Wolfire Games takes on Valve

@ 2021/05/04
Steam-driven monopoly

Indie developer Wolfire Games has filed a proposed class-action lawsuit against Steam creator Valve.

He claims the company is wielding Steam's monopoly power over the PC gaming market to extract "an extraordinarily high cut from nearly every sale that passes through its store of 30 percent".

The lawsuit, filed in a Washington state federal court, centres on what it considers an illegal tying of the Steam gaming platform (which provides game library management, social networking, achievement tracking, Steam Workshop mods, etc.) and the Steam game store (which processes online payments and delivers a copy of the game).

After years of growth, most PC gamers are locked into the Steam platform thanks to "immense network effects" and the high switching costs to move to a new PC platform, the suit argues. That makes the platform "a must-have for game publishers", who need access to the players on Steam to succeed.

But games that use the Steam platform also have to be sold on the Steam Store, where Valve takes its 30 percent cut of all sales.

By using its monopoly platform power into a "gatekeeper role" for the store, Valve "wields extreme power over publishers of PC Desktop Games" that leads to a "small but significant and non-transitory increase in price" for developers compared to a truly competitive market, the suit argues.

The suit names rivals that have tried to create their own platforms to take on Steam's monopoly, including CD Projekt Red, EA, Microsoft, Amazon, and Epic (not to mention "pure distributors" with platform-free stores like GameStop, Green Man Gaming, Impulse, and Direct2Drive).

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