New Lawsuit Concerning Valve's Monopolistic Practices on Steam
Valve has become the target of another lawsuit. The document filed by Wolfire Games accuses the company of anti-competitive regulation, including overpricing on Steam and taking 30% of devs' revenue.
- Wolfire Games filed a lawsuit against Valve for monopolistic practices of Steam;
- The devs of Overgrowth, along with William Herbert and Daniel Escobar, point to 30% revenue share and overpricing, among other things, as the result of Steam's unquestionable dominantion.
We may be discuss Epic Games Store at length, talking about the store's losses, lack of features or tons of free games (and more). However, there's no denying that Epic Games' store and its de facto fight with Steam has made waves throughout the industry. Another result of this is a lawsuitby Wolfire Games, which accuses Valve of monopolistic practices, harmful to both publishers and consumers.
The document, filed in a Washington, D.C. court, has also been signed ("on behalf of myself and others in a similar situation") by William Herbert and Daniel Escobar, two of Steam's customers who "paid above-average prices for desktop games." Along with the team at Wolfire, they are seeking not only compensation for damages and legal fees but also "an injunction to remove Valve's anti-competitive regulations."
"Valve is able to extract such high fees because it actively suppresses competition to protect its market dominance. Many other game stores have tried to charge lower fees, in the range of 10-15%, but they have all failed to achieve significant market share. This is because Valve abuses its market power to ensure game publishers have no choice but to sell most of their games through the Steam Store, where they are subject to Valve’s 30% toll."
As you can see from the quote above, Wolfire Games has joined critics of the 30% revenue share that has long been the standard in the digital distribution market. But now - and probably due to Epic Games' proactive efforts - more and more people are openly saying that this is far too high. Just take a look at the results of a survey conducted by the organizers of GDC: only 3 developers surveyed consider the 30:70 digital revenue split to be fair. What's more, all this complaining has translated into concrete actions by owners of many stores, even those in conflict with Epic Games (like Apple or Google). Microsoft, for example, has just lowered the markup on its store from 30 to 12%.
However, Steam's "tribute" (which, by the way, offers lower margins for the highest-grossing games) is just one of Wolfire Games' complaints. The other one is not entirely new either. We're talking about the MFN (Most Favoured Nations) clause, which is supposed to guarantee that the games of a given publisher will not be sold outside Steam at a lower price. We heard about it back in January, when five gamers brought charges against not only Valve, but also Ubisoft and CD Projekt.
The devs of Overgrowth and the Receiver series are paying particular attention to Steam as, needless to say, the undisputedly largest digital distribution platform. The team at Wolfifre Games points to the failure of similar stores, even in the best case, unable to fight with Steam. Just look at the actions of Microsoft and Electronic Arts, which ultimately decided to make their games available on Valve's store. The fact that even such powerful companies have been forced to partially (if not completely) yield is enough for the authors of the lawsuit to prove the virtually monopolistic dominantion of Steam.
As mentioned at the outset, Wolfire Games, William Herbert, and Daniel Escobar want not only to punish Valve for these practices but also to force changes in the operation of Steam. On the face of it, this seems like a wild goose chase. However, in the context of the earlier lawsuit in January and the industry's growing resentment of the "unfair" 30% markup, it can't be ruled out that Valve might lose the case. Not that the company hasn't also had other legal problems in recent months.
