this post was submitted on 14 Mar 2024
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In 2018 a group of Valve staff tried to figure out just how efficient they were being—and found they were making more money per head than Apple, Facebook, and nearly every tech giant out there (www.pcgamer.com)
submitted 8 months ago by [email protected] to c/[email protected]
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[–] [email protected] 26 points 8 months ago (1 children)

The efficiency is doing it so effectively that on an open platform competitors can create there own store, pay for AAA games to appear on their store, take the smallest of pay cuts, pass it on to the consumer, and still have customers prefer to pay more to be in the Steam ecosystem. I'm against monopolies but Valve's is absolutely efficient.

[–] [email protected] -3 points 8 months ago (1 children)

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.

[–] [email protected] 12 points 8 months ago (1 children)

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.

Find me a game that has been de listed from Steam because it was sold cheaper elsewhere. You can't, so don't bother.

[–] [email protected] 6 points 8 months ago* (last edited 8 months ago) (2 children)

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?

[–] [email protected] 6 points 8 months ago* (last edited 8 months ago)

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?

[–] [email protected] 1 points 8 months ago (1 children)

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.

Fanatical and humble bundle (the good old days) are good examples. I don't know what you say "non-discounted", cheaper is cheaper no matter what.

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?

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.

[–] [email protected] 1 points 8 months ago (1 children)

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:

  1. 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."
  2. 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. . . .”
[–] [email protected] 1 points 8 months ago (1 children)

"Cheaper is cheaper" kind of overlooks the core issue

You said this:

I'd love to buy my games cheaper lol.

I don't know why you need them to be cheaper before the discount, but okay, I don't care.

[–] [email protected] 0 points 8 months ago

I can only assume at this point you are intentionally not engaging with the actual issue. Cheers.