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A class action lawsuit was filed in federal court in Calfornia last week against Valve and several game developers, alleging that Valve is “abusing the market power of the Steam platform” to prevent other distribution platforms from games, such as the Epic Games Store and Microsoft Store, compete on price.
As reported by The Hollywood Reporter, the lawsuit specifically concerns a “ most favored nations ” provision that Valve is pushing developers to accept in the Steam distribution agreement. Basically, the developers who release their game agree that their Steam version will be priced at the same price as the game offered on other platforms.
The lawsuit states that “the ability to provide PC games to consumers at lower prices is a way for a business or new entrant to gain market share. If this market worked well i.e. if the Steam NPF system did not exist and the platforms could to compete on price – the competing Steam platforms would be able to provide the same margins. (or more) to game developers while offering lower prices to consumers. “
Their five plaintiffs bringing the lawsuit allege they have been “forced to pay supercompetitive prices” because of the most-favored-nation provision.
Along with Valve, the lawsuit names several game developers who signed the Steam distribution agreement as defendants, including CD Projekt, Ubisoft, kChamp Games, Rust LLC and Devolver Digital. I have requested a comment from Valve and will update this post if they respond.
The price of games is not entirely dictated by the operator of each platform, but set by the game developers and publishers themselves – albeit in partnership with the operator of the platform. Removing the “most-favored-nation” clause from Valve’s developer agreements would therefore not automatically mean lower prices on other stores. Even if Epic cuts sales, developers can simply decide to keep the profits rather than passing the savings on to the consumer.
That said, that would put the choice in the hands of the developers rather than Valve, and it would allow Epic and other platform operators to offer price drop incentives to developers. It’s not hard to imagine Epic paying developers to get them to sell their games for less on the Epic Games Store, just as they are currently paying to offer free and exclusive games.
You can read the full complaint on The Hollywood Reporter.
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