Valve facing New Lawsuit over 'Steam' Digital Dominance

[ONCHEhap]

Thing with Epic is that they hope that by giving out free games, they will accumulate a strong base that will be buying games from them. Instead, they unexpectedly attracted mostly one type of person... one who wants free games.

There's also the issue with the EGS being pretty bad as a platform on its own right,and the repeated spyware issues in their platform did nothing to encourage people to use their bank credentials there

[Katchii]

I could be misunderstanding, but you seem to be missing the point of the argument. The problem is not that developers do not have a choice or that there are no alternatives. This is a problem with those companies not incentivizing their platforms in a way that would draw in customers. I believe @Endus even specifically mentions some practices done by Epic games and other studios that actively turn people away from those platforms, such as the use of exclusives. As it is it appears as though these companies that are are not properly catering to customers or are, frankly, simply unattractive to customers are looking to penalize Valve for having a service that is popular because it is recognizable and marketable.

I've never argued they didn't have a choice.

The only point I've made is that Steam is SO desirable, valuable and effective that it's affecting business decisions of the developers. It's hugely influential. That's fantastic for Steam and just highlights how great a platform it is. But it's also incredibly disruptive to the industry.

That's business, I get it, but it can't be denied just how influential it is in the market.

The lawsuit won't go anywhere, and it shouldn't, because this is just capitalism in a capitalistic country. I do hope that this serves to galvanize the industry to start actual making something competitive against Steam. A 30% cut is a bit much, IMO. but if you want to use Steam, that's what you have to pay.

[Endus]

No...the fact that it isn't a GOG exclusive kind of says that CDPR acknowledges that in order to maximize sales the game had to be released on Steam which only confirms that Steam holds a dominate position.

This is the basis of the entire discussion. Is Valve misusing there dominate position in online gaming distribution.
Maybe this lawsuit will be thrown out but that's another discussion.

I mean, so far the only argument that's been presented to that effect is "DOMINANT MARKET PRESENCE BAD". And if that's the argument, my response is just gonna be "nah".

There are alternatives, in Epic and GOG. People prefer Steam. All Steam is controlling is access to its own services and support. Any entertainment/luxury company should be able to set whatever price the market will bear on that kind of thing. Do they charge more than competitors? Sure. Do developers still seek them out preferentially, despite that higher price? Also sure. Because you get more for it.

[callipygoustp]

Go figure: a good service has a commanding presence.

[ati87]

I mean, so far the only argument that's been presented to that effect is "DOMINANT MARKET PRESENCE BAD". And if that's the argument, my response is just gonna be "nah".

There are alternatives, in Epic and GOG. People prefer Steam. All Steam is controlling is access to its own services and support. Any entertainment/luxury company should be able to set whatever price the market will bear on that kind of thing. Do they charge more than competitors? Sure. Do developers still seek them out preferentially, despite that higher price? Also sure. Because you get more for it.

Dominante market position is bad when your misusing that position to prevent or kill off competition.

https://www.pcgamer.com/valve-antitr...written-rules/
Is actually a good article that adds a bit more context

And Rosen's lawsuit isn't the only one to make the assertion that Valve has final say over game pricing on Steam. A different suit, filed in January against Valve and a number of game developers, makes the same claim, saying that "Valve abuses the Steam platform’s market power by requiring game developers to enter into a 'Most Favored Nations' provision contained in the Steam Distribution Agreement whereby the game developers agree that the price of a PC game on the Steam platform will be the same price the game developers sell their PC games on other platforms."

I mean if this is true then yes Valve is doing something wrong and should be punished because this is what we call a misuse of a dominate position. The EU is investigating Apple because of these kind of practices.

Lets not ignore the position Valve holds with Steam please because that is pretty relevant to this discussion. More so that want the consumer wants because people preferred Internet Explorer over any other webbrowsers as well before Microsoft was forced to change.

[Zenfoldor]

No...the fact that it isn't a GOG exclusive kind of says that CDPR acknowledges that in order to maximize sales the game had to be released on Steam which only confirms that Steam holds a dominate position.

This is the basis of the entire discussion. Is Valve misusing there dominate position in online gaming distribution.
Maybe this lawsuit will be thrown out but that's another discussion.

In order to maximize sales a game would also need to release on Playstation 4, but being in a dominant position and being a monopoly are two different things.

Being in a dominant position in and of itself is not actionable, imo. There have to be high standards for things like breaking up private companies, because otherwise, the current market leader in any industry would by some definition always be dominant and always misuse that dominant position by fact of simply being the current market leader in an imperfect market.

I get what you are saying, but I feel these terms can be applied too broadly. If Valve's tos was onerous to the end user, or if the company was so ubiquitous that no one ever even heard of these other companies, then perhaps we would have something, but the reality is that GoG, EGS, Battle.net, Nvidia, Stadia, and a step back out of Windows, Sony, Nintendo, Xbox Series, Apple, these are platform holders. They almost all also have exclusive games, that cannot be purchased on Steam.

I'm not offended that people attack a market leader it court, in happens pretty much constantly in every industry, I'm just not buying it in this case. Maybe that will change with more evidence, and I guess we'll see.

[prwraith]

So valve has done.....surprise nothing wrong?

Sounds like they're only removing from their platform if you let another retailer sell it for cheaper? Which is just good business, why would I bother keeping stock of something that I'll be undersold on? That steam is popular and being removed from it would be detrimental is not a valid argument to make in a legal sense.

Hope valve mops the floor with them.

- - - Updated - - -

No...the fact that it isn't a GOG exclusive kind of says that CDPR acknowledges that in order to maximize sales the game had to be released on Steam which only confirms that Steam holds a dominate position.

This is the basis of the entire discussion. Is Valve misusing there dominate position in online gaming distribution.
Maybe this lawsuit will be thrown out but that's another discussion.

They're not though. They don't demand exclusivity, only that they are able to sell it at a comparable price to everyone else. Which is hardly an unreasonable demand. That they take a bigger % of the profits is irrelevant.

[ati87]

So valve has done.....surprise nothing wrong?

Sounds like they're only removing from their platform if you let another retailer sell it for cheaper? Which is just good business, why would I bother keeping stock of something that I'll be undersold on? That steam is popular and being removed from it would be detrimental is not a valid argument to make in a legal sense.

Hope valve mops the floor with them.

- - - Updated - - -



They're not though. They don't demand exclusivity, only that they are able to sell it at a comparable price to everyone else. Which is hardly an unreasonable demand. That they take a bigger % of the profits is irrelevant.

It becomes unreasonable the moment you achieve a position which allows you to kill off your competition. Apple does this exact same thing and they are being investigated by the EU right now for this very practice.

[Endus]

It becomes unreasonable the moment you achieve a position which allows you to kill off your competition. Apple does this exact same thing and they are being investigated by the EU right now for this very practice.

If they were demanding exclusivity, or cheaper pricing, there'd be a stronger case for that. But Steam does not demand exclusivity (unlike Epic Games Store), and the only requirement is that Steam pricing not be higher than elsewhere for standard pricing; it isn't even that other stores can't have sales if Steam doesn't, because you see sales all the time where Steam's price isn't the best available.

At best, Steam's position is that other digital distributors have to compete with Steam on matters other than price, on products they both distribute. That's . . . pretty darned marginal. There is no advantage for Steam in that agreement other than what's already brought to the table by Steam's own services.

It isn't even a demand that the developers' take-home percentage be the same as Steam's; other platforms can undercut Steam's percentage cut and make developers more happy, and Steam's fine with that. What they're trying to avoid (I presume) is a developer selling on their own digital platform with a reduced price, because they don't have to pay the markup for a digital distributor. Like, consider Uplay and Ubisoft; if Ubisoft were selling their games at $50 on Uplay and $60 on Steam, that'd drive a lot of customers to Ubisoft, especially since Steam purchases unlock and play through Uplay anyway; that's a competition Steam couldn't win, because if they're not getting paid they can't keep their servers running.

[Gorsameth]

It becomes unreasonable the moment you achieve a position which allows you to kill off your competition. Apple does this exact same thing and they are being investigated by the EU right now for this very practice.

If Steam were using their position to kill of competition they are doing a horribly bad job of it considering the number of alternatives.

In other words, this is not what Steam is doing at all.

[LedZeppelin]

If you are a smaller game digital distribution service one of the ways you 'negotiate' with buyers is to have lower prices by some means. Valve is definitely overstepping their bounds here going off of what is said in the article but I suspect that the whole thing is a bit more nuanced then the article leads on. That being said we should also sue them to release half life 3

[Zenfoldor]

If you are a smaller game digital distribution service one of the ways you 'negotiate' with buyers is to have lower prices by some means. Valve is definitely overstepping their bounds here going off of what is said in the article but I suspect that the whole thing is a bit more nuanced then the article leads on. That being said we should also sue them to release half life 3

For many items, in the US at least, we have a MSRP(manufacturer's suggested retail price) and generally an advertised price is rarely allowed to be advertised as under MSRP. That restriction can be put on by the manufacturer, and if a reseller if found to be under MSRP, the manufacturer may stop doing business with that retailer or punish them in some other ways.

Often, we experience this in e-commerce with the "add item to cart to see the price" option. That option isn't there to trick the consumer...usually. Pretty consistently that is used to allow a certain business to go under MSRP without breaking contract with the manufacturer. It isn't an artificially advertised price, but may be organically advertised, and because it isn't a direct sale and the consumer is required to add the item to the cart, this (I ASSUME) can be made to work around the usual MSRP rules(I have no idea if the manufacturer themselves would need to be consulted before starting such a promotion).

Occasionally, storefronts may not carry items that do not enforce their(the manufacturer's own) MSRP policy, as this creates a race to the bottom.

https://www.investopedia.com/terms/r/race-bottom.asp

This(or simply anti-competitive behavior) is probably what any company would be hoping to avoid if any of this were true.

It is also interesting to note that often the perceived value of an IP or property can be affected, sometimes greatly so, by the MSRP. This is especially true in gaming, and one of the very reasons(IMO) Nintendo and Sony prefer to target premium pricing. It retains the perceived value of their IP in the market, even if they make less profit, by never offering it cheaply.

An example. Say I just bought Returnal for 69.99 dollars. Now say that 2 weeks before it released, Sony announced that the launch price would not be $69.99 USD for Returnal, but instead the game would only cost $19.99 USD. Would that affect one's perception, or one's expectations of what the game might have been? I submit that, for at least a portion of the market, this would have affected how they viewed the game.

Ironically, if some big platform who was also too big not to do business with didn't enforce MSRP and just charged what they wanted playing it loose with 3rd party IP that didn't belong to them, in order to generate loss-leaders to get people onto their platform, imagine the backlash.

edit: sorry about the long post, I enjoy talking about this topic, lol.

[Soon-TM]

While you're technically correct, I've solved more technical issues via steam forums than any other means by a fairly large margin.

This is a key point. As a (relatively) long term Linux gamer, Steam forums have helped me a lot when it comes to technical issues - either from other users or from Steam itself.

Furthermore, the Steam Proton thing they've come up with is a godsend for playing Windows games in Linux. While you can set up games from other platforms (e.g. GOG) manually, Steam Proton makes the whole process easier than ever, and it works for the great majority of games. Or at least, it does for my entire backlog bar one (yes, one) game.

[Rennadrel]

It can't be, hence why Ubisoft has never tried to compete with uplay and why EA raised the white flag with Origin not too long ago. It's why Epic is dumping so much money into EGS to try to make it an actual competitor after it builds up a big enough install base and starts getting folks to use it more regularly.

I know a lot of people who use EGS, none of them have spent a dime buying games on the store. When free games become available, they install them. That there's no time limit on them being free is probably why it's failed to draw at least enough revenue to break even.

[Edge-]

That there's no time limit on them being free is probably why it's failed to draw at least enough revenue to break even.

There is though, the game(s) are free for a week and then they rotate to the next game(s).

And right now they're not looking to make any money on the storefront, this is the acquisition/burn phase. Similar to what we've seen in other services like Netflix etc. where they spend years dumping insane money into the product and building up a userbase. This is why EA/Ubi didn't bother trying to directly compete with Valve/Steam, because if they wanted to be serious about it they'd need to spend huge and eat big losses for quite a while to build up a userbase that was sticky and starting to spend regularly.

Valve has the massively huge benefit of being the first one to really try this kind of thing (digital distribution platform), stumbling their way through it and eventually growing a massive userbase that's extremely sticky. Trying to peel folks away is expensive as shit, which is why Epic is relying on those Fortnite bux while they're flowing.

[Endus]

There is though, the game(s) are free for a week and then they rotate to the next game(s).

I think what Rennadrel meant was they're not "free for a week to try", they're "free to buy and keep forever, if you buy them this week".

And right now they're not looking to make any money on the storefront, this is the acquisition/burn phase. Similar to what we've seen in other services like Netflix etc. where they spend years dumping insane money into the product and building up a userbase. This is why EA/Ubi didn't bother trying to directly compete with Valve/Steam, because if they wanted to be serious about it they'd need to spend huge and eat big losses for quite a while to build up a userbase that was sticky and starting to spend regularly.

I have bought something for real off EGS; looking over my list it may have been Disco Elysium, but I only would've if there'd been a better sale there than Steam (which is rare). But I've got 43 games in my EGS library. Almost all have been from their "free game" weekly offers. I'm not a brand whore, so I don't really care which storefront I buy something from, but Steam has, generally, provided better service, and I've been with them longer, so I'll default there unless EGS gives me a reason.

They're definitely not doing a lot to entice me to spend money on their storefront. Their exclusives policy just annoys me.

[prwraith]

It becomes unreasonable the moment you achieve a position which allows you to kill off your competition. Apple does this exact same thing and they are being investigated by the EU right now for this very practice.

Being a strong market presence =/= monopoly. They are not demanding anything no exclusivity, no pricing fixes, nothing. They are the absolute essence of a free market whos only demand is that they be able to sell your game at the same price everyone else sells it for.

That is hardly a problem or an issue. If the EU acts against them, the EU illustrates how much of a sham their courts are.

[jonnysensible]

Being a strong market presence =/= monopoly. They are not demanding anything no exclusivity, no pricing fixes, nothing. They are the absolute essence of a free market whos only demand is that they be able to sell your game at the same price everyone else sells it for.

That is hardly a problem or an issue. If the EU acts against them, the EU illustrates how much of a sham their courts are.

isnt the argument that these companies are acting like digital landlord, extracting rents from a closed shop.

[Endus]

isnt the argument that these companies are acting like digital landlord, extracting rents from a closed shop.

Don't see how.

If you're listing your product on Steam, the "shop" is open and your product is being sold.

If you aren't listing on Steam, then your shop is anywhere else you want and Steam neither controls if it's open nor is extracting any "rent".

If you're listing on Steam and elsewhere, the only restriction being complained about is Steam's expectation that you won't undercut their prices on your product by selling it cheaper anywhere else. If you want to sell it for the same price and not paying the overhead to Steam at all, that's totally fine if you're selling it off your website directly, Steam doesn't care. They're just taking their cut of sales through their own "shop".

[oplawlz]

isnt the argument that these companies are acting like digital landlord, extracting rents from a closed shop.

It's not a sensible argument though - the pc platform is anything but a "closed shop".