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That lawsuit against Steam’s 30% cut of game sales is now a class action, meaning many other developers could benefit
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this post was submitted on 01 Dec 2024
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Here we go again. Armchair economists bleating "why everything cost money, corporate bad" with no actual expertise to back it up. Steam is not a parasitic middle man, it is a collection of services that would have to be provisioned and operated by the developer otherwise.
That's where the cut goes.
That's all nice, but you're dreaming if you think any of that adds up to 30% of the value of a video game.
I don't think that's exactly how it works... It isn't just the value of the game, it's the exposure and distribution that it gets just for being on Steam. I imagine that's well worth the 30% to most, which is why most devs seem OK with it.
It does seem slightly high to this non-expert, but I don't really know enough to say for sure that it's anti-competitive or anything.
It's not slightly high when you realize that someone has to pay for bandwidth, advertising, licensing fees etc. IGN (please take that with a grain of salt) has an infographic about this from an article awhile back. I feel like it explains fairly well that the industry standard is 30% and that only a handful of stores actually provide anything below that. And Nintendo particularly is reported to take 30-40% depending. I can appreciate that people are naturally distrustful of any large company. I can appreciate that steam doesn't get it right 100% of the time and there are valid criticisms of it's business practices and decisions over time. But on the other hand, this has always seemed like a nothing burger to me.
When you buy a digital key at Walmart or Best Buy or Game Stop, they get a 30% cut too.
It's not even 30% of all sales: "Valve even adjusted Steam’s rates late last year in what seemed to be a response to the pressure from Epic, but this change is likely only impactful to major developers. After $10 million in sales through Steam, Valve’s cut drops to 25% on all new sales, and drops again to 20% on sales after $50 million. For reference, earning $10 million would mean selling just under 170k copies of a $60 game, and far more for independent games that are rarely that expensive."
That explanation makes a lot more sense for AAA who are very likely using significantly more bandwidth (due to data bloat in their games, day-1 updates), and are much more likely to be making millions.
For indie not so much, and it seems odd that there isn't even some general incentive for games with lower requirements. Then again, using a platform like itch instead (possibly geared more towards bundles) or even going with some other payment method (donations) might just make more sense in that case.
On one hand, Itch.io is supposed to be for indie games and while I personally have not got any experience with their platform their model does seem to be pretty incentivised towards developers if the only thing those developers care about is getting more profit from the games they are able to sell.
However, on balance, indie game developers don't often have the budget to create the kind of hype around a game that would push most consumers to buy it from just itch.io. So it's in the best interest of lots of indie developers to make their game as accessible as possible and go where the users are.
In that respect steam (and Microsoft and Sony) are the places to go. Of those three steam has less active competition from their company for games than either of the other platforms. Indies aren't competing against Valve games the way they are against Sony or Microsoft produced games on the relevant platforms.
At this point I've backed 4 games on Kickstarter or in one case the developer site, and I am very happy with each of them. They have (all except one) offered keys on steam, Microsoft, Nintendo, and Sony. Even when they didn't release on all those platforms at the same time. Two of them I have purchased on a separate platform after receiving a key on my chosen platform so I can play those games in multiple places.
On the other hand, I don't necessarily like that Indies probably won't see the same benefit of paying less per unit served after selling $10 million and again after an additional $5 million (Valve drops their percentage from 30% to 25% after a developer sells $10million worth of units and again to 20% for every copy sold after selling an addition $5 million sold on steam).
This I feel is a boon to big development firms that not a whole lot of Indies can take advantage of. So there is definitely room for improvement there.