this post was submitted on 11 Jun 2024
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30% is the standard, including for physical media on retail stores, and physical stores require all the overhead of stocking with the negatives of losing sales if demand is higher than supply.
Anyone who actually complains about steam's cut is either misinformed or lying.
...what? Yeah, 30% is the standard when there are higher costs and higher risks. Why would it not follow that Steam using the same percentage - with lower costs and none of the physical-based risk - is simply greed?
If you look at the overall cost of running a platform though, especially one that does several things, you can see where that 30% becomes viable.
A few things to highlight are, long-term storage and availability of purchases. There is not a single game I have bought on Steam in close to 20 years that I can't still download and play to this day. Many of those are games that are no longer available for sale on the storefront yet valve as a content provider keeps them available to me and likely will in perpetuity.
There's an argument to be made that storage is cheap but they are also storing other people's things that are no longer generating revenue for them. Also, they are providing the bandwidth for us as users to download those games whenever and as many times as we like without concern for how many copies of title sold or who the initial publisher or developer was.
When you look at something like a console provider such as Nintendo or Microsoft who will completely shut down legacy stores, it makes the value of valve taking a unilateral 30% all the more attractive. Anything I buy on Steam I will be able to download and play in perpetuity. That 30% goes to making sure this isn't just for big-name or the current hot shit. This is for everything ever put on their platform.
Sure, in a vacuum 30% seems like a lot but when you consider the overall maintenance costs and the fact that they have seemed to be pretty pro-consumer all along, The intrinsic value in what they're offering becomes a lot easier to see.
I also wanted to add on a recent experience I had that highlights this even more so.
I was going through old archive drives and found a digital copy of "The Club" that I had purchased from Direct2Drive. I don't know if anybody remembers them or not but, they were one of the early digital storefronts that focused on PC digital downloads.
Anyways, I had the installer and my provided key in the directory so I installed the game and attempted to launch it only to be met with an activation screen. When I attempted to activate those servers had long since been decommissioned so I was dead in the water. Feeling that sting that one gets when they can no longer play something they legally purchased I started searching around for information on workarounds before I grabbed a crack. I found a thread from the company that had purchased the rights to all direct2drive purchases that had a workaround for doing the authentication through an alternate method.
I tried all the steps listed including performing a recovery process for an account that I had long since lost the login information for only to be met with a failed authentication once again. By this point I had invested close to an hour maybe an hour and a half of my time trying to get some shitty old game to work and decided it wasn't worth it.
I hopped over to Steam and saw that I was able to purchase the game directly from them for $5 and download it immediately without any need for additional authentication steps or trying to track down who had purchased the rights to give me access rights to the thing that I had purchased 15 years ago.
Sure, my one experience may be anecdotal but I think it highlights some of the greater issues people might not take into consideration when talking about what valve's cut is and what that represents to us as the users of the services they provide.
If their revenues were close to their running costs Gaben wouldn't own multiple yachts, stop defending a company that made a billionaire out of its owner while you're making less a year than he burns in a day on his boat.
I don't begrudge him running a successful business. And I didn't give a shit about who you feel I can or cannot defend. Lol.
If people can become billionaires from selling you stuff it means you got ripped off and overpaid, so yeah, you should be pissed.
Funny how you look at people's history and they all have anti rich comments in there, but when it's Gabe Newell? Oh he doesn't count.
Two issues, you can download and play your games in ‘perpetuity’ so long as Valve continues on the current operating model.
And Valve has not been particularly consumer friendly in the past.
They were found to be violating consumer rights in Australia at the very least and had to put a large notification on their storefront to disclose exactly what they had been wrong.
Valve were forced into providing a refund model and even then it often conflicts with consumer interest. Though admittedly bad actors will always try to abuse any refund model on digital products.
Most of the retailers mentioned in that article were also digital only and had the exact same or less risk. Steam certainly does a lot to try and get people's money, but they aren't just greedily fucking over Devs for that 30%, that is in fact industry standard.
I also have no doubt that Epic will enshitify itself and raise its rate closer to 30% after growing.
Its not one to one, but providing digital services is not exactly cheap. Data centers and servers take a lot of costs, both the electricity and salary for a team of ops engineers to keep it running smoothly. The building, conditioning, maintenance, insurance, storage, equipment. To ensure low lag and high download speeds you need several data centers with data caches in different regions of the world. If anything it is actually more risky. If a store closes the stock was already paid for by the the owner to the publisher. Zero risk for the publisher. If Steam goes down, it brings windows of opportunity for sales with it and not a dime is secured. They pay for the uptime and quality of service, not just processing a payment once and a download link with a shitty 72 h expiry time. People expect access to their digital goods 24/7 virtually forever. Steam provides it all with a myriad more of business and client facing services that a physical store would simply be incapable of providing.
It's still the market standard for digital stores, and if steam was greedy they could absolutely charge more with their market dominance.
For comparison audible has audiobook market dominance, and takes a 75% cut. If you agree to make your audiobook audible exclusive, they'll "only" take 60% of the profit, and many audiobook authors take that deal because getting an extra 15% cut on audible is worth more than the sales from other audiobook stores.
Audible is what you get when a greedy corporation has market dominance, in comparison Steam's cuts are very tame for all the benefits they give.
Or maybe they were as greedy as they could be without risking another company coming and taking their place, they also protected themselves against that by including a clause that prevents selling games cheaper on other stores so even if someone comes and tries to compete the devs are stuck because they need to choose if losing access to Steam's monopoly is worth it to be able to sell their game cheaper to end up with the same amount per copy in their pockets.
Is that even a real thing? Other stores sell games cheaper all the time. Even when buying steam games it's usually cheapest to buy the steam key from another store, because someone else will have it on sale for cheaper.
It's part of their contract, Wolfire Games is suing them for anti competitive practices.
That lawsuit is from 2021, and was thrown out later that year for failing to meet "the most basic requirements of an antitrust case,"
There's a new lawsuit, Gabe even has to show up in person.
https://www.gamesindustry.biz/gabe-newell-ordered-to-make-in-person-deposition-for-valve-v-wolfire-games-lawsuit
https://casetext.com/case/wolfire-games-llc-v-valve-corp-7
It was approved not long after the first one was dismissed, but (surprise surprise) Valve fans like to pretend everything stopped in 2021.
Just because there's an outdated industry standard doesn't mean it should be perpetuated, let alone supported, for eternity. Valve's server hosting costs on a per-installation basis have fallen substantially since they first launched Steam, so there's no reason why the 30% cut is still necessary; even 20% would leave them a sizable profit margin. I'm not a fan of the Epic Game Store for bribing companies to not release their games on Steam for a set amount of time, and choose not to use it as a result, but it's time that the 30% industry standard be dropped. In purchasing a game I want to support continued development of that franchise, and $15 of a $50 purchase going to the storefront is not only excessive and inflationary, but harms developers as well.
I guess you wouldm't be complaining if they never improved efficiencies then, since decreasing costs should apparently be passed on to distributers. Shame on them for improving their business sonthey could use those profits to create the steam deck and other benefits for gamers instead of propping up the profits of game companies!
Should game companies lower their proces based on volume of sales when they make 'enough' profit?
Valve could still operate as it currently does, including having sufficient profits to account for R&D and long-term costs, at a lower cut of platform sales (as another commenter mentioned, Gabe Newell's billion dollar yacht collection is demonstrative of the platform's profitability, especially when one considers how much it costs to maintain ships). Products such as the Steam Deck make money for Valve too, as Steam Deck users (myself included) statistically buy more games on Steam as a result. I don't support profiteering efforts by game publishers either, such as the Factorio price increase attributed to inflation, $70 game releases attributed to inflation when digital releases have reduced their costs, and micro transactions in general. In any case, however, given that cost increases are always the consumer's responsibility, cost decreases should not simply be a means for companies to bolster their profit margins.
I am fine with someone who set up and runs a successful business that is in no way predatory and is a benefit to employees, consumers, and the companies that use their product to have an excess amount of money. They are doing capitalism the right way and actually earned the benefits.
Games going up to $70 are not becsuse of the 30% cut. They wouldn't go down if that percentage dropped either. I play multiple games that were always sold at $40 or less as full games and they have been massively profitable.
So it's not predatory to let games become more expensive while also reducing running costs? Because if you run the numbers it means they're just increasing their profits by charging the same % and forcing devs and publishers to increase the cost of games to compensate for development costs increasing. The only winner here is Valve, maybe you should start defending your own interests instead of defending the interests of a billionaire.
Steam is not making the games more expensive, the game studios/distributors are increasing the prices so they can make more profit.
It you need to make 30$/copy to cover costs in 2015 and Steam is taking 30% you need to sell for 43$/copy, Valve is making 13$/copy.
Development costs go up by 20% over the next 10 years, you now need to make 36$/copy to cover costs, with Steam's cut you now need to sell for 51.50$, Valve is making 15.50$/copy.
If it was 15% instead? 35.50$ and 42.50$ would be the prices.
During that time operating costs for Valve has actually gone down though, so they're actually increasing their profits two ways!
But hey, let's defend their business practices so Gaben can buy a seventh yacht!
You're the one that ends up paying for it though, games could be cheaper, instead Valve just increases its profits.
I am getting my money's worth.
Ok, that's just idiotic...
Ok, then let me be an idiot while you go through whatever distributor you think gets the 'right' amount of profit.
The only reason why you think you're getting your money's worth is because your were led to believe your money is worth much less than it is. If someone can become a billionaire off your money while you're "hoping you'll be able to retire" it's because they're making too much profit off of you.
K
30% is the standard. And it's absurd. They all do it because they all have their own walled garden territory, and it doesn't benefit any of them to lower prices.
You're telling me that Steam does 30% of the effort to create and publish a game?
They distribute games, which is something in addition to creating and publishing.
Whatever percentage they use is based on an average across wildly different games. A large game with frequent updates doesn't need to pay steam for the work on steam's end each update. They don't need to pay for each tine someone downloads their game, or for the ongoing costs to upgrade steam over time to continue supporting their game. They have a set percentage per sale so they can easily calculate how many units they need to sell to break even.
If the game's sales die off they don't need to pay for steam to continue support. At any time they can use the popularity of a new release to renew interest in past releases without any extra requires work. When game sequels blow up, the publisher doesn't need to do anything to get sales money from new sales of the prior versions. The prior games are just there, waiting to make the publisher money.
How much value do you think any distribution platform provides?
Steam would be profitable at 12%.
There's the weakest defense of a capitalistic business practice you could come up with...
"It's the industry's standard!"
Ok, if the standard was 50% and someone came along and said "Know what? We can do the same thing for 20%" would you be defending those charging 50%? What if it was 75%?
The reality is, they're taking 30% because their position allows them to do so and people don't care enough about those actually doing the work to create games to push Valve to change their ways. Valve is as greedy as any other company.
Remember folks, Gaben is a billionaire that owns multiple yachts, he's not your friend, he's making a fuck load of money instead of making sure you get the most from your money, Valve could lower their cut by a whole lot while still being extremely profitable.