Wolfire Games, developer of "Overgrowth" and "Receiver," alleges that Valve is taking advantage of its dominance of the PC game market through Steam to stifle competition while "reaping exceptionally high profits from nearly every sale that passes through its store." Allegedly, the company sued Valve for antitrust violations.

Steam's ubiquity means that if developers and publishers want to reach as many users as possible on the PC, they must use Steam and thus comply with Valve's terms of service. This means not only paying 30% of all sales (unless you have more than $10 million in sales), but also agreeing to pricing restrictions that prevent other storefronts from being able to compete on price; Valve does not allow developers to set low prices on storefronts other than Steam or to sell Steam keys through other distributors, or sell Steam keys at lower prices through other distributors (as alleged in the lawsuit).

In Wolfire's view, this sucks for gamers as well as game makers. He says, "Because they can afford Valve's 30% fee, game publishers have to raise their prices to consumers and can afford to reduce the resources they invest in innovation and creation. 'Gamers are being harmed by paying higher retail prices due to Valve's higher fees. Competition, production, and innovation are stifled in ways that cannot be fully remedied by damages alone."

The lawsuit claims that Steam's market dominance can be seen in the fact that other storefronts, including those run by large, well-funded companies like Electronic Arts and Microsoft, have failed to make meaningful headway against Steam Origin, Microsoft Store, and other stores like Ubisoft and GOG have survived, but hold a relatively small slice of the market.

Even the Epic Games Store is cited as a failure in the lawsuit. This is because Epic Games Store is currently Valve's main competitor in the PC digital market, but could only do so by spending hundreds of millions of dollars on exclusive contracts with publishers. Nonetheless, it has a relatively small market share of about 15% as of June 2020.

Presumably intended to point out the less obvious hurdles faced by Steam's alleged competitors, the lawsuit also points out that Epic's efforts have resulted in significant animosity toward the company.

"For example, the release of Borderlands 3 for the EGS Platform (rather than the Steam Gaming Platform) caused a backlash among some gamers, with reactions including 'calls for boycotts, YouTube rants, conspiracy theories, and review bombings.' One user even called for a boycott of the game on the online community Reddit. One user started a petition on the online community "r/gaming" on Reddit. The user claimed that "Epic Games cannot be left alone to continue to buy exclusive rights to their [expletive] launcher. This is a very anti-consumer act, literally, Epic is [abusing] us purchasers by paying millions of dollars to 2K... To ensure that Epic does not get our money, PC'ers really need to boycott the game until it is released on Steam. I recommend it."

(But despite the misfortune, "Borderlands 3" was a huge hit, memorably becoming 2K Games' highest-grossing PC game ever.)

Indeed, the lawsuit quotes Epic Games CEO Tim Sweeney as saying that the company may even "rush away from exclusivity" and bring its own games to Steam if Valve offers a more competitive platform

Wolfire has stated that the company may even "rush away from exclusivity" and bring its games to Steam if Valve offers a more competitive platform.

Wolfire and co-defendants William Herbert and Daniel Escobar (residents of Florida and New York, respectively, who "paid ultra-competitive prices for PC desktop games" because they purchased them through Steam) seek ordinary damages, costs, and attorney fees. They are seeking But they also seek "injunctive relief to eliminate Valve's anticompetitive provisions," which they say is necessary to "bring competition to the market and benefit the public as a whole." "

Calling for a virtually total restructuring of Steam's business practices is a big ask, but not completely out of reach; Epic is willing to take losses and is fighting back against Steam in ways no other competing storefront has, and the ripple effects are starting to show: In a recent GDC survey, a majority of respondents said Steam's 30/70 revenue share was not reasonable, and earlier today, Microsoft cut the distribution it receives from game sales on its store from 30% to less than half, to 12%.Apple also has a $1 million annual Apple also halved its 30% revenue cut for its App Store for developers making less than $1 million annually, and the Google Play Store is expected to follow suit this summer.

This is the second such lawsuit against Valve this year: in January, a similar lawsuit was filed on behalf of five individuals alleging that Valve uses its dominant position in the market to keep game prices high, but the lawsuit also named CD Projekt, Ubisoft, Devolver Digital, and several other developers and publishers were named.

The full text of Wolfire's lawsuit against Valve is available on Scribd; we have asked Valve for comment and will update if we hear back.