In April, Wolfire Games, the developer of the 2017 action video game, Overgrowth, filed an anti-trust lawsuit against Valve Corporation, the proprietors of the renowned digital distribution service, Steam. According to Wolfire Games, Valve Corporation suppresses competition and charges “an extraordinarily high cut from nearly every sale that passes through its store.” However, after months, the case has now come to a conclusion and Wolfire Games isn’t the one that succeeded.
In July, Valve Corporation responded to Wolfire Games’ allegations, stating that they “fail to allege unlawful conduct, antitrust injury, market power, or facially sustainable antitrust markets for two separate products … Rather, they attack a popular integrated service consumers value in a competitive market.” Even Tim Sweeney, the CEO of Epic Games, took his chance to call Valve Corporation out for its allegedly high cut from developers.
If Steam committed to a permanent 88% revenue share for all developers and publishers without major strings attached, Epic would hastily organize a retreat from exclusives (while honoring our partner commitments) and consider putting our own games on Steam.
— Tim Sweeney (@TimSweeneyEpic) April 25, 2019
However, the company continued to defend its 30% cut from developers and even stated that “30% has become the ‘industry standard.'” Fortunately for Valve Corporation, it seems like this cut won’t be changing anytime soon. In its response to the allegations, the company asked the court to dismiss the case based on the unjustified accusations, saying that Wolfire Games failed to meet “the most basic requirements of an antitrust case,” and this is exactly what has happened now.
According to the verdict regarding the case, Wolfire Games’ allegations fail because of two reasons. Firstly, the accusation that Valve Corporation is illegally using Steam as a monopoly to force players to purchase games through its storefront only has been denied because the court stated that Steam as a storefront and platform are, in fact, “a single product within the integrated game platform and transaction market.”
Secondly, the accusation that Valve Corporation uses Steam as a monopoly to charge an exceptionally high cut of 30% from developers, which makes it unsustainable in a competitive market, was also denied because the court stated that, while other storefronts with lesser cuts have come and gone, Steam’s policies regarding the percentage of revenue that it charges its developers have remained the same all through the storefront’s history.
Furthermore, the verdict also states that a 30% cut is not unfair, as other storefronts with significantly more resources that have charged much less eventually failed, and that the high cut hasn’t reduced the number of games released on the storefront. In addition to this, the verdict also states that Wolfire Games failed to describe how it directly suffered from the alleged reduction in the output of its games as a result of the policies.
Lastly, the court concluded the verdict by saying that “Wolfire may file a second amended complaint, addressing the infirmities described above, as well as any other changes it elects to make, within thirty (30) days of this order,” which suggests that the case isn’t over and Wolfire Games can still bring more evidence for another lawsuit.
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