Comment by Chlorus | Hacker News Reader

Comment by Chlorus | Hacker News Reader

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> If steam would be forced to build new products rather than sitting on their platform we'd probably have had Half Life 3 a bunch of years ago.

Steam is a terrible example for this. First of all, Steam isn't a company, it's a product. Valve is the company. Second of all, unlike the App Store or other similar infrastructure, it's not like you're locked into Steam, so they're not really rent-seeking. Steam has had plenty of competitors over the years(Direct2Drive, Games for Windows Live, that garbage GameStop store), they all sucked, and as far as I know there's nothing stopping me from publishing on multiple stores & ignoring Steam. Third, Valve hasn't exactly been doing nothing - they've done more than any other company to the gaming experience under Linux & have pioneered VR. Odds are good they wouldn't have taken those risks had it not been subsidized with comfortable margins they got from Steam.

If you had cited, say, the App Store, or something that has actual monopoly power in terms of infrastructure (like our good friends at Comcast) it would have been a much stronger argument.

>it's not like you're locked into Steam, so they're not really rent-seeking

rent-seeking and monopolistic behaviour aren't the same things. Rent-seeking is the extraction of economic rent without providing new wealth with one prominent example being someone putting a chain across a private plot of land and charging you every time you want to cross over. Whether you've five guys doing that or one isn't particularly relevant.

So while competition ameliorates the negative effects of these private platforms slightly the more fundamental broken part is really that they should not be allowed to exist in the first place. What is economically desirable is competition between developers and service providers on a common and open infrastructure with ideally all reimbursements beyond maintaining the platform going to the content creators.

In fact, competition among platform owners in many ways makes the system worse because it incentivises walled gardens. This is starting to become obvious in the streaming world with Netflix gaining competition and as a result, platform-exclusive content becoming more important, or companies like Spotify or Stitcher enclosing the podcast ecosystem which used to be a prime example of openness.

Their point still stands by your analogy. There is no plot of land over which a chain has been put by Steam, users can still acquire videogames outside of proprietary platforms as easily on desktop PCs as they could before Steam was created. The only thing they are extracting rent from is their own brand and infrastructure.

Smartphone OS vendors make it hard to venture outside their walled gardens, not Steam. There are no exclusivity deals (afaik), no all-encompassing SDK developers are incentivized to integrate with (Google Play services), even SteamOS doesn't lock users down.

It’s a wonderful point, and the fact that even Steam can monetize an App Store under those conditions just goes to show that these delivery channels are actually incredibly valuable and worth a significant percentage cut due to the difficult real-world problems that they solve, and the access to a customer base ready to pay money for your product (versus pirate it).

They are perfectly capable of operating at a flat-rate service cost.

I'm not sure what you mean by this? Anyone is perfectly capable of operating their business at a flat-rate pricing structure versus a commission structure. That's the beauty of our economy; that companies can make these decisions for themselves and their customers can then vote with their wallets which solution they like better.

Steam is the perfect example because it started from nothing, did not leverage any existing device-base to shoe-horn it's solution, and they exist in a marketplace littered with a long list of failed competitors who couldn't beat them in a fair fight.

And yet still people will hate on them for nothing more than being successful apparently, and offering a service that game studios throw fist-fulls of money at.

> Rent-seeking is the extraction of economic rent without providing new wealth

I assume what you mean is "providing new value"? Regardless, Steam doesn't fit this description at all:

- Valve doesn't own the vast majority of games on Steam (i.e. they aren't just buying IP and "rent-seeking" using it)

- Steam adds value that consumers want, which is why it is so popular (friends, achievements, marketplace, workshop, etc)

- Even ignoring the previous point, the basic premise of a game store isn't rent-seeking, because download bandwidth and easy installation are added value by themselves

- Steam isn't a walled garden: they do not prevent you from selling on other stores or pay for exclusives or other similar behavior - Steam wins by out-competing the competition, it doesn't create artificial advantages for itself

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