In April, Wolfire Games filed an antitrust lawsuit against Valve, alleging that it uses Steam’s dominance of the PC game market to suppress competition and extract “an extraordinarily high cut” of sales made through its storefront. In a response filed earlier this week, Valve has asked that the lawsuit be dismissed outright, because it “fails to allege the most basic elements of an antitrust case.”
One of the central claims Wolfire made in its lawsuit is that Valve prevents developers and publishers from selling Steam keys at lower prices on other storefronts than it does on Steam. That’s bad for game makers but also for gamers, according to Wolfire, because it means sellers have to keep their prices high in order to afford Valve’s 30% cut. Wolfire is the creator of Receiver and martial arts game Overgrowth.
Valve’s response rejects that allegation on multiple points, first stating that it “has no duty under antitrust law to allow developers to use free Steam Keys to undersell prices for the games they sell on Steam—or to provide Steam Keys at all,” and then claiming that the only evidence provided of a requirement for similar pricing non-Steam-enabled games is “a single anecdote of Valve allegedly telling one unnamed developer it shouldn’t give a non-Steam-enabled game [for] free on Discord’s competing platform if it charges Steam users $5 for the Steam-enabled version.”
Valve also defends its 30% take in the response, saying that there’s no actual evidence that it’s out of the ordinary. “Plaintiffs can muster only a generalization that economics predicts Valve’s 30% commission should have decreased over time … In fact, 30% has become the ‘industry standard,’ while Valve has faced competition from some of the largest companies in the industry, including Microsoft, Epic Games, and Amazon.”
That’s an interesting point because while 30% has unquestionably been a standard, discontent with it has been growing in recent years, and other storefronts are pushing back against it. The Epic Games Store started the ball rolling by taking a relatively paltry 12% through its store, and in April Microsoft followed suit, reducing its take from 30% to 12% as well. A recent GDC survey also found dissatisfaction with Valve rate in a large majority of developers: Only 6% of the more than 3,000 respondents said that a cut of 30% or more is justified; nearly two-thirds said 15% or less is an appropriate percentage.
The reply also takes issue with Wolfire’s claim that Valve holds 75% of the market through Steam, noting that the allegation is “devoid of any factual support.” It’s not exactly a denial of the market share allegation, but Wolfire’s inability to prove it, according to Valve, justifies dismissal of the suit.
“Plaintiffs fail to allege unlawful conduct, antitrust injury, market power, or facially sustainable antitrust markets for two separate products,” Valve’s filing concludes. “Rather, they attack a popular integrated service consumers value in a competitive market.”
Valve is seeking one of two outcomes here: Either a dismissal of the lawsuit outright for failing to make any sustainable claims, or that Wolfire’s suit be on pause until the claims of individual defendants in the case are handled through arbitration under the terms of the Steam Subscriber Agreement.
Thanks, Law Street.
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