Valve is currently embroiled in a U.S. antitrust lawsuit with developer Wolfire, which claims that the Steam platform holder is using its position to unfairly crowd out rivals and control game prices Valve tried to have the case dismissed, but in May 2022, the court ruled that it could proceed with some changes and enter the discovery phase.

Among these documents are spicy exchanges between Epic CEO Tim Sweeney, Valve CEO Gabe Newell, COO Scott Lynch, and Project Manager Erik Johnson (first discovered by GameDiscoverCo's Simon Carless). The context of both exchanges is, broadly speaking, store pricing and the fees Valve takes on Steam sales in particular, which are also Sweeney's favorite topics; the first chain of events in 2017 was sparked by comments leaked from Steam's developer forums in particular, and in which Valve's Shawn Jenkins erroneously stated that Steam might start limiting the keys it offers to developers:

On August 12, 2017, Gabe Newell emailed Tim Sweeney, saying, " Anything we are doing to embarrass you." We speculate that Shawn Jenkins' public goofiness may be part of it.

Sweeney replies to Newell and Valve's Eric Johnson, "I'm not bothering you and I've never heard of Sean Jenkins" (poor Sean). Sweeney then adjusts his flight goggles and prepares to take off on one of his pet peeves: the 30% Steam platform fee. Sweeney writes, "But now that the scale has increased and operating costs have decreased, while new games are released so quickly, the short marketing and UA value offered by the storefront is far disproportionate to the fee."

Sweeney opines that if one were to remove the top 25 games sold on Steam, "Valve's profit from most of the next thousand would be more than the developer's own profit: 30% to Valve, 30% to marketing, 30% to servers and engine costs, 15% for the servers and engines," he calculated, "75% is taken by the system, leaving 25% for actually making the game.

If Valve employees answered Sweeney, they are not included in this disclosure. Perhaps this is why Sweeney was even more unhappy in December 2018. At that time, Valve was introducing royalty changes that seemed custom-made to make Sweeney froth at the mouth; Sweeney is not only thinking about the little guy, but right now, with the launch of the Epic Games Store and the antitrust battle between Epic and Apple (which is still ongoing).

Sweeney sent an email to Gabe Newell and Scott Lynch, outlining the issues with Apple and informing them that the launch of the Epic Games Store is imminent. The store is a direct competitor to Steam, and Epic has a flat 12% platform fee, thanks in part to Sweeney's dictum; Sweeney wants Valve's response, primarily to bolster Epic's opposition to Apple, he clarified, hasn't learned many lessons in the art of gentle persuasion:

"Now you idiots are telling the world that the strong and powerful get special terms and 30% is for the little people," Sweeney writes. Sweeney continued, "If Apple tries to make backroom deals with the big publishers and keep their monopoly and 30%, we're in for the long haul. Why not give all developers a better deal?" What better way to quickly convince Apple that their model is now completely untenable?

The next day, Valve's Scott Lynch sent this email to both Gabe Newell and Eric Johnson with a one-line comment: "You are crazy.

Perhaps Tim Sweeney was quite mad at that moment. And while some might see Lynch's response as rather cavalier, it should be noted that it was of course not intended to be seen outside of Valve. Sweeney then sent an email to two Valve executives, telling them he was launching something that would compete directly with their platform, criticizing the way Valve's store is run, ranting a bit about Apple, ranting a bit more about Apple, and calling them "assholes." In other words, a bold move by Cotton.

Wolfire's lawsuit is far more extensive than just these emails, and Carless raises the interesting question of who exactly is funding the small business against Valve. A lawsuit of this magnitude is eye-poppingly expensive and Valve has big pockets, but it is not clear where Wolfire is getting its funding; Wolfire is now asking the court to resolve the lawsuit as a class action, reiterating its core argument regarding pricing ...

The lawsuit is, frankly, a mixed bag of different elements regarding how Steam works, and the claims regarding Valve don't seem very coherent. Still, it gives us an idea of what was going on behind closed doors when Epic was trying to launch a major Steam competitor.

CORRECTION: An earlier version of this article incorrectly stated that Scott Lynch was replying directly to Tim Sweeney. He was commenting on emails Sweeney sent to Gabe Newell and Eric Johnson.