They take a 30% cut on Steam, i.e. on most PC games. They are printing money. They have an absurdly high profit-per-employee ratio. That's a failure of capitalism, called rent seeking.
having a high profit-per-employee is not the definition of rent seeking.
valve is certainly not rent-seeking. it offers service that is valuable to users, and take care of online infrastructure for games published through it, indefinitely, at no running cost to the developer.
It's not "high", it's extremely high. They just have a few hundred employees while making several millions of profit per employee. More than Apple. They are printing money.
> valve is certainly not rent-seeking. it offers service that is valuable to users,
A 30% fee just for hosting the game is not valuable.
> and take care of online infrastructure for games published through it, indefinitely, at no running cost to the developer.
The cost is substantial. It costs the developer 30%. That's a huge chunk of the total revenue. Hosting a game is very cheap, and could probably be done with less than a 3% fee. Often Valve will make more profit from a game than the developer itself. Sometimes the developer will lose money (after subtracting development cost) but Valve will still make a big profit with that game.
Their high profit is indicative of the high level of value they provide. They're far from the only store to buy/sell games in. Steam's users use Steam because they prefer it to the alternatives.
While I can't argue whether 30% is actually fair, I do believe you are disregarding some benefits steam brings which may seem trivial. The hosting of online-games and facilitation of sales is not their only service. One that has traceable value that immediately comes to mind is the illusion of a central authority for achievements.
I have personally purchased many titles a second time to register my feats with steam and anecdotally see similar sentiment among older gamers. Achievements feel worthless in isolation but provide fulfillment when socially recognized. These are sales being manifested solely through Steam's position.
Now, back to whether this social permanence is worth the 30% Steam is extracting, I do have my opinions. Steam is technically "rent-seeking" from a strict economic classification, but is this more-so a case of the lighthouse or the railroad?
its probably low compare what customers and game developers are willing to pay for it.
hosting a game and running a store nowdays is very easy, but still games launch on steam rather than building their own store or using a steam competitor. if the cost was too high, people would not be using the service
> Steam factually provides a huge amount of value to both developers and to players.
This is an outright falsehood. Other providers could host those games for much less than the 30% fee. Hosting costs are extremely low nowadays. It's basically nothing compared to the development cost of an AAA game. This is often many years and hundreds of people working on a game. The hosting costs are completely minor in comparison.
By your definition, any monopoly selling you strongly overpriced stuff would be a "huge success of capitalism". But it isn't. Just because something is useful, doesn't mean it can't be massively overpriced due to competition not working as it should. Proper market competition should ensure that no company can extract huge profit margins for trivial things. Like hosting games.
Epic, Steam's only serious competitor currently aside from maybe GoG, just had a bug in their launcher that had all Fortnite players have to redownload their entire 150~ GB game. The cost of hosting aside, the capabilities of these companies to host their own games pales in comparison to Valve, who hasn't had a single bug in downloading or updating any game in the decade and a half I have used their launcher.
Considering how alternative storefronts can't even get automatic updates to work consistently, the most basic functionality of a games storefront (more important than purchasing even, since if you can't get what you purchased, it's useless), it actually doesn't seem obvious to me that other providers can easily host their own games. Even putting aside everything else Valve uses their cut for (hosting a community forum for every game, hosting a mod DB for every game that wants it, metrics tracking, opt-in soft DRM, providing server hosting, maintaining Proton so your game works on Linux), the cut seems almost reasonable even just for hosting when nobody else is able to do it right.
I use steam to launch the games i get from epic and gog. Epic's launcher is so bad that i use their web store to manage inventory and often can't remember if i own a game on epic unless it's set to launch via steam.
It can be helpful to look at it less in terms of what it costs Valve to run their service and more in terms of what value developers get from Valve for the money.
I'm in the business and I've asked two different heads of large, very well-known AAA studios how they felt about Valve's percentage, and they basically told me the same thing: They had their teams do rigorous analyses of what it would cost them to 'replace' Valve for their games, and concluded it would cost roughly what they were already paying Valve. So they had no incentive to move off the platform. Look at how many publishers have come slinking back to Steam after trying to go solo -- there are good business reasons for that, and it isn't just about the stubborn fact of their huge social graph.
If it costs that much to replace Valve for your game, it's hard to argue that what they're charging isn't fair.
As others have pointed out, Valve does far more than just host. Shipping a multiplayer game and want comprehensive protection from DDoS attacks? Use Valve's datagram network for no additional fee. Don't want to host your own lobby servers? Use Valve's for no additional fee, they'll accommodate hundreds of thousands of players with no complaints. Want to sell your game in a zillion countries? Valve's got you, easy peasy. And discovery is a thing -- Valve sells a whooole lot of games just by putting them in the carousel in front of players. This is huge, huge value.
And as a player, I'm actually really happy, super happy, did I mention how incredibly happy I am with what they're doing with some of their cut: They saved gaming on Linux -- it's often better than Windows -- and I love my SteamDeck. So that cut is benefiting me directly as a consumer because they're spending it on initiatives I'm really passionate about.
Valve delivers a ton of value for the cost. If someone wants to try to do better, Valve's not stopping them, but I can tell you that as a player and a gamedev, none of the other options are remotely enticing to me. In my view, that's not Valve's problem to solve by cratering their own revenue.
> Other providers could host those games for much less than the 30% fee. Hosting costs are extremely low nowadays. It's basically nothing compared to the development cost of an AAA game. This is often many years and hundreds of people working on a game. The hosting costs are completely minor in comparison.
Steam does far more than just host, and everyone who uses it knows this, so it's clear that you either have no idea what Steam does (in which case you should not be commenting) or you're actively lying about it.
Steam provides payment processing, cloud saves, ratings, game tags, social integration, wishlisting and sale notification, search indexing, game discovery, a bunch of incredibly useful APIs including networking and input, Linux compatibility, and many, many other things.
> By your definition, any Monopoly selling you strongly overpriced stuff would be a "huge success of capitalism".
This is not only false, due to the above value-adds, but intentionally false because I never gave a definition - you made one up and attributed it to me to lie about my positions.
And yes, there is competition - the fact that you don't know this is yet another indicator that you're totally ignorant of anything relevant to the conversation. There's the Epic Games Store, GOG, the EA App, Battle.net, the Xbox one/Windows Store, and more. And you know what the most popular one is, by a large margin, because it provides value to both devs and players? Steam. That's the market at work.
Your comments are false due to your total ignorance of reality, and your malicious lying about my statements indicates that you don't care that they're false - you'll say anything plausible, regardless of truth, to advance whatever agenda you have.
> Your comments are false due to your total ignorance of reality, and your malicious lying about my statements indicates that you don't care that they're false - you'll say anything plausible, regardless of truth, to advance whatever agenda you have.
They seem to live in this bubble where steam is extremely bad or something.
Nothing is as good or as bad as it seems.
I think valve is still decent but I prefer Gog-games more if I can be honest, valve has drm but I appreciate their customer service from what I know and the amount of good games it produced like portal and the steam marketplace is still a very nice thing imo.
I don't think steam is rent-seeking at all and I agree with your statement on it.
Now I still believe that CS-GO's lootboxes are still an issue tho, maybe I am not understanding the significance of change so much
Steam still does nothing to prevent gambling for children and people selling the skins on the other websites, I am not understanding how this change changes that, I read some other comment in here which said that you can have contracts which convert the rare to extremely rare Only in steam marketplace so maybe they stopped the other shady websites/the youtubers they sponsor by limiting their influence....
I don't understand :/ I still feel like Steam had turned a blind eye to child gambling for a long time and Coffeezilla had made a video about it which I can refer to.
> There's the Epic Games Store, GOG, the EA App, Battle.net, the Xbox one/Windows Store, and more. And you know what the most popular one is, by a large margin, because it provides value to both devs and players? Steam. That's the market at work.
The same is true for linux/Windows as well. You could say that windows has the market at work but the point becomes moot.
It isn't as if there aren't better options (GOG) but that its rather good enough
Like I said nothing is as good or as bad as it seems, my opinion on steam is barely good enough partially because of its previous responses on turning a blind eye to the whole situation but maybe this is changing with this thing they did right now but I am still not sure how.
Other services do the same for arbitrary online shops, at much lower fees. In fact, Valve likely doesn't even run it's own payment processing, but merely integrates other services.
> cloud saves, ratings, game tags, social integration, wishlisting and sale notification, search indexing, game discovery, a bunch of incredibly useful APIs including networking and input, Linux compatibility
The development cost of these features is likely no larger than of one single AAA game. Yet they charging 30% on hundreds or thousands of AAA games and other games.
> This is not only false, due to the above value-adds, but intentionally false because I never gave a definition - you made one up and attributed it to me to lie about my positions.
You clearly stated that Steam is fine because it is useful. But anything sold by a monopoly can be useful while still being massively overpriced. Which proves that mere usefulness of something doesn't mean the price of it is justified. Which refutes your original usefulness argument.
> And yes, there is competition
Yes, but the fact that there is theoretically competition doesn't mean it is working. Large platforms like Steam benefit from network effects which come from their size alone. People will simply stay at Steam because that's already were their other games are, and because they don't see the massive 30% fee, that Valve is keeping, as some cost they have to pay. Any other platform faces a "chicken and egg" style uphill battle against these effects, even if they charge a substantially lower fee.
> Your comments are false due to your total ignorance of reality, and your malicious lying
Rather than hurling insults at me consider the simple question: If Steam was so fairly priced, wasn't charging excessive fees, how can it be that they have an extremely high profit margin? Realistically, that can only be because Valve's revenue from Steam vastly exceeds the costs of running and maintaining it.