really delusional if he really believes that reducing Valve's share to 10% would result in lower priced games.

Ok Tim is delusional then, and doesn't understand basic economics. Best to just ignore his ramblings now.

 

[HP_Wuvcraft]

Steam is not monopoly. Some people seriously need to look up the definition of monopoly.

I think the real problem is that people have this romanticized notion of the indie dev. They must be starving or else they are not in it for the art. They must not sell a lot of copies or else they are not indie.

Then the same people will go on to bitch about how Steam Direct causes too much shit to flood the market.

There are plenty of things to bitch at Valve for. There are plenty of things Valve is not doing well. But giving people a platform to make money at their art that they normally would not have access to is not one of them. Not at fucking all. Giving people a chance to share their art with the world, to grow as artists and humans, is not one of them.

 

[Dee Dah Dave]

Has this guy had a recent mid life crisis and lost his marbles. He posts some silly stuff.

 

[ArtHands]

https://twitter.com/TimSweeneyEpic/status/900260093836402688

He's really delusional if he really believes that reducing Valve's share to 10% would result in lower priced games.

Game developers will jack up their steam game price to match the price on other digital stores so they can take in that 20% that Valve gave up

 

[Aztechnology]

Game developers will jack up their steam game price to match the price on other digital stores so they can take in that 20% that Valve gave up

I'm pretty sure they can't sell it for a lower price on their site. That I'm fairly certain is in the TOS. Which is why they're cracking down on developers selling off grey market steam keys.

 

[JP]

I'm pretty sure that if Epic had service that mirrored the industry standards, they'd also take the industry standard 30% from developers.

 

[JaseC]

I'm pretty sure that if Epic had service that mirrored the industry standards, they'd also take the industry standard 30% from developers.

It does, which is the amusing thing. Epic's cut of assets sold through the UE4 Marketplace is 30%.

 

[Sentenza]

I'm pretty sure that if Epic had service that mirrored the industry standards, they'd also take the industry standard 30% from developers.

Funny thing is that they do.

 

[sirap]

I'm pretty sure that if Epic had service that mirrored the industry standards, they'd also take the industry standard 30% from developers.

You should've seen what Epic were charging us when everyone and their mothers used UE3.

 

[SmokedMeat]

Am I supposed to grab my pitchfork? Because I'm not.

 

[Crankshaft]

Epic has their own store. How many games do they have on it? 4? Thanks for not being on steam with those 4 games. Wouldn't want 30% to come between us.

 

[The Cartographer]

Am I supposed to grab my pitchfork? Because I'm not.

You're supposed to laugh at the shit this guy is spouting.

 

[JaseC]

Epic has their own store. How many games do they have on it? 4? Thanks for not being on steam with those 4 games. Wouldn't want 30% to come between us.

Well, the belated PC port of Shadow Complex released on Steam not long after it debuted exclusively on Epic's... thing. I don't think UT and Fortnite will stay off Steam forever; they'll also make the jump once they're "complete" enough, not entirely unlike what CDPR is doing with Gwent (Galaxy-exclusive until it moves out of beta).

 

[ClosingADoor]

https://twitter.com/TimSweeneyEpic/status/900260093836402688

He's really delusional if he really believes that reducing Valve's share to 10% would result in lower priced games.

Haha, has this guy ever looked at how prices in gaming are set? Of course a publisher won't lower their price suddenly when the cut is lower. It would also upset every other retailer out there.

 

[Pooya]

hello Tim. Why does Unreal Engine license cost as much as it does? I mean it's only a few GBs and with tech support? How much is that? A few cents per minute on a phone call or answering emails? It's not like you have people working on these, amiright.

You can't say he's dumb because he's obviously not, so the alternative is that he's malicious and has his own agenda and he is not afraid of using his influence for disinformation and worse. What happened to this guy.

 

[AHA-Lambda]

I'm pretty sure that if Epic had service that mirrored the industry standards, they'd also take the industry standard 30% from developers.

They do have that service
And they do charge 30%

Which makes this entire argument a farce