A new class action lawsuit alleges that Valve Software is a “platform monopolist” that has kept game prices artificially high and prevented other companies from gaining a foothold in the digital distribution market for PC gaming.
Bellevue, Wash.-based Valve operates the online storefront Steam, which sells all-digital video games to users on PC, Mac, and Linux. Steam started this year with more than 33 million concurrent users worldwide and an estimated 120 million regular users. At time of writing, there are little over 191,000 games available on the app.
The Aug. 9 lawsuit, filed in federal court in Seattle by four individuals, alleges Steam has built its market dominance off the back of anticompetitive practices.
This includes “strangling competition with nakedly anticompetitive pricing restraints,” which include an alleged 30% “tax” on publishers that results in higher prices being passed on to consumers, and a “platform most-favored-nations” (PMFN) clause that allegedly prevents competing platforms from offering the same games at lower prices or with additional elements compared to what’s sold on Steam.
According to the lawsuit, “Time and time again, well-resourced platforms have tried to compete with Valve in the sale of PC games and in-game products—including Electronic Arts (“EA”), Microsoft, Amazon, and Epic—but the PMFN has prevented them all from gaining meaningful traction.”
While it’s difficult to find reliable current data on Steam’s actual market share in 2024, competitors such as Epic Games CEO Tim Sweeney have estimated that Steam accounts for approximately 75% to 85% of modern PC gaming by revenue.
The plaintiffs — John Elliott, Ricardo Camargo, Javier Rovira, and Bradly Smith — are identified in the suit as American citizens who have bought PC games via Steam at “supracompetitive prices.” They allege that Valve’s practices keep the cost of PC gaming high for consumers by virtue of price fixing and drowning out potential competitors.
They are represented by Seattle law firm Hagens Berman, which has been involved in other class action suits related to Amazon, NCAA athletes, and others.
We reached out to a Valve spokesperson for comment and we’ll update this story if we hear back.
As the suit itself notes, this is the latest in a series of antitrust suits that have been filed against Valve Software, many of which feature similar allegations of anticompetitive practices.
The highest-profile recent suit against Valve and Steam was filed by San Francisco-based Wolfire Games. According to Wolfire CEO David Rosen, he’d planned to offer Wolfire’s 2017 game Overgrowth for sale on an unnamed smaller storefront at a lower price. Upon learning that, an unnamed Valve representative allegedly told Rosen that selling Overgrowth anywhere else for a lower price would be grounds for Valve to pull Overgrowth off of Steam. Wolfire subsequently filed suit against Valve, and the trial is currently ongoing.
It’s worth noting that the suit from Elliott, Camargo, Rovira, and Smith identifies Valve’s 30% share of sales made on Steam as a tax on publishers when this is in fact a revenue split. Publishers on Steam set the price for their products, then split the revenue 70-30 with Valve.
That 70-30 split has always been controversial, especially back in 2018. That was when Valve modified its terms to encourage larger studios to keep their games on Steam.
Subsequently, several other companies used developer revenue as a point of attack against Steam, in what initially looked like it would become a new “console war” in PC gaming. Multiple major players such as Microsoft, Epic, EA, Ubisoft, and the then-independent Activision Blizzard all put out their own digital storefronts to promote their own games and/or compete with Steam. Epic and Microsoft in particular have both made an effort to court indie game developers with more favorable revenue splits for their respective apps.
But as we noted back in 2022, most of the companies that positioned themselves as Steam’s competitors have since opted to quietly return to the platform. That in turn has arguably contributed to Steam’s continued growth since then, as it’s repeatedly broken several of its records for concurrent usage in the last few years.
Gaming giant Valve hit with another antitrust lawsuit alleging anticompetitive practices by GeekWire on Scribd
https://ift.tt/GLji8Kf August 12, 2024 at 03:06PM GeekWire
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