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this post was submitted on 22 Sep 2023
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Valve is the prime example of rent seeking behavior. It's a private company that collects economic rents on a market thanks to that market being the biggest. They're a private company and their only goal is to preserve those rents. They do that by fostering goodwill. They're everything I hate about capitalism, but I don't hate them for doing it.
They are also a good example of positive middleman behaviour. While they take their cut, the value they provide to both sides is huge.
They are also in a position where they are still easily replaceable. Their dominance is from doing it well, not because they have an absolute lock in.
Part of why this works is because they don't have to prioritise short term profit over long term. Most companies like this get brought up and pumped dry. Valve seems to be the exception.
I don't think Steam is rent-seeking because:
Valve's customers are publishers and devs, and they're charging a finder's fee for connecting customers to the games. To me, that's not rent seeking, that's a direct exchange of money for a service. If you don't think the service is valuable or think you can do better, then generate keys and sell them elsewhere and you won't need to pay Valve a cut.
Valve is capitalism done right imo. You only pay when you receive a service, and only when you profit from the service. Steam also has a fantastic refund policy as well, which is surprisingly rare in the digital goods market.
Unlike every other company in their position they're not complete assholes to consumers :
Most companies in their position would lock their users in, they don't. That doesn't mean they can't be abusive though. 30% of game revenue is huge!
At least gamedevs can generate keys and sell them on other sites to get a bigger cut
I don't think you can do that on EGS or GOG. So they ask 30%, but only if they actually helped make the sale. If you drove the revenue yourself, they're happy to distribute the game for free on their platform.
That's about the least scumbag model I can think of.
Does it?
They can also just sell the game on other platforms no?
Yes, but his way you get the advantages of having it on Steam while bypassing the 30% cut of Valve.
My point was that, while Valve does take a big cut, it doesn't stop gamedevs from bypassing it
The 30% value exists because thats what console devs charge developers for ages. Valve is essentially just matching that.
I think the epic store is much lower.
Ultimately the 30% is as high as Steam estimates they can charge before they have to fear companies leaving their platform and bypassing steam altogether. Honestly I'm surprised it has not happened yet. 30% is super high, and users are not at all locked down like they are in the console market.
Epics is much lower because theyre trying to entice devs, but they are the anomally in the sea of pricing.
Epics trying to win market by enticing devs instead of working on features for the consumer, thats their market plan. Epic wasnt the only platform to have lower than 30% cut. Discord sold games at 10% cut, itchio is similar. Devs essentially debate of the baked in features of the platform and its audience is worth the 30% cut(the existing community, game review system, steams controller api, steam workshop, steamvr). Even just the client. ESPECIALLY to Linux users, on a consumer POV, ask yourself about ease getting to use the native client. Valve offers steam natively, and does a lot of work making the consumer end (and developer end too) easier on linux. EGS for example doesnt even run natively on linux, and requires a 3rd party launcher to run. People tend to take for granted all the things Valve has done for both the consumer and Developer.
Discord massively failed to get users, and devs saw little market in it. Epic takes advatage of their position using unreal engine, and offers some devs money upfront for exclusivity, something certain audiences on PC absolutely hate.
Users use steam because it simply offers them the best user experience. There are a ton of people who just buys their games directly from valve and not a 3rd party site. To a consumer, money's not necessarily the problem on their end, and they dont see the 30% hit that developers take. Something good for the developer is not necessarily good for the consumer and vice versa, and many people make that mistake and conflate that to be the same thing when it isnt.
somebody doesn't understand what rent seeking is.
Valve is not doing rent-seeking...
they have created a service that didn't exist that's beneficial to both the consumer and the seller, they don't do any anti-competitive shit with it as far as I am aware.
in what world is what they do rent-seeking?
are you an edgy 15 year old that just learned a new word and didn't understand it?