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Comment by cubefox | Hacker News Reader

Apparently they don't, this says 12% to 15%: https://www.techradar.com/pro/microsoft-just-dropped-its-sto...

That's still higher than what seems reasonable for a simple store front, but they aren't as bad as Valve or Apple.

Note that Valve is a relatively small company with only a few hundred employees, but with one of the most extreme revenue-per-employee ratios in the world, estimated at $19 million per employee:

https://upptic.com/valve-structure-employment-numbers-revenu...

That's orders of magnitude higher than companies like Apple, Elsevier or Nintendo. Steam is basically free money for Valve. Valve is extracting huge rents (around 6.5 billion yearly revenue) for negligible expenses (only 79 people working on Steam).

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> That's still higher than what seems reasonable

Based on what? Your arbitrary standards. I still don't understand what's wrong with 30% for everything Steam provides as a platform. It's perfectly acceptable. It's not making indie developers poorer. It helping to ensure Valve can focus on the things that matter to them and do things like invest in Steam Input, Proton, SteamOS, and Steam Deck/Machine/Controller/Frame/etc. And it's still significantly better than the times when your only option was brick and mortar, where you maybe got 10-30% as the developer.

Every other digital storefront does far less and still takes 15-30%. Why is Valve the big boogey man and everybody else is free to charge whatever they want on developers while doing fuck all for anybody but themselves?

> Based on what? Your arbitrary standards.

Based on a strongly and persistently imbalanced ratio of revenue to expenses, which indicates a form of market inefficiency.

https://en.wikipedia.org/wiki/Economic_rent#Monopoly_rent (the mentioned network effects are basically what drives Steam rents)

> I still don't understand what's wrong with 30% for everything Steam provides as a platform. It's perfectly acceptable. It's not making indie developers poorer.

Of course it makes them poorer if a big chunk of what you pay for their games goes to Valve.

> It helping to ensure Valve can focus on the things that matter to them and do things like invest

But they basically aren't doing that. If a company has an extreme revenue-to-expense ratio, it means they are hardly investing any of their revenue. They only have a few hundred employees while making around 6.5 billion per year.

> Every other digital storefront does far less and still takes 15-30%. Why is Valve the big boogey man

Well, Microsoft seems to do 12-15% in the Microsoft Store. And I fully agree Apple is significantly worse than Valve with iOS, because there is no way to circumvent the 30% fee in iOS; indeed, it wouldn't even be possible to offer a software like Steam on iOS. (But it should also be noted that Apple has a much lower revenue-per-employee ratio than Valve, indicating that they reinvest a lot more of their revenue.)

There's a reason everyone else who comes to take on this "market inefficiency" fails. Amazon threw billions at it. So did Google. So has Epic. And Microsoft.

None of them dethroned steam, so 30% is still the cost to access the steam user base.

If tens of billions can't overcome this "inefficiency" then it sure seems like there might be more to the story than economics 101.

The fact is that Steam has an incredibly loyal _userbase_ and you won't convince them to leave unless steam betrays their trust, which they haven't.

The trust in any competitor is nearly 0 compared with Steam which has been a platform people have loved and used for over a decade now with basically 0 issues. No corporate missteps.

Arguably the biggest controversy is the latest way they made CS2 loot boxes less valuable, popping the insane bubble in the skins market. That's still ultimately good for the average gamer and I expect they'll come out smelling like roses.

> There's a reason everyone else who comes to take on this "market inefficiency" fails.

Yes, network effects, as discussed in the Wikipedia article linked above. It's the reason why Facebook or Twitter are so hard to replace, or eBay, or Amazon. In these cases larger platforms benefit from the fact that everyone else is already there, which makes switching hard. That doesn't mean they are inherently better though. They can even be significantly worse than alternatives, apart from network effects.

Part of the reason why these companies are still around and strong is because they continue to innovate. Facebook spun up Instagram for younger folk, Amazon has some of the best shipping/warehousing/distribution in the world. eBay has slowly become less relevant for local p2p purchase because its market share got eaten up by Facebook Marketplace.... Twitter had a big chunk of its userbase eaten up by Threads, hey I'm seeing a pattern here?

Ascribing my entire comment to network effect makes me wonder if you even read it.

> It's not making indie developers poorer.

Are you sure?

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