Bulletins

Valve says Steam's 30% cut is still as competitive as it was in 2004

The company defends its revenue share for PC games in a motion to dismiss a lawsuit.

Valve says Steam's 30% cut is still as competitive as it was in 2004

The 30% cut has become a hotly debated topic in the game industry and the broader app store ecosystem.

Photo: Pavlo Gonchar/SOPA Images/LightRocket via Getty Images

Valve has offered a rare public defense of its 30% commission on the Steam marketplace in a new motion to dismiss a lawsuit filed by Wolfire Games earlier this year. The motion, spotted by Gamesindustry.biz, was filed on July 26 and argues the lawsuit "fails to allege the most basic elements of an antitrust case."


"Valve, an innovator that created Steam as a platform for playing video games in 2003 and, to create an integrated customer experience, offered games for purchase starting in 2004, set the 30% rate at the beginning, at a time of 'vibrant competition' for PC digital game distribution," reads the motion. "In other words, 30% was a competitive price from the beginning, was still so nearly a decade later in 2013, when Steam allegedly became 'dominant', and nothing is alleged to have happened since then to make it supracompetitive."

Valve is asking for the court to dismiss Wolfire's claims and toss the case. Wolfire argued in its initial complaint that Steam policies like its 30% cut and price parity provision for pricing Steam Keys sold outside the platform have made it difficult to sell their games elsewhere. "As a result of these practices, other stores struggle to compete with Steam and developers and publishers reportedly have no choice but to continue selling on Valve's storefront," Wolfire argued.

Valve countered in its motion by saying it has no obligation to allow cheaper sales of Steam games outside its marketplace, implying it does so as a favor to game developers. "Plaintiffs say this request is anticompetitive. But Valve has no duty under antitrust law to allow developers to use free Steam Keys to undersell prices for the games they sell on Steam — or to provide Steam Keys at all," the motion reads.

The 30% cut has become a hotly debated topic in the game industry and the broader app store ecosystem, as various lawsuits filed against store owners like Apple, Google and Valve have argued that strict store policies around revenue sharing are anticompetitive. The most prominent of these is a pair of lawsuits filed by Epic Games against Apple and Google, with the Apple case having gone to trial in May. We're awaiting a verdict from the judge, but a great deal of the proceedings in court involved arguments over the origin of the 30% cut and the motivations around keeping it relatively static for so many years.

Nearly every major store owner has in the past few years began introducing exemptions to the 30% cut, due in part to regulatory pressures and legal fights. Apple and Google both now offer a reduced cut of 15% for small developers. Valve, too, lowered its cut in starting in 2018 shortly before the launch of Epic's competing PC game store, which has a revenue share of 88-12. The 30% is still intact, but Valve now takes less money the more sales a developer makes, in a bid to keep the biggest developers and publishers from leaving Steam altogether.

Latest Bulletins

The Diem Association, a Meta-backed crypto project, is winding down and selling its technology to Silvergate Capital for $200 million, the Wall Street Journal reported on Wednesday.

Keep Reading Show less

The Amazon Labor Union has reportedly gotten a "sufficient showing of interest" in holding a union election among JFK8 warehouse employees in Staten Island, New York.

Keep Reading Show less

Shares of LendingClub fell in after-hours trading Wednesday after posting weaker-than-expected revenue outlook, despite reporting strong results. The fall below $20 wiped out almost all the gains the company saw in a rally that ran from July to November as its neobank strategy showed strength, taking shares from around $16 to as high as $49. With inflation on the rise and other threats looming, that strategy's freshly in question.

Keep Reading Show less

A Walmart-backed fintech startup is buying two companies in an effort to become the latest super app to handle all of a consumer's financial needs.

Keep Reading Show less

UBS is buying robo-adviser Wealthfront for $1.4 billion, the financial services giant said Wednesday.

Keep Reading Show less

Amazon has stopped paying warehouse workers to sing the company's praises on social media, according to the Financial Times.

Keep Reading Show less

The Business Roundtable, whose members include more than 230 CEOs of some of the world’s largest companies, want “rational” and “flexible” government regulations for AI. The group, which includes CEOs of tech, financial services and defense industry giants such as 3M, Amazon, Bank of America, Google, Mastercard, Northrop Grumman, Oracle and Verizon, published a set of guidelines Wednesday for businesses implementing AI and recommendations for policymakers.

Keep Reading Show less

Google broke the internet last year with its plan to break the internet last year.

Of course, I’m talking about FLoC, Google’s poorly named plan to kill off the third-party cookie and allow advertisers to target “cohorts” of anonymous users instead. It managed to piss off everyone, with privacy groups calling it invasive and the ad industry calling it anticompetitive.

Keep Reading Show less

The Diem Association, a controversial Meta-backed cryptocurrency project, is reportedly looking to sell its assets to return capital to investors, Bloomberg reported.

Keep Reading Show less

Boris Johnson said on Tuesday that he is talking to the U.S. about a possible Russian ban from the SWIFT system, which undergirds global payments. Amid increasing threats of a Ukraine invasion, Western governments are looking for deterrence measures.

Keep Reading Show less

Russia’s Ministry of Finance is opposed to the Central Bank of Russia’s proposed crypto ban, calling for regulation instead of a complete ban.

Keep Reading Show less

Twitter was abuzz Tuesday over a long thread written on Monday by Bolt CEO Ryan Breslow, who claimed that Stripe and Y Combinator are “mob bosses,” using “every power move imaginable” to block competitors from becoming successful.

In other words: Silicon Valley is cutthroat. Who knew?

Keep Reading Show less

Ripple has bought back shares it issued after securing $200 million in funding in 2019, an unusual move which CEO Brad Garlinghouse said underlined the crypto company’s momentum despite its ongoing legal battle with the SEC.

Keep Reading Show less

Nvidia's bold $40 billion bid for chip designer Arm has been in trouble for months, after regulatory impediments in Europe, the U.K. and the U.S. have threatened to disintegrate the deal. It might be time for Plan B.

Keep Reading Show less

In the last few years, Google tried out a new project for ad targeting, FLoC, in an effort to get rid of cookies. The system was supposed to group people by interests for advertising purposes, but received significant pushback from experts who believed it would exacerbate discriminatory and predatory ad targeting.

Today, the plan is dead. In its place: Topics.

Keep Reading Show less

Raven Software, the Activision-owned studio responsible for the hugely successful Call of Duty: Warzone, told employees on Monday it would begin embedding its quality assurance testers within different departments at the company, according to a staff email obtained by Polygon.

Keep Reading Show less

YouTube’s Susan Wojcicki published the company’s 2022 priorities letter Tuesday, giving some insight into what the company sees as its greatest accomplishments in the last year and its goals for the next. Most notable: YouTube will devote resources to some implementation of NFTs and live shopping, framing both as opportunities for creators to make money on the platform.

Keep Reading Show less

Fintech funding exploded in 2021 as private markets investors piled into hot names whose growth was fueled by the pandemic. Global fintech funding hit a record $132 billion, more than double the $49 billion the sector attracted in 2020, according to CB Insights' 2021 "State of Fintech" report released Tuesday.

Keep Reading Show less

In May 2019, Ahaji Amos set up in a limited liability corporation to create a delivery company for Amazon packages in Durham, North Carolina. Nearly three years later, Amos is suing Amazon Logistics, alleging that the company misled her about the potential for success in the partnership and claiming that Amazon designed the program to make it nearly impossible for the LLC to be profitable or independent.

Keep Reading Show less

Google tapped James Manyika, the head of McKinsey Global Institute, to be the company's first SVP of Technology and Society, the company told Protocol. The position will report to Sundar Pichai and focuses on how tech affects society.

Keep Reading Show less

Meta announced Monday that it has built a supercomputer to train AI and machine learning systems, which the company claims will be the fastest in the world later this year after a major expansion.

Keep Reading Show less

The Bank of Korea concluded its first phase of testing a central bank digital currency in a simulated environment in December 2021, according to a report published Monday.

Keep Reading Show less

In many overseas countries like Pakistan and the Philippines, Meta has brokered deals with cell phone carriers so that low-income people can use a free version of Facebook without paying for data. But a software glitch the company has known about for months has made it so that many of these users unwittingly exceeded their prepaid plans on Facebook, according to a Wall Street Journal investigation.

Keep Reading Show less

Washington, D.C., sued Google on Monday, alleging the company had violated consumer protection laws with "bold misrepresentations" about its location tracking on Android phones and other privacy practices, according to an announcement from the district's Attorney General Karl Racine.

Keep Reading Show less

The crash in cryptocurrency prices, which accelerated Friday into a rout, has wiped out more than $1 trillion in market value since early November. More than $200 billion was lost in just the last 24 hours, according to CoinMarketCap.

Keep Reading Show less
Bulletins