I understand your analysis, and I certainly failed to mention that point, but making the overall value less attractive to speculators is not evidence of being "rotten to the core".
I would still contend and say the gambling aspect, with real money, is a net negative to the community.
I'm guessing the video games industry's attempt at self-regulating with PEGI and similar efforts actually paid off.
If you vote this down, pretty curious what you are thinking? That it’s a legitimate investment? The only people spending that much money on cosmetics are drug dealers.
Then there are the third party gambling sites where you bet items on matches in the hopes of spinning up your cheap items into more expensive ones
This part is already gambling. The 3rd party site is letting them gamble again.
The only thing I ever spent money on was League of Legends skins/heroes, but those were always guaranteed.
My son keeps asking why I won’t buy robux for him, but those are an even bigger waste of money than some of these lootboxes xD
That you used a straw man. The $20k cosmetics weren't mentioned, and even if some buy these, the thing itself can still very well be targeted as gambling towards children.
They're mentioned right there in the article this is nominally meant to be a discussion thread about.
People downvoting you must either not be aware of this, or have a personal stake in it.
valve is certainly not rent-seeking. it offers service that is valuable to users, and take care of online infrastructure for games published through it, indefinitely, at no running cost to the developer.
> valve is certainly not rent-seeking. it offers service that is valuable to users,
A 30% fee just for hosting the game is not valuable.
> and take care of online infrastructure for games published through it, indefinitely, at no running cost to the developer.
The cost is substantial. It costs the developer 30%. That's a huge chunk of the total revenue. Hosting a game is very cheap, and could probably be done with less than a 3% fee. Often Valve will make more profit from a game than the developer itself. Sometimes the developer will lose money (after subtracting development cost) but Valve will still make a big profit with that game.
I have personally purchased many titles a second time to register my feats with steam and anecdotally see similar sentiment among older gamers. Achievements feel worthless in isolation but provide fulfillment when socially recognized. These are sales being manifested solely through Steam's position.
Now, back to whether this social permanence is worth the 30% Steam is extracting, I do have my opinions. Steam is technically "rent-seeking" from a strict economic classification, but is this more-so a case of the lighthouse or the railroad?
hosting a game and running a store nowdays is very easy, but still games launch on steam rather than building their own store or using a steam competitor. if the cost was too high, people would not be using the service
Steam factually provides a huge amount of value to both developers and to players.
Steam is a huge success of capitalism. Suggest not using words like "rent-seeking" without knowing what they mean.
This is an outright falsehood. Other providers could host those games for much less than the 30% fee. Hosting costs are extremely low nowadays. It's basically nothing compared to the development cost of an AAA game. This is often many years and hundreds of people working on a game. The hosting costs are completely minor in comparison.
By your definition, any monopoly selling you strongly overpriced stuff would be a "huge success of capitalism". But it isn't. Just because something is useful, doesn't mean it can't be massively overpriced due to competition not working as it should. Proper market competition should ensure that no company can extract huge profit margins for trivial things. Like hosting games.
Considering how alternative storefronts can't even get automatic updates to work consistently, the most basic functionality of a games storefront (more important than purchasing even, since if you can't get what you purchased, it's useless), it actually doesn't seem obvious to me that other providers can easily host their own games. Even putting aside everything else Valve uses their cut for (hosting a community forum for every game, hosting a mod DB for every game that wants it, metrics tracking, opt-in soft DRM, providing server hosting, maintaining Proton so your game works on Linux), the cut seems almost reasonable even just for hosting when nobody else is able to do it right.
Why don't they?
I'm in the business and I've asked two different heads of large, very well-known AAA studios how they felt about Valve's percentage, and they basically told me the same thing: They had their teams do rigorous analyses of what it would cost them to 'replace' Valve for their games, and concluded it would cost roughly what they were already paying Valve. So they had no incentive to move off the platform. Look at how many publishers have come slinking back to Steam after trying to go solo -- there are good business reasons for that, and it isn't just about the stubborn fact of their huge social graph.
If it costs that much to replace Valve for your game, it's hard to argue that what they're charging isn't fair.
As others have pointed out, Valve does far more than just host. Shipping a multiplayer game and want comprehensive protection from DDoS attacks? Use Valve's datagram network for no additional fee. Don't want to host your own lobby servers? Use Valve's for no additional fee, they'll accommodate hundreds of thousands of players with no complaints. Want to sell your game in a zillion countries? Valve's got you, easy peasy. And discovery is a thing -- Valve sells a whooole lot of games just by putting them in the carousel in front of players. This is huge, huge value.
And as a player, I'm actually really happy, super happy, did I mention how incredibly happy I am with what they're doing with some of their cut: They saved gaming on Linux -- it's often better than Windows -- and I love my SteamDeck. So that cut is benefiting me directly as a consumer because they're spending it on initiatives I'm really passionate about.
Valve delivers a ton of value for the cost. If someone wants to try to do better, Valve's not stopping them, but I can tell you that as a player and a gamedev, none of the other options are remotely enticing to me. In my view, that's not Valve's problem to solve by cratering their own revenue.
Steam does far more than just host, and everyone who uses it knows this, so it's clear that you either have no idea what Steam does (in which case you should not be commenting) or you're actively lying about it.
Steam provides payment processing, cloud saves, ratings, game tags, social integration, wishlisting and sale notification, search indexing, game discovery, a bunch of incredibly useful APIs including networking and input, Linux compatibility, and many, many other things.
> By your definition, any Monopoly selling you strongly overpriced stuff would be a "huge success of capitalism".
This is not only false, due to the above value-adds, but intentionally false because I never gave a definition - you made one up and attributed it to me to lie about my positions.
And yes, there is competition - the fact that you don't know this is yet another indicator that you're totally ignorant of anything relevant to the conversation. There's the Epic Games Store, GOG, the EA App, Battle.net, the Xbox one/Windows Store, and more. And you know what the most popular one is, by a large margin, because it provides value to both devs and players? Steam. That's the market at work.
Your comments are false due to your total ignorance of reality, and your malicious lying about my statements indicates that you don't care that they're false - you'll say anything plausible, regardless of truth, to advance whatever agenda you have.
They seem to live in this bubble where steam is extremely bad or something.
Nothing is as good or as bad as it seems.
I think valve is still decent but I prefer Gog-games more if I can be honest, valve has drm but I appreciate their customer service from what I know and the amount of good games it produced like portal and the steam marketplace is still a very nice thing imo.
I don't think steam is rent-seeking at all and I agree with your statement on it.
Now I still believe that CS-GO's lootboxes are still an issue tho, maybe I am not understanding the significance of change so much
Steam still does nothing to prevent gambling for children and people selling the skins on the other websites, I am not understanding how this change changes that, I read some other comment in here which said that you can have contracts which convert the rare to extremely rare Only in steam marketplace so maybe they stopped the other shady websites/the youtubers they sponsor by limiting their influence....
I don't understand :/ I still feel like Steam had turned a blind eye to child gambling for a long time and Coffeezilla had made a video about it which I can refer to.
> There's the Epic Games Store, GOG, the EA App, Battle.net, the Xbox one/Windows Store, and more. And you know what the most popular one is, by a large margin, because it provides value to both devs and players? Steam. That's the market at work.
The same is true for linux/Windows as well. You could say that windows has the market at work but the point becomes moot.
It isn't as if there aren't better options (GOG) but that its rather good enough
Like I said nothing is as good or as bad as it seems, my opinion on steam is barely good enough partially because of its previous responses on turning a blind eye to the whole situation but maybe this is changing with this thing they did right now but I am still not sure how.
> The same is true for linux/Windows as well. You could say that windows has the market at work but the point becomes moot.
Yes, there's additional detail that I didn't add - that, unlike Microsoft, which used (and continues to use) anticompetitive tactics like paying PC manufacturers to include Windows as the default option, Steam didn't do anything anticompetitive to become the most popular - they were just the best - and they haven't done anything to unfairly leverage their dominant market position. That doesn't strike me as a problem - and my point to the GP was specifically that they're the most popular because they're the best, not because they did scummy backroom deals to get there.
I agree that GOG is probably better. But Steam is "good enough", and modulo the gambling problem, isn't really "bad".
> modulo the gambling problem, isn't really "bad". Can you please explain to me what you mean by this. I feel like valve enabled skins gambling which even underage people could do for a long time, so there is some truth about it and coffeezilla made a video about it https://www.youtube.com/watch?v=13eiDhuvM6Y
I am just saying the ethics of the company isn't perfect when they enabled gambling for a long time, I am not sure if right now it can be fixed or how this steps that they did right now fixes that problem if I am being honest.
Other services do the same for arbitrary online shops, at much lower fees. In fact, Valve likely doesn't even run it's own payment processing, but merely integrates other services.
> cloud saves, ratings, game tags, social integration, wishlisting and sale notification, search indexing, game discovery, a bunch of incredibly useful APIs including networking and input, Linux compatibility
The development cost of these features is likely no larger than of one single AAA game. Yet they charging 30% on hundreds or thousands of AAA games and other games.
> This is not only false, due to the above value-adds, but intentionally false because I never gave a definition - you made one up and attributed it to me to lie about my positions.
You clearly stated that Steam is fine because it is useful. But anything sold by a monopoly can be useful while still being massively overpriced. Which proves that mere usefulness of something doesn't mean the price of it is justified. Which refutes your original usefulness argument.
> And yes, there is competition
Yes, but the fact that there is theoretically competition doesn't mean it is working. Large platforms like Steam benefit from network effects which come from their size alone. People will simply stay at Steam because that's already were their other games are, and because they don't see the massive 30% fee, that Valve is keeping, as some cost they have to pay. Any other platform faces a "chicken and egg" style uphill battle against these effects, even if they charge a substantially lower fee.
> Your comments are false due to your total ignorance of reality, and your malicious lying
Rather than hurling insults at me consider the simple question: If Steam was so fairly priced, wasn't charging excessive fees, how can it be that they have an extremely high profit margin? Realistically, that can only be because Valve's revenue from Steam vastly exceeds the costs of running and maintaining it.
> The development cost of these features is likely no larger than of one single AAA game
Then surely Epic, or Microsoft, or Sony could just easily create one. There being literally 0 such services means it's likely a bit more difficult than one AAA game :) So your argument is invalid.
I still prefer steam even if its more expensive than other marketplaces. They provide real value over just distribution, like their return policy.
Irrelevant strawman argument. It doesn't matter that Valve doesn't run its own payment processing - it still provides an easier platform for use than going to Stripe and figuring out how to connect user purchase to game licenses.
> The development cost of these features is likely no larger than of one single AAA game. Yet they charging 30% on hundreds or thousands of AAA games and other games.
OK, so now you've both admitted that you were factually incorrect on your original assertion that the only value that Steam provided was hosting, and you've moved the goalposts from "Steam doesn't do anything except hosting" to "well those features aren't worth the cost", which is completely different.
So, we've completely disproved your original claim that Steam is "rent-seeking", because these features provide immense value to both developers and players.
And, that claim about "The development cost of these features is likely no larger than of one single AAA game"? Completely unfounded. Extraordinary claims require extraordinary evidence. Multiplayer networking is hard, and you're claiming that ALL of the features that Steam provides are comparable to that of a single AAA game.
Also, funny that you mention "one single AAA game" - whose costs can go into the billions of dollars.
> You clearly stated that Steam is fine because it is useful.
Stop trying to justify your lying about my points, please. Admit that you acted dishonestly out of malice and we can move on to any actual points you might have.
> But anything sold by a monopoly can be useful while still being massively overpriced.
More goalpost-moving (you originally claimed that Steam was both "a failure of capitalism" and "rent-seeking" - these claims are completely different), that turns out to not even be relevant because Steam is a monopoly along no relevant dimension. There is nothing that prevents you from creating both a Steam account and an Epic Games account, or a developer from selling on both Steam and the EA store. You can even install non-Steam games on Valve's own hardware. You even concede that there is competition later in this very comment.
> Which proves that mere usefulness of something doesn't mean the price of it is justified. Which refutes your original usefulness argument.
No, it doesn't, because both your first point has no connection whatsoever to your second, and you neither proved that Steam was overpriced, nor actually refuted any of my points as stated in my comments - merely twisted and lied about them. Where do I say "useful" in my original comment?
> Large platforms like Steam benefit from network effects which come from their size alone. People will simply stay at Steam because that's already were their other games are, and because they don't see the massive 30% fee, that Valve is keeping, as some cost they have to pay. Any other platform faces a "chicken and egg" style uphill battle against these effects, even if they charge a substantially lower fee.
This is fallacious. There is no "stay at Steam" - as previously stated, there's zero mutual exclusion between Steam and other platforms on either the dev or the player side. And there's no "chicken and egg" uphill battle either, because Steam accounts don't cost money, and so unlike trying to start a new paid streaming platform where you can't attract users because there's no content, and you can't sign content deals because there's no users. This is an inaccurate, irrelevant, and dishonest analogy.
> Rather than hurling insults at me
You literally lied about my points. That's not an insult - that's a fact. Don't lie if you don't want someone to correctly describe when you're lying.
> consider the simple question: If Steam was so fairly priced, wasn't charging excessive fees, how can it be that they have an extremely high profit margin?
That's a twisted definition of "excessive". Your "excessive" is "Valve charges more than it costs them to provide services". Very few people in the real world (which includes me, most HN users, and most people who actually play games, given that you probably don't) actually operate on that model, and instead consider "excessive" to be either relative to value delivered to them, or to comparable alternatives. Almost nobody, when making a value decision about whether or not to buy a new phone consider the profit margins to the phone manufacturers - they only care about the value delivered to them, which is as it should be, because...
> Realistically, that can only be because Valve's revenue from Steam vastly exceeds the costs of running and maintaining it.
Valve does not have an obligation to price their services at cost, or close to cost. They're entirely entitled to price their services at the amount of value delivered to their customers, without any judgement whatsoever.
So, to summarize - we've objectively refuted your claims that Steam is "rent-seeking", pointed out several more dishonest rhetorical tricks and redefinitions of common words that you've used, including revealing that your claims of "Valve bad" are merely personal indignation that Valve makes more money than you think that they should, and confirmed that yes, you did lie about my earlier points.
This doesn’t mean they’re viable investments.
I could see an argument that there's an issue with closed ecosystems where value of an item can be changed after someone has obtained it due to control by a centralized provider, but that's completely different concern to the idea of gambling being harmful.
The loot box issue is in part how easy it is to take this stuff to excess. My 8 year old niece racked up ~1,500$ worth of charges in a game when AT&T messed up permissions after a cellphone upgrade. It’s shockingly easy for people to blow arbitrary money on this stuff as the industry is optimized to be predatory as whales make up the bulk of profits.
So I suspect physical stores being really skeptical if an 8 year old showed up to buy a grand of Pokémon cards likely tampered the backlash.
I don't even like it when targeted at adults, but we allow adults to do far worse when it comes to gambling. A lot of our hollow economies depend on it. But you really have to be a moral sewer to pay your rent from kids hoping to open the right bag to hopefully energize their often very narrow, often very autistic social lives. At best you're a carnie.
So there's one data point, take it as you will.
Market makers do not control the supply of goods. They provide resting liquidity for pre-existing goods.
Similarly, market makers do not get to establish rules of the of their own "reality". Market makers are participants in a venue. It is the venue/exchange that sets the rules.
User Bengalilol seems to have inferred that because Valve made the venue, he can refer to them as the "market maker". This is not correct. Words have meaning. The meaning of market-maker is well-established in the context of exchanges. Market maker is incorrect terminology for Valve’s role.