this post was submitted on 24 Sep 2023
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Is Steam really a monopoly when Valve doesn't try to stifle competition and no other company could be bothered (besides maybe GOG) to make a half decent store?
I think it's better to reframe the question as "Are there downsides to Valve's PC market dominance?" or "How is Steam's 30% cut different from Xbox or Playstation?"
For the latter: it's worth noting that Microsoft and Sony sell their hardware at a loss, and make up the difference through software, so there are obvious developer benefits to the 70-30 split. For Steam, the equivalent value-add for developers is only the platform itself, and I would wager for many of those developers the biggest reason for selling on Steam is not the feature set - though obviously useful - but because that's where the users are.
So, users get a feature-rich distribution platform, and developers (and by extension users) pay a tax to access those users. So the question is, how fair is that tax, and what effect does that tax have on the games that get made? Your view on that is going to depend on what you want from Steam, but more relevant I think is how much Steam costs to operate. How much of that 30% cut feeds back into Steam? My guess is not much; though I could be wrong.
But anyway, let's imagine you took away half the 30% cut. Where does that money go? Well, one of two places: either your pocket, or the developers (or publishers) pocket (depending on how the change affects pricing). The benefits to your pocket are obvious, but what if developers just charge the same price? Well, as far as I'm aware, a lot of games are just not profitable - I read somewhere that for every 10 games, 7 fail, 2 break even, and 1 is a huge success - so my personal view is that this is an industry where developers need all the help they can get. If that extra 15% helps them stay afloat long enough to put out the next thing without selling their soul to Microsoft or Sony or whoever is buying up companies these days, and Steam isn't severely negatively impacted, I'd call that a win.
But of course, that won't happen, because Steam has no reason to change. That's where the users are, and they are fine with the status quo.
Retail stores get a 30% cut from a game sale. Console manufacturers get a further $10 in licensing fees from that sale price, on top of the retail fee. That license cost is what goes to closing that loss leading pricing of the consoles. The retail fee they can charge through their digital storefronts is new to them but only helps them pay down their gap quicker, but they are also still taking that further $10 of licensing on top of the 30%.
That's why some PC games are $10 cheaper than their console versions.
Is there a source for the $10 fee for digital releases? I'd love to read more about it, had trouble finding it.