Steam contributes a great deal to the games under their platform. They include all sorts of cool features like achievements, reviews, downloads, DLC distribution, Steam Workshop, user statistics, and other cool features on top of excellent marketing. In addition, Steam does not lock it's users into using just their platform. You can add non-steam games to your library and use other stores on your Steam devices.
In addition, Steam happily allows publishers to sell their games on other platforms and does not create 3rd party exclusivity agreements.
Personally I would consider Steam to be absurdly democratic in their distribution model.
Also Steam keys and Proton. I heard they often don't charge for them. Valve has made Linux gaming into a real alternative to Windows. Much better than MacOS.
> So, genuine question here: do companies have to pay full price in order to finance a technology that is used by 5% of their daily users?
As far as I know; Valve has cut the rate for larger companies.
> Of course this is a "devil advocate" question, but I would not consider Valve as "safer" than any other game / tech companies to be honest...
I do not know what the point of this comment is. We were not discussing if a company is 'safer'. As one US judge said when an Indie game company sued Valve and lost; the 30% rate is common among digital platforms. The point myself and the above poster made was that Valve does a lot more then most platforms that do charge 30%. Myself as a Linux enthusiast is very thankful for Valve for their work on Proton and Mesa.
You are not investing in Steam, you are paying them for something. Whether that is marketing, content distribution, or additional features. When you buy a car and don't use the seatbelt or turn signals, you are not paying for everyone else to have a seatbelt and turn signals. It just comes with the car.
Many of those features just encourage technical lock-in, though. Microsoft offers DirectX and a bunch of features for free. Why? You'll (mostly) be using them on Windows, so it helps build/maintain the moat and makes it harder for limited-resources developers to move elsewhere.
If that were true, you'd think you see more steam exclusive games. The problem is I can't think of a single one I own that is steam exclusive. I am sure there's at least one out there.
Half-Life, Counter-Strike, Portal, and their sequels are all Steam exclusive. The only mandated Steam exclusives are Valve games. Anything else is purely out of convenience for the developer.
I realize you're probably referring to PC gaming specifically here, but it's interesting to note that Portal and Portal 2, at least, (haven't checked on the others) are available on the Nintendo Switch store.
Whether 31,000+ constitutes a lot of games depends on your personal definition. You said you'd think there were more, so I'm guessing you were thinking of a bigger number.
AFAIK developers generally don't announce when a game is exclusive to Steam, so that's probably as close to a definitive list as there is. And I don't know how accurate it is, either, as I haven't inspected it.
I assume one of the things that's missing from the list are games that used to be exclusive. E.g., Borderlands 2 was (on PC) exclusive to Steam for something like 7 or 8 years, but it's presumably not on the list since it eventually became a non-exclusive title.
Right. "Steam exclusivity" is not a thing where there's exclusivity contracts or anything like that, but rather developers "just" deciding other stores are not worth the effort right now. Both in just being additional effort to setup/promote and for smaller titles it can be important to have all initial sales happening in one place, because ranking on Steam (and other stores) is tied to getting enough sales/reviews/... happening quickly. And then some add GOG etc only later to catch the long-tail of sales there too.
(and I guess Valve first-party titles are a special case of course)
Fair point. It's interesting though I have a large steam library (1000+ games) and the intersection with this is very low. How many of these games actually have sales?
But regardless, the point was that steam features provided vendor lock in. I doubt that is the case for many of thees games. It's likely just that steam is the most popular marketplace.
A counterpoint to consider: Tim Sweeney says his Unreal (studio) customers that use Steam (which is nearly all of them) are worse off than the retail era:
>Generally, the economics of these 30% platform fees are no longer justifiable. There was a good case for them in the
early days, but the scale is now high and operating costs have been driven down, while the churn of new game releases
is so fast that the brief marketing or UA value the storefront provides is far disproportionate to the fee.
>If you subtract out the top 25 games on Steam, I bet Valve made more profit from most of the next 1000 than the
developer themselves made. These guys are our engine customers and we talk to them all the time. Valve takes 30%
for distribution; they have to spend 30% on Facebook/Google/Twitter UA or traditional marketing, 10% on server, 5% on
engine. So, the system takes 75% and that leaves 25% for actually creating the game, worse than the retail distribution
economics of the 1990's.
>We know the economics of running this kind of service because we're doing it now with Fortnite and Paragon. The fully
loaded cost of distributing a >$25 game in North America and Western Europe is under 7% of gross.
I just don't get how what Steam does is parasitic or bad in any way. They are expensive, but they don't engage in the predatory practices of most of their competitors. They just kinda sell games.
If we accept this argument, let’s not forget that Apple contributes the entire iOS API, which is much much wider in scope than what Steam offers.
Someone will argue that until now the rest of OSes gave us the entire API for free, but I don’t see why charging for the OS API is an invalid way to make money.
Your competitors giving away their product means your product is not worth anything? That seems like nonsense to me. Maybe your competitors are unable to compete on the worthiness of their product which is why they are forced to give it away.
Bingo. I doubt the Open Handset Alliance would've gotten off the ground had they charged the kind of licensing fees common at the time by Symbian and Windows Mobile. What would convince manufacturers to pay into an (at the time) remarkably immature platform and gamble their devices' success on it?
But make it free… and now you've suddenly got their attention.
There is literally no reason why you could not just publish your game anywhere else than Steam. Or publish on Steam as well as other platforms. Unlike Epic Game Store, Sony, or Microsoft, Steam doesn't engage in third party exclusive agreements.
Yeah, it's actually kind of low. Kindle Direct Publishing takes 30% of digital book sales and those are like a couple megabytes. Steam is distributing 100GB+ titles on top of adding Steamworks SDK and a ton of other features.
30% was a great deal when KDP launched..several decades ago..Prior to KDP, self-published authors would have costs of about 90% to print and distribute their own books. Traditional publishers generally take 85% but in exchange handle the editing, marketing, and physical logistics of book printing and distribution.
Similarly, when Steam launched, its biggest competitor was retail. Studios got paid a % of the wholesale price (after the publisher recovered its costs), which worked out to an average of approximately 10-15% of the retail price for successful games and 0% for unsuccessful games. (Note: this does not include the milestone payments to the studio during the development of the game.)
But markets have changed. 30% may or may not be a great deal anymore. (For KDP, many authors say that the 30% is worth it because the volume of their Amazon sales dwarfs all other-channel sales combined. Some relatively famous sci-fi authors have said that about 90% of the sales of their self-published works were through Amazon.)
If I were looking for alternatives to Steam it would probably be Good Old Games, Humble, or self publishing. Epic Game Store is just kind of trashy. They keep engaging in anti-consumer practices.
Devil's advocate: what is the typical markup at retail stores?
I am inclined to agree with you, it feels like rent seeking at some level (middlemen profiting from the work of the creator), but at the same time, there are many moving parts to get product into the hands of customers so I'm not sure what's fair / standard.
(This is separate from the topic of the article, in which Apple prohibits others from looking elsewhere for these services, which sure seems like textbook anticompetitive behavior)
Devil's advocate: what is the typical markup at retail stores?
Who cares? We're not selling boxed software. Let me give you a better question: how much would it cost to host a web site and give a payment processor their cut? I can answer that, because I've done it for Pocket PC/WinMobile apps: 7% to FastSpring, or whoever, for payment processing and then web site hosting for, what, a few hundred a year?
30% is friggin' ridiculous. Discovery is non-existent on Apple's App Store, so we are paying for...what? Overpriced payment processing, and some minimal online storage? I don't give a shit that Apple provided a "platform", as Microsoft isn't charging for me to have the privilege of dropping a binary on a Windows box. And for Apple to then turn around and demand a cut every time money changes hands, whether Apple had anything to do with it or not, is just icing on that anti-competitive cake.
The point is it's a frame of reference. The claim is that 30% is ridiculous. Why? Based on other comments in the discussion, it sounds in the same ballpark to other online stores, ones without Apple's anticompetitive pressure.
If that's the case, it sounds like a very lucrative market, so competition should bring that number down if it's so profitable.
Again, this is a separate question from Apple's anticompetitive behavior, it's solely about whether a 30% cut is itself reasonable or outrageous.
I thought of a frame of reference: ebay. All told, it looks like I pay 15% to ebay when selling something. So Apple charges 2x as much (I would say the value provided is comparable)
Apples and oranges. Boxed retail have to pay for buildings, shipping, stock management, etc which just do not exist in the same quantities for digital downloads.
Why is a brick and mortar retail store a useful frame of reference? You may as well compare it with the margin taken by my plumber or the loss factor in electricity supply lines. It's utterly irrelevant as a frame of reference. You really can't see that?
Why be so snarky and dismissive? Plumbers or electrical lines aren't middlemen between producers and consumers. Retail stores and app stores both deal with:
- taking a large number of small payments from geographically distributed customers (with different tax situations), taking a cut, and producing a simpler bulk income stream to the producer
- having some filter on quality of the products that are offered to the consumer, and providing a low-friction way for customers to exchange money for them
- dealing with refunds, differing methods of payments, discounts, etc. (handling some of the customer nonsense that comes from dealing with the public, in short)
Are there things that physical stores do that an app store doesn't? Of course. But if retail takes a 50% cut and the app store takes 30%, well, that's instructive, isn't it? That sounds reasonable given that they play similar roles but with less "physical stuff" to do. But if retail takes 10% and here we have the app store taking 30%, that's even more instructive and that would support the claim that the app store is "ludicrous". I'm not looking to compare 29% and 30%, I'm evaluating the claim that 30% is an outrageous sum. Outrageous compared to what?
--
For the record, it annoys the ever-living hell out of me that ebay keeps taking more and more, but from what I've seen, its competitors are in the same ballpark. Is Apple worth twice that for the app store, probably not. But now we have a frame of reference: it's about 2x ebay, not, say, 10x
You cannot charge less on other stores than what the game costs on Steam or Steam will kick the game out. So consumers lose out.
> The second class action accuses Valve, Inc. of using MFN clauses in its contracts with game developers—both big (Ubisoft) and small (Rust)—to maintain its monopoly in personal computer video game sales through its online marketplace Steam as well as stifle competition more generally. The complaint alleges that the MFN clauses cause game prices across online marketplaces to be the same even though stores like the Epic Games Store take a smaller commission than Valve. Rather than pass those savings on to the consumer, the developers must maintain higher prices to remain profitable on Steam.
This is not well known because Valve is somehow untouchable and worshipped so much in the online community like on Reddit and HN that any criticism invites personal attacks, downvotes and flags etc. and is buried, even if valid.
Imagine the uproar if another company that was a monopoly did this. Look at all the comments on here right now and none of those mention it.
Valve only requires that when you are selling Steam Keys outside of Steam. If you are selling the game as a standalone separately there is no MFN clause.
To expand on that, what's happening is that Valve allows developers to give a Steam copy of the game to anyone who bought the game on a different marketplace. Neither the user nor the developer pay Valve anything for that copy of the game.
Valve will only provide that free Steam copy if the price the user paid is equal to or greater than the price on Steam. This ensures that you can't effectively just sell Steam copies of the game at a lower price than on Steam itself.
That seems more than fair to me. Valve is providing a free promotional item and it has a straightforward limitation designed to prevent abuse.
If this is true, how is there an entire marketplace of Steam keys for sale elsewhere, like Humble Bundle and Green Man Gaming and Fanatical and all of isthereanydeal.com? They've existed for years and sell many many Steam keys for many games at a discount.
In addition, Steam happily allows publishers to sell their games on other platforms and does not create 3rd party exclusivity agreements.
Personally I would consider Steam to be absurdly democratic in their distribution model.