The economics surrounding digital platforms and storefronts have gained considerable attention over the past decade, largely influenced by Tim Sweeney of Epic Games. His persistent critiques regarding revenue sharing on digital storefronts catalyzed the establishment of the Epic Game Store, which imposes a 12% fee on developers’ sales. This initiative was followed by successful legal actions against tech giants Apple and Google, compelling them to allow alternative storefronts for games on their platforms.
In contrast, Valve has maintained its 30% commission on games sold through Steam, the leading PC storefront, despite Epic’s attempts to disrupt this model. In the United States, developers from Wolfire Studios and Dark Catt Studios filed antitrust lawsuits in 2021, arguing that the 30% fee is excessive. These cases were consolidated into a single class action, which received approval in November 2024.
Legal Challenges in the UK
Across the Atlantic, a similar legal battle is unfolding in the United Kingdom, spearheaded by Vicki Shotbolt, CEO of the digital safety organization Parent Zone. Represented by the law firm Milberg, the case alleges that Valve is violating competition laws. A recent court ruling mandated that the case proceed to trial, despite Valve’s objections.
Shotbolt, while leading this case, acknowledges the value of Steam as a platform. “It’s a fantastic platform from a gamer’s point of view,” she remarks. “However, my involvement stems from a commitment to promoting positive digital engagement and unlocking opportunities within the gaming ecosystem.” She emphasizes the importance of the gaming industry for both young players and adults who invest significant time in socializing through games.
“Steam is a big and important platform for a big and important ecosystem – it needs to cooperate fairly, and it’s clearly not.”
Central to Shotbolt’s argument is the assertion that Valve’s 30% revenue share harms consumers by inflating prices. Legal documents describe this as “excessive commission charges,” which purportedly lead to higher costs for gamers. Another critical point of contention is Valve’s price parity requirement, which prohibits developers from selling Steam keys at lower prices on other platforms. According to Steamworks documentation, developers must ensure that Steam customers do not receive a worse deal than those purchasing Steam keys elsewhere.
“That really made a case that’s very compelling for me,” Shotbolt states. “This stipulation prevents games from being sold cheaper on other platforms, thereby skewing the market.” When questioned about her confidence that a reduction in Valve’s revenue share would lead to lower prices for consumers, Shotbolt candidly admits, “None. They may not.” However, she holds out hope that some developers will respond to a more equitable revenue model by lowering their prices, ultimately benefiting consumers.
“If you want to develop a PC game, you want it on Steam. It’s not like developers have ten other options.”
Shotbolt also highlights Valve’s dominance in the market, which leaves developers feeling compelled to list their games on Steam due to its vast user base. “It isn’t right for developers who invest countless hours into creating these games to pay such a hefty fee to access the dominant platform,” she asserts. “If you want to develop a PC game, you want it on Steam. It’s not like developers have ten other options.” This market dominance, she argues, underscores the importance of the case.
While Shotbolt’s background primarily revolves around digital safety, her engagement with Valve’s pricing practices stems from a broader vision of enhancing the online experience. “Online safety is crucial,” she explains. “If something isn’t safe, parents lose confidence, leading to discussions about banning social media, which we do not support.” She views competition law as a vital tool for improving the digital landscape, even if it focuses more on financial matters than safety issues.
“A market operates best when whoever’s producing the product can price it at whatever they want to price it as.”
If the class action prevails, Milberg seeks up to £656 million in damages for UK consumers affected by Valve’s practices. Beyond financial restitution, Shotbolt envisions a more equitable relationship between Valve and its developers regarding profit sharing. “A market operates best when developers can price their products freely,” she asserts, drawing an analogy to a baked bean manufacturer restricted to selling only through a high-end grocery store. “Consumers should have the option to purchase products at varying price points based on the shopping experience.” She acknowledges Steam’s added value but insists that this should not preclude developers from offering their products at lower prices elsewhere.
