The lawsuit against Steam’s 30% cut of game sales is now a class action, meaning many other developers could benefit

An ongoing lawsuit against Valve over Steam’s “anti-competitive” practices, and especially its infamous 30% drop in revenue per game, has taken an interesting turn. According to a report, it is now a class action lawsuit that could benefit any developers or publishers who sold a game through the Steam Store on or after January 28, 2017.

Here’s the broad background: In April 2021, Overgrowth developers Wolfire Games filed an antitrust lawsuit against Valve in the US, arguing that Steam is using its dominance in PC game sales to disrupt the market and reduce competition to bury, and in particular that the company’s foundation 30 A percentage cut in revenue from each video game sold on Steam keeps overall game prices artificially high, with Valve allegedly putting pressure on developers not to sell their games for lower prices to sell in stores with lower commission costs.

“I believe Valve is taking away gamers’ freedom to choose how much extra they are willing to pay to use their platform,” Wolfire founder David Rosen said at the time, as captured in the GameDiscoverCo newsletter. “I believe they are taking away the freedom of competing stores to compete by taking advantage of their lower commission rates. I believe they are taking away the freedom of developers to use different pricing models.”

As you’d expect, Valve has pushed all of this back. In July 2021, the company accused Wolfire of failing to provide evidence for their allegations, while describing the 30% cut in base earnings as an “industry standard” – a claim that, while not unfair, runs counter to both growing dissatisfaction from developers as competitors such as Epic Games Store and the Microsoft Store have reduced their commission costs in recent years.

Wolfire’s lawsuit was ultimately dismissed at Valve’s request in November 2021, with the judge in the case arguing that Wolfire had not shown that she or anyone else had been harmed by Valve’s management of Steam. The judge also noted that the fact that rival stores like EGS have received a smaller cut and nevertheless failed to usurp Steam is evidence that developers and publishers largely consider Steam’s offering worth the price.

The judge further rejected Wolfire’s somewhat bizarre claim that Valve illegally linked the Steam store (which sells the games) to the Steam platform (which includes social networking features, performance tracking, game library management, and so on). The judge ruled that the Steam store and the platform are, instead, a single product, with game sales funding the platform’s various ‘free’ features.

Wolfire was given 30 days to amend their case, address the criticism of the dismissal and provide additional evidence. This they did, adding enough context to the original claims that the court ruled in May 2022 that aspects of the antitrust case could move forward. In July 2022, a court order also confirmed that Wolfire’s lawsuit would be joined with another, similar antitrust lawsuit against Valve filed by multimedia production and VR company Dark Catt Studios.

Fast forward to today, and GamesIndustry.biz reports that the combined lawsuit has been recategorized as a class action lawsuit. A class action lawsuit is broadly a lawsuit filed on behalf of a group of absent people that extends beyond those who actually appear in court. In the event that the plaintiffs win, everyone in that group of people benefits. There’s an absolute world of finicky legal details within that vague definition, mind you, even if you limit your focus to the laws of a particular country.

According to GamesIndustry’s James Batchelor, the class action applies to any developers, publishers or individuals who paid a commission to Valve in connection with the sale of a game – referring to the 30% cut the Steam company takes on every purchase – on or after January 28, 2017.” GI also reports that Valve has denied Valve’s request to exclude the testimony of a particular expert named Dark Catt and Wolfire – the economist Dr. Steven Schwartz.

All of these legal wrangles are part of the industry’s larger, existential row over Valve and Steam’s central role in PC gaming. My extremely Baby’s First Monopoly view is that whatever your feelings about specific aspects of Steam’s service, or Valve in general, no individual company should wield so much power over the fortunes and overall culture of an art form. As such, I welcome attempts like Wolfire’s to challenge Valve and Steam, even though I may not agree with the details of the suit in question.

What happens if Wolfire and Dark Catt win? According to my “PhD in Googling” knowledge of class action law, this potentially means that Valve would have to compensate a large number of parties, which amounts to much more than if they had had to compensate Wolfire and Dark Catt alone. This in turn could lead to a bigger policy change at Valve, which would have dramatic consequences for PC game publishing as a whole.

If you want to delve into the nitty-gritty of the legal process, the GameDiscoverCo newsletter is worth signing up for. One question it raises is where exactly Wolfire and Dark Catt get the money for their legal fees, given the enormous costs of discovering and gathering evidence for a case like this.