Valve strongly opposes the antitrust lawsuit, criticizing the plaintiff for unrealistic arguments

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2021-08-03 13:01:23

Valve has issued a very harsh response after game studio Wolfire filed a lawsuit against the Steam store with antitrust and anti-competitive allegations. In its response, Valve countered that the lawsuit should be dropped because it “failed to document the most basic components of an antitrust case”.

No rights for free game code:

The central part of Wolfire’s argument is that Valve requires that free Steam game keys (Steam Keys) created by developers whose products are on Valve’s platform will not be sold on other platforms. for less than the price on Steam. But Valve side argues many times in its profile that they “There is no obligation to distribute the Steam Key, let alone allow developers to use the Steam Key to undercut the selling price on Steam compared to other stores.”

The free game code generation system, according to Valve, was created as a way to “giving developers the freedom to sell or give away a reasonably limited amount of their games on Steam”. With that in mind, the restrictions on the non-Steam selling prices of these game codes are intended to “avoid developers taking advantage of Valve’s investment in Steam for free”. Price and quantity guides “prevents developers from taking huge amounts of sales from Steam, a platform that Valve incurs 100% of the costs of creating and maintaining, while still providing it to users for free.”

Epic Games Store is becoming a base for many criticisms towards Steam and Valve

Valve further expressed by citing precedents and antitrust laws to show that “Valve is under no obligation to compete with itself…nor is Vavle obligated to continue to provide [Steam Key] for free, or create them in unlimited quantities, or allow developers to use them to sell Steam titles in other stores for less than Steam.”

Wolfire’s lawsuit also alleges that Valve sought to force equal pricing not only for game codes on Steam but also for non-Steam versions of the same product sold on other platforms. Valve responded that they were not impressed with the basis of this allegation, which according to Valve is “an anecdote about Valve telling an anonymous developer that they shouldn’t give away a non-Steam-integrated version of Discord’s competing platform if they charge $5 for a Steam-integrated version on its platform.” Valve.”. Valve’s thesis on that single case is “failure to allege market-wide coercion or to have any effect on competition at all.”

Wolfire also presented evidence that many games are sold for the same price on Steam and other platforms even though these platforms charge lower fees. But Valve counters that this practice of equal selling is common, usually on all platforms. And even if this were not the case, the petition would be lacking “any real allegation that Valve did anything to influence developers to sell at the same price on two identical stores, let alone coercion.”

Competitive rate

In its response, Valve also criticized Wolfire’s claim that Steam’s 30% fee is higher than that of a “competitive” market without any real data to back it up. Valve criticized “The plaintiffs just put together an economic model in which Valve’s 30% fee would decrease over time.”

Valve then pointed out that they never raised this fee “since Steam started out with zero market share, and since then it hasn’t been able to charge any fees without competition.”. On the other hand, in 2018, Steam even reduced the flat fee for high-grossing titles, an action that Valve says is highly competitive.

At this point, Valve points to the 2008 antitrust lawsuit against the then-defendant Apple and its iTunes music marketplace. In that lawsuit, Apple was successful in pointing out that it kept the base price of $0.99 per song. “both before and after they have a monopoly – and never change that price, even when a big seller (Amazon) enters the market.”

Valve strongly countered the antitrust lawsuit, criticizing the plaintiff for unrealistic arguments - Photo 2.

iTunes is the largest electronic music marketplace in the world, and has the same status of “first mover” as Steam

The fact that Steam’s 30% fee is higher than competitors like the Epic Games Store is a reflection that “The market has determined that Steam is in the upper echelon…which is stable given Valve’s ability to adjust prices higher”, according to Valve. To support this point, Valve cited a passage from Wolfire’s own lawsuit, describing the consumer outcry when Borderlands 3 was not available on Steam.

“The Steam Platform brings real value to gamers and developers, not just an intermediary”, wrote Valve. “Even so, many gamers love Steam so much that when Epic released popular games exclusively on their Epic Games Store, Epic was met with reactions and calls for boycotts from gamers who have to waiting for a Steam-integrated version or using a PC gaming platform they don’t like.”

How big is Steam?

Wolfire’s lawsuit claims that Steam alone has a 75% market share in PC gaming, which means most PC game publishers have little choice but to sell their games on the platform. But Valve insists that this lawsuit “no actual data available” to prove it.

Valve also goes on to argue that measuring Steam’s market share cannot be done “intuitively” in a market that includes both “game hosting, social media, a leaderboard system and a game mod community”, not just basic sales or distribution.

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