The debate around the 30% cut for game storefronts continues, as Overgrowth developer Wolfire Games has filed an antitrust lawsuit against Valve.
As reported by Law360 (thanks GI.biz) the lawsuit is centred around Valve’s 30% cut of all games sold through the Steam storefront. Wolfire points out that around 75% of all PC games are sold through Steam, and that Valve “uses that dominance to take an extraordinarily high cut from nearly every sale that passes through its store – 30%.”
“Forced to pay Valve’s tax, game publishers invest less in creating new games and must charge higher prices, therefore selling fewer games to consumers,” said Wolfire. “The only one benefitting is Valve, which makes astronomical profits.”
One point of contention is the Steam Key Price Parity Provision, which ensures that publishers can’t sell their games for a better price on another platform than on Valve’s storefront. This provision means other storefronts struggle to compete with Steam, ensuring its dominance of the market.
“Removing all doubts about its policing power, Valve also “reserves the right” to “deny keys” or “revoke key requesting privileges” if they “disadvantage” “Steam customers,”” reads the lawsuit. “And while this language is couched in terms of protecting “Steam customers,” this is a charade. Those customers are the same ones that can (and do) purchase Steam Keys on other storefronts besides the Steam Store. They are harmed when they cannot find games for lower prices elsewhere because Valve has restrained price competition through its Price Parity Provision.
“Moreover, Valve explicitly instructs publishers that Valve enforces this provision to “avoid a situation where customers get a worse offer on the Steam store.”51 Put another way, Valve uses this restriction to prevent customers from getting a better deal anywhere other than on the Steam Store. Thus, rival distributors have no meaningful way to attract publisher customers and take away share from Valve, because their efforts to compete on price (e.g.., by charging lower commissions) are blocked by Valve’s price parity requirements.”
The 30% cut has long been an industry standard, but has become an increasingly controversial one. Just yesterday Microsoft announced that it was lowering its cut on the Microsoft Store from 30% to 12%. That brings Microsoft’s cut in line with the Epic Games Store’s – and Epic Games’ CEO Tim Sweeney has been publicly critical of the 30% cut, attacking Apple for their cut in the past.