Video game publisher and PC game marketplace operator Valve is facing a class action lawsuit over allegations that it has abused the dominance of its Steam digital store to stifle competition.
According to allegations brought by Wolfire Games, Valve threatened to remove the games of developers from Steam if they sold their titles for cheaper through other digital storefronts.
“In my opinion, this is part of why all competing stores have failed,” said Wolfire founder and CEO David Rosen.
Wolfire is a game development studio that launched the original Humble Indie Bundle in 2010, which allowed customers to set their own price for a collection of games from independent studios. It also donated a portion of proceeds to charity.
The bundle was so successful that Wolfire ran several more, eventually spinning it off as a separate business and giving birth to the Humble Store.
Humble Bundle, Inc. was sold to Ziff Davis in 2017, and founders Jeffrey Rosen and John Graham stepped down as CEO and COO of the company in 2019.
Over the course of its existence, Wolfire has had the experience of dealing with Steam as an independent developer, and working with Steam on offering games sold through the platform in bundles.
“I did not set out with the goal of suing Valve, but I have personally experienced the conduct described in the complaint,” said David Rosen.
“When new video game stores were opening that charged much lower commissions than Valve, I decided that I would provide my game ‘Overgrowth’ at a lower price to take advantage of the lower commission rates. I intended to write a blog post about the results.”
Rosen said he asked Valve about his plan, and was immediately shot down and threatened.
“They replied that they would remove Overgrowth from Steam if I allowed it to be sold at a lower price anywhere, even from my own website without Steam keys and without Steam’s DRM,” stated Rosen.
“This would make it impossible for me, or any game developer, to determine whether or not Steam is earning their commission.”
Rosen said he believes that other developers who charged lower prices on other stores were contacted by Valve and told that their games would be removed from Steam if they did not raise their prices on competing stores.
“I believe that businesses are free to do whatever they want within the law. However, once a company reaches a certain level of power over an entire market, the antitrust laws forbid those companies from distorting competition,” said Rosen.
“As the dominant platform, when developers list their games on multiple PC stores, the majority of their sales will come through Steam.”
According to Rosen, this makes most developers afraid that if they don’t sell on Steam, they will lose the majority of their revenue.
“I believe that most developers have little or no choice but to sell on Steam and do as they’re told by Valve,” he said.
“I believe that Valve is taking away gamers’ freedom to choose how much extra they are willing to pay to use their platform. I believe they are taking away competing stores’ freedom to compete by taking advantage of their lower commission rates. I believe they are taking away developers’ freedom to use different pricing models.”
Rosen said that the class action suit against Valve insists that it stop interfering with pricing on other stores, and allow gamers and developers to make their own decisions.
MyBroadband contacted Valve for comment, but the company did not respond by the time of publication.
Steam is not the only app store facing legal action.
Apple is facing a lawsuit from Epic Games, the developer of Fortnite and the Unreal Engine, which has balked at the 30% commission that Apple charges for sales through the App Store — the same percentage that Steam charges.
Epic has also complained that Apple allows no competition to the App Store on iOS, forcing developers to accept paying a 30% commission to Apple or not release their app for iPhones and iPads at all.
Epic itself has also been the subject of the ire of the gaming community, though it is not currently the subject of a lawsuit.
Much like Valve, Epic runs its own digital marketplace for games called the Epic Store. It charges developers a commission of 12%.
To bolster its competitiveness against Steam, Epic purchased the limited exclusive rights to offer certain games through the Epic Store.
While these exclusive rights generally expire after a year, Epic faced stern criticism from some sectors of the gaming community for being anti-consumer, as its approach blocked consumers from buying titles through their preferred retailer — Steam.
Epic Games CEO Tim Sweeney recently revealed that the Epic Store is “hundreds of millions of dollars short of being profitable” and that it would be three or four years before the platform trades in the black.