Of course compared to retail its a great deal but that's because of the huge number of middlemen involved in shipping a game/software back then. It's not like retailer margins were that great.
The 30% is mostly arbitrary though, IMHO had apple decided to charge 20% or 25% when the appstore came out that would have become the industry standard.
Besides being standard, it's also reasonable solely for game developers not having to worry about chargebacks and financial fraud at all. Let alone all the other stuff your game gets, and stuff your game has the option of making use of (like network infrastructure for multiplayer games).
The rush to defend Valve's monopoly is so weird since HN usually hates fat cat billionaires. Valve is raking in so much money as a middleman that Gabe Newell has ~$1 billion worth of yachts alone, in addition to the rest of his wealth, yet gamers want Valve to keep on bleeding them and game studios?
steam's cut should be whatever they set, and the market responds. The natural equilibrium would get reached. The value steam provides, imho, certainly justifies their cut imho. There's plenty of other platforms to release games on - including free ones (such as itch.io, or your own website).
Platform economics create monopsony problems. If you don’t play ball with steam, you don’t get access to most customers. End of story. These things are winner take all.
Except somehow they managed to get it right from the beginning and there was never any real market pressure to change it. Had Valve (or Apple of that matter) decided to charge e.g. 20% due to whatever reasons or conditions that existed in 2007 (but might not anymore) that would still somehow be the "natural equilibrium" even today in the exactly the same way.
The fee is also very sticky, platforms can't really increase without a massive amount if backlash, therefore reducing it becomes much riskier since they can never go back. Given a competitive market doesn't really exist a variable fee based on "market conditions" can't really be a thing either.
It's very hard for someone to undercut Valve just because of the scale. They might sill be very profitable if they charged 15-20% while other smaller stores might not be able to afford that. Same mechanics have always applied to most other monopolies or oligopolies in other industries.
The equilibrium has been reached and it's more studios going bankrupt, less games getting made, gamers spending more for less, and Gabe owning over $1B in yatches
The main claim here is that it is a defacto monopoly, and that there are not "plenty of other platforms", since none of those platforms actually have any reach. It results in most games smaller than Fortnight or Blizzard having literally no choice but to use steam regardless of policy or cut.
Any time you have no choice it at least makes for a very warped market.
It's more like the Year Of Linux On The Desktop argument. Why doesn't Linux just provide better features and TCO and unseat Windows? According to the parent poster, "They must be stupid."
> The rush to defend Valve's monopoly is so weird since HN usually hates fat cat billionaires.
Yes, almost like there's an actual difference between Valve and typical other corporations? Ha ha just kidding, it must be random internet nonsense, definitely not worth applying any brain cells to!
The simple reality is that Valve is just a lot nicer to their customers in terms of behavior and utility than the overwhelming majority of companies, and that means many people cut them more slack for other things. People are willing to forgive a large cut if it feels like you're actually trying to provide an ever-more-useful service, rather than coasting on the bare minimum.
Steam isn't just a little bit better than competing stores/platforms, it's MONUMENTALLY better, and the gap is probably increasing rather than shrinking over time, because other stores don't look like they're even trying in comparison.
Of course compared to retail its a great deal but that's because of the huge number of middlemen involved in shipping a game/software back then. It's not like retailer margins were that great.
The 30% is mostly arbitrary though, IMHO had apple decided to charge 20% or 25% when the appstore came out that would have become the industry standard.
Besides being standard, it's also reasonable solely for game developers not having to worry about chargebacks and financial fraud at all. Let alone all the other stuff your game gets, and stuff your game has the option of making use of (like network infrastructure for multiplayer games).
And the cut can't be lower?
The rush to defend Valve's monopoly is so weird since HN usually hates fat cat billionaires. Valve is raking in so much money as a middleman that Gabe Newell has ~$1 billion worth of yachts alone, in addition to the rest of his wealth, yet gamers want Valve to keep on bleeding them and game studios?
The cut lowers to 25% after $10mio and 20% after $50mio iirc.
I can defend steam and its (key) features I need/use (Controllers, Linux gaming, Linux improvements)
I cannot defend valves gambling casino. I also cannot say it's a monopoly.
> And the cut can't be lower?
why should it be lower (or higher)?
steam's cut should be whatever they set, and the market responds. The natural equilibrium would get reached. The value steam provides, imho, certainly justifies their cut imho. There's plenty of other platforms to release games on - including free ones (such as itch.io, or your own website).
Platform economics create monopsony problems. If you don’t play ball with steam, you don’t get access to most customers. End of story. These things are winner take all.
Imo 30% is disgusting and needs regulation.
> The natural equilibrium would get reached
Except somehow they managed to get it right from the beginning and there was never any real market pressure to change it. Had Valve (or Apple of that matter) decided to charge e.g. 20% due to whatever reasons or conditions that existed in 2007 (but might not anymore) that would still somehow be the "natural equilibrium" even today in the exactly the same way.
The fee is also very sticky, platforms can't really increase without a massive amount if backlash, therefore reducing it becomes much riskier since they can never go back. Given a competitive market doesn't really exist a variable fee based on "market conditions" can't really be a thing either.
It's very hard for someone to undercut Valve just because of the scale. They might sill be very profitable if they charged 15-20% while other smaller stores might not be able to afford that. Same mechanics have always applied to most other monopolies or oligopolies in other industries.
The equilibrium has been reached and it's more studios going bankrupt, less games getting made, gamers spending more for less, and Gabe owning over $1B in yatches
1 reply →
The main claim here is that it is a defacto monopoly, and that there are not "plenty of other platforms", since none of those platforms actually have any reach. It results in most games smaller than Fortnight or Blizzard having literally no choice but to use steam regardless of policy or cut.
Any time you have no choice it at least makes for a very warped market.
2 replies →
Ah yes the Tim Sweeney argument. Get a better service with a lower cut, sure. Why does nobody do that? They must be stupid.
It's more like the Year Of Linux On The Desktop argument. Why doesn't Linux just provide better features and TCO and unseat Windows? According to the parent poster, "They must be stupid."
> The rush to defend Valve's monopoly is so weird since HN usually hates fat cat billionaires.
Yes, almost like there's an actual difference between Valve and typical other corporations? Ha ha just kidding, it must be random internet nonsense, definitely not worth applying any brain cells to!
The simple reality is that Valve is just a lot nicer to their customers in terms of behavior and utility than the overwhelming majority of companies, and that means many people cut them more slack for other things. People are willing to forgive a large cut if it feels like you're actually trying to provide an ever-more-useful service, rather than coasting on the bare minimum.
Steam isn't just a little bit better than competing stores/platforms, it's MONUMENTALLY better, and the gap is probably increasing rather than shrinking over time, because other stores don't look like they're even trying in comparison.