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Wolfire Games Files Antitrust Lawsuit Against Steam; Accuses Valve of Preventing Better Deals on Other Stores

Wolfire Games Antitrust Lawsuit Steam

Wolfire Games have filed an antitrust lawsuit against Valve for its 30% revenue cut, and allegedly forbidding games being sold cheaper elsewhere.

Law360 reports (via GamesIndustry.biz), the lawsuit was filed by the Overgrowth and Receiver II developer on April 27th in the US District Court for the Western District of Washington; along with William Herbert and Daniel Escobar.

The lawsuit focuses on Valve’s 30% revenue cut on Steam, and how 75% of PC game sales in the US are via Steam. It claims that Valve “uses that dominance to take an extraordinarily high cut from nearly every sale that passes through its store,” going as far as stating Valve uses this dominance to “exploit publishers and consumers.”

One method of this alleged “scheme” is via the Steam Key Price Parity Provision. This allegedly prevents publishers from selling the game for a better price on other platforms. This creates a vicious cycle; other stores struggle to compete, thereby forcing publishers and developers to continue to use Steam over them.

Further, the lawsuit claims Valve reserves the right to deny keys (or revoke key requesting privileges) if they “disadvantage” Steam’s customers. The suit claims that their terms language is using the notion of protecting their customers as a “charade.”

“Those customers are the same ones that can (and do) purchase Steam Keys on other storefronts besides the Steam Store. They are harmed when they cannot find games for lower prices elsewhere because Valve has restrained price competition through its Price Parity Provision.”

“Moreover, Valve explicitly instructs publishers that Valve enforces this provision to ‘avoid a situation where customers get a worse offer on the Steam store.’ Put another way, Valve uses this restriction to prevent customers from getting a better deal anywhere other than on the Steam Store. Thus, rival distributors have no meaningful way to attract publisher customers and take away share from Valve, because their efforts to compete on price (e.g., by charging lower commissions) are blocked by Valve’s price parity requirements.”

The lawsuit also highlights how the Epic Games Store takes only 12% from sales– something Epic Games heavily focused on at the time of the game’s launch. In the ongoing Apple vs. Epic Games lawsuit, the latter has claimed the Epic Games Store will not be profitable until 2023. Apple predicts until 2027.

In other news, Microsoft announced that they are reducing their take from PC games on the Microsoft Store; also to 12%. Will Steam move towards 12% revenue as its rivals have? Sound off in the comments below!

 

This is not the only legal issue Valve are involved in right now. The aforementioned Apple Vs. Epic Games lawsuit had the former ask Valve for six years of their sale’s data, any discounts, and when they became available on Steam.

Apple claimed this information was crucial for calculating the size of the mobile gaming market. Valve rejected this request, as they did not keep such records, and 99% of the over 30,000 games on Steam from third parties (including confidential data).

Despite the already extensive manhours (and Valve stating they did not compete in the mobile gaming space), Apple reduced their request to 436 games- those available on both Steam and the Epic Games Store. This data would still have included (from 2015) all sales, price changes, gross revenues, and all revenue related to every version of those games and all digital content or items.

Valve rejected this as well, stating Apple had failed to produce evidence they needed it for their case. Nonetheless, Valve were ordered to surrender four years of sales data from the 436 games (rather than six years) for the case.

Image: Pixabay, Wikipedia [1, 2]

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Ryan Pearson

About

Taking his first steps onto Route 1 and never stopping, Ryan has had a love of RPGs since a young age. Now he's learning to appreciate a wider pallet of genres and challenges.




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