Are Valve and Steam Helping PC Gaming or Hurting It?

When Valve launched Half Life 2 back in 2004, it didn’t just ship the sequel to one of the greatest first-person shooters ever made. Bundled along, as a mandatory component of the experience, was a service called Steam. Gamers, including those who bought boxed copies of the title in their local computer stores or GameStop (back when GameStop had a PC section) had to sign up for a Steam account and register the game online. The nascent Steam servers promptly buckled under the load, and the reaction from PC gamers was harsh, to say the least. Gamers hated Steam when it debuted, which makes it all the stranger that the service has gone from a loathed component required for a specific title to the primary means of delivery for nearly every PC game.

Over at Polygon, Tim Colwill has written a lengthy article on how “Good Guy Valve’s” reputation is both unearned and, in some cases, directly contrary to its own actions. He writes: “Perhaps Good Guy Valve did exist, at one time. But beneath the glassy smile of Good Guy Valve today lurks an altogether more cold and corporate beast, a textbook rent-seeker that is profiting from both hostile practices and a bizarrely customer-supported near monopoly on PC game sales.”

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Colwill goes on to detail some of the nastier items in Valve’s metaphorical closet. Valve fought tooth and nail to avoid its legal requirement to offer European Union customers refunds, including going so far as to require customers to waive their right to a refund as a condition for buying software. It went to court in Australia to attempt to avoid consumer protection laws there as well and argued that any statements about its own profitability could damage negotiations with publishers, as well as its reputation with consumers in general. Valve also argued that its standing could be harmed if customers and companies knew that it was a highly profitable business, and that this could lead other companies to negotiate harder. Valve was ultimately fined $ 3 million for its violations of Australian law.

But Valve’s worst behavior may be its treatment of artists who sell goods via Steam Workshop. In 2011, Valve announced it would allow 3D modelers to sell hats, skins, and items for games like Team Fortress 2, Dota 2, and CS:Go. In 2015, the company boasted that it had paid out $ 57 million to 1,500 contributors in 75 countries, a respectable achievement. But given that Valve only paid out 25 percent of the total, that means the company pocketed $ 171 million during the same period from the sale of those same goods.

And Valve, like a number of other platforms where end-users / contractors make money, has been slashing its pay rates. In 2015, Valve slashed the royalty rate for items included in the fifth international Dota 2 championship to 12.5 percent, down from 25 percent. In 2016, it made further changes to how it calculates royalties and payouts that slashed earnings further. According to one artist Polygon spoke to, they’ve gone from earning 25 percent of a commission to something more in the 5-8 percent range. Furthermore, since the prize money for Dota 2 championships is based on player funding, and Valve only contributes 25 percent of player spend to the prize pool, it means the other 75 percent of contributions are just additional padding for Steam’s bottom line. The 2016 Dota 2 prize pool was nearly $ 20 million, and you can do the rest of the math from there.

Four years ago, Valve announced that Steam Workshop items would be resellable on the Steam Community Market, and that the artists who created the original items would receive a commission off these sales. Re-sales, as Polygon notes, are “in full swing today.” But the promised payments to the original artists? Yeah. That never happened.

Does Valve deserve its sterling reputation?

The Polygon piece is detailed and well-sourced, and I’ve only touched on some of its points. But the overarching point Colwill makes is that many of Valve’s actions are, at minimum, as bad as things we savage other companies for. Steam’s customer service, for example, is a joke. As an application, Steam is in need of a severe, ground-up redesign — additional capabilities and options have been literally shoved wherever Valve could find room, rather than thoughtfully or intelligently placed.

Services like Origin or uPlay are derided as greedy cash-grabs from awful corporations, but the “crime” of those companies is wanting to control their own digital distribution. Men like Tim Sweeney have excoriated Microsoft’s feeble attempts to promote the Windows Store as a gaming destination, but Steam takes its own 30 percent cut of each and every sale. To be clear, I wouldn’t buy games on the Windows Store either, but my objections are anchored in the overall quality of its software and the artificial limits some publishers have placed on the Windows Store versions of their games, not in any fundamental argument against buying a game from Microsoft’s storefront.

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Steam, in one of its early incarnations. Click to enlarge.

I’m going to slip off my ExtremeTech hat for a moment and speak as a PC gamer who has covered Valve and Steam since the latter launched, but who was unaware of many of the specifics raised in the Polygon piece. I think Colwill is right that Valve has often gotten an unconscious pass on behavior that has been condemned when it came from other sources. I think gamers were quick to slam EA for being greedy when it launched Origin, not necessarily because EA was one jot greedier than Valve, but because Electronic Arts is a company that gamers generally loathe, even as they purchase the titles it publishes.

When people make judgments about companies, personal experience is typically given high priority. And some of the issues that Polygon discusses are only issues if you belong to certain groups of people (Valve employees in one instance, content creators who have tried to make a living on the platform in another).

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GoG is the closest thing Steam has to a competitor, but its sales are believed to be a fraction of Valve’s.

But there’s one other thing I’d like to say, one that speaks directly to Polygon’s argument that Steam’s dominance of PC gaming isn’t necessarily good for gamers. Last week, ExtremeTech Deals (an area of the site I have no contact with) ran a deal on Windows 10 keys, as distributed by SCDKey.com. I actually bought two of them myself, along with a few other games I wanted. But before I pulled the trigger on my purchases I did some additional Googling to see if the site was legitimate, because it was offering a lower price than Steam was. Granted, some of that suspicion was because I’d never used SCDKey before, but I still had an unconscious assumption that whatever the Steam price for a game was, it corresponded to the “real” price. The “best” price, if you will.

That kind of bias isn’t something I set out to cultivate. When it comes to PC hardware, I’ve spent hours crawling the web looking for the best laptop or component deals. But Steam has such a lock on the PC gaming market, I automatically assume a link between the best price and the price on Steam. That’s great for Valve. It’s not so great for me. And it illustrates, in at least a small way, the point that Polygon set out to make. Give the full piece a read — it’s worth it — and sound off with your own thoughts below.

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