All thanks to Epic for spearheading this effort. We do not want 30% cut takers in the age of digital distribution. It's parasitic way of making money. Apple (also Steam) does not deserve to earn billions from software they have contributed nothing to. They're akin to digital feudal lords and we must fight this.
Steam contributes a great deal to the games under their platform. They include all sorts of cool features like achievements, reviews, downloads, DLC distribution, Steam Workshop, user statistics, and other cool features on top of excellent marketing. In addition, Steam does not lock it's users into using just their platform. You can add non-steam games to your library and use other stores on your Steam devices.
In addition, Steam happily allows publishers to sell their games on other platforms and does not create 3rd party exclusivity agreements.
Personally I would consider Steam to be absurdly democratic in their distribution model.
Also Steam keys and Proton. I heard they often don't charge for them. Valve has made Linux gaming into a real alternative to Windows. Much better than MacOS.
> So, genuine question here: do companies have to pay full price in order to finance a technology that is used by 5% of their daily users?
As far as I know; Valve has cut the rate for larger companies.
> Of course this is a "devil advocate" question, but I would not consider Valve as "safer" than any other game / tech companies to be honest...
I do not know what the point of this comment is. We were not discussing if a company is 'safer'. As one US judge said when an Indie game company sued Valve and lost; the 30% rate is common among digital platforms. The point myself and the above poster made was that Valve does a lot more then most platforms that do charge 30%. Myself as a Linux enthusiast is very thankful for Valve for their work on Proton and Mesa.
You are not investing in Steam, you are paying them for something. Whether that is marketing, content distribution, or additional features. When you buy a car and don't use the seatbelt or turn signals, you are not paying for everyone else to have a seatbelt and turn signals. It just comes with the car.
Many of those features just encourage technical lock-in, though. Microsoft offers DirectX and a bunch of features for free. Why? You'll (mostly) be using them on Windows, so it helps build/maintain the moat and makes it harder for limited-resources developers to move elsewhere.
If that were true, you'd think you see more steam exclusive games. The problem is I can't think of a single one I own that is steam exclusive. I am sure there's at least one out there.
Half-Life, Counter-Strike, Portal, and their sequels are all Steam exclusive. The only mandated Steam exclusives are Valve games. Anything else is purely out of convenience for the developer.
I realize you're probably referring to PC gaming specifically here, but it's interesting to note that Portal and Portal 2, at least, (haven't checked on the others) are available on the Nintendo Switch store.
Whether 31,000+ constitutes a lot of games depends on your personal definition. You said you'd think there were more, so I'm guessing you were thinking of a bigger number.
AFAIK developers generally don't announce when a game is exclusive to Steam, so that's probably as close to a definitive list as there is. And I don't know how accurate it is, either, as I haven't inspected it.
I assume one of the things that's missing from the list are games that used to be exclusive. E.g., Borderlands 2 was (on PC) exclusive to Steam for something like 7 or 8 years, but it's presumably not on the list since it eventually became a non-exclusive title.
Right. "Steam exclusivity" is not a thing where there's exclusivity contracts or anything like that, but rather developers "just" deciding other stores are not worth the effort right now. Both in just being additional effort to setup/promote and for smaller titles it can be important to have all initial sales happening in one place, because ranking on Steam (and other stores) is tied to getting enough sales/reviews/... happening quickly. And then some add GOG etc only later to catch the long-tail of sales there too.
(and I guess Valve first-party titles are a special case of course)
Fair point. It's interesting though I have a large steam library (1000+ games) and the intersection with this is very low. How many of these games actually have sales?
But regardless, the point was that steam features provided vendor lock in. I doubt that is the case for many of thees games. It's likely just that steam is the most popular marketplace.
A counterpoint to consider: Tim Sweeney says his Unreal (studio) customers that use Steam (which is nearly all of them) are worse off than the retail era:
>Generally, the economics of these 30% platform fees are no longer justifiable. There was a good case for them in the
early days, but the scale is now high and operating costs have been driven down, while the churn of new game releases
is so fast that the brief marketing or UA value the storefront provides is far disproportionate to the fee.
>If you subtract out the top 25 games on Steam, I bet Valve made more profit from most of the next 1000 than the
developer themselves made. These guys are our engine customers and we talk to them all the time. Valve takes 30%
for distribution; they have to spend 30% on Facebook/Google/Twitter UA or traditional marketing, 10% on server, 5% on
engine. So, the system takes 75% and that leaves 25% for actually creating the game, worse than the retail distribution
economics of the 1990's.
>We know the economics of running this kind of service because we're doing it now with Fortnite and Paragon. The fully
loaded cost of distributing a >$25 game in North America and Western Europe is under 7% of gross.
I just don't get how what Steam does is parasitic or bad in any way. They are expensive, but they don't engage in the predatory practices of most of their competitors. They just kinda sell games.
If we accept this argument, let’s not forget that Apple contributes the entire iOS API, which is much much wider in scope than what Steam offers.
Someone will argue that until now the rest of OSes gave us the entire API for free, but I don’t see why charging for the OS API is an invalid way to make money.
There is literally no reason why you could not just publish your game anywhere else than Steam. Or publish on Steam as well as other platforms. Unlike Epic Game Store, Sony, or Microsoft, Steam doesn't engage in third party exclusive agreements.
Your competitors giving away their product means your product is not worth anything? That seems like nonsense to me. Maybe your competitors are unable to compete on the worthiness of their product which is why they are forced to give it away.
Bingo. I doubt the Open Handset Alliance would've gotten off the ground had they charged the kind of licensing fees common at the time by Symbian and Windows Mobile. What would convince manufacturers to pay into an (at the time) remarkably immature platform and gamble their devices' success on it?
But make it free… and now you've suddenly got their attention.
Yeah, it's actually kind of low. Kindle Direct Publishing takes 30% of digital book sales and those are like a couple megabytes. Steam is distributing 100GB+ titles on top of adding Steamworks SDK and a ton of other features.
30% was a great deal when KDP launched..several decades ago..Prior to KDP, self-published authors would have costs of about 90% to print and distribute their own books. Traditional publishers generally take 85% but in exchange handle the editing, marketing, and physical logistics of book printing and distribution.
Similarly, when Steam launched, its biggest competitor was retail. Studios got paid a % of the wholesale price (after the publisher recovered its costs), which worked out to an average of approximately 10-15% of the retail price for successful games and 0% for unsuccessful games. (Note: this does not include the milestone payments to the studio during the development of the game.)
But markets have changed. 30% may or may not be a great deal anymore. (For KDP, many authors say that the 30% is worth it because the volume of their Amazon sales dwarfs all other-channel sales combined. Some relatively famous sci-fi authors have said that about 90% of the sales of their self-published works were through Amazon.)
If I were looking for alternatives to Steam it would probably be Good Old Games, Humble, or self publishing. Epic Game Store is just kind of trashy. They keep engaging in anti-consumer practices.
Devil's advocate: what is the typical markup at retail stores?
I am inclined to agree with you, it feels like rent seeking at some level (middlemen profiting from the work of the creator), but at the same time, there are many moving parts to get product into the hands of customers so I'm not sure what's fair / standard.
(This is separate from the topic of the article, in which Apple prohibits others from looking elsewhere for these services, which sure seems like textbook anticompetitive behavior)
Devil's advocate: what is the typical markup at retail stores?
Who cares? We're not selling boxed software. Let me give you a better question: how much would it cost to host a web site and give a payment processor their cut? I can answer that, because I've done it for Pocket PC/WinMobile apps: 7% to FastSpring, or whoever, for payment processing and then web site hosting for, what, a few hundred a year?
30% is friggin' ridiculous. Discovery is non-existent on Apple's App Store, so we are paying for...what? Overpriced payment processing, and some minimal online storage? I don't give a shit that Apple provided a "platform", as Microsoft isn't charging for me to have the privilege of dropping a binary on a Windows box. And for Apple to then turn around and demand a cut every time money changes hands, whether Apple had anything to do with it or not, is just icing on that anti-competitive cake.
The point is it's a frame of reference. The claim is that 30% is ridiculous. Why? Based on other comments in the discussion, it sounds in the same ballpark to other online stores, ones without Apple's anticompetitive pressure.
If that's the case, it sounds like a very lucrative market, so competition should bring that number down if it's so profitable.
Again, this is a separate question from Apple's anticompetitive behavior, it's solely about whether a 30% cut is itself reasonable or outrageous.
I thought of a frame of reference: ebay. All told, it looks like I pay 15% to ebay when selling something. So Apple charges 2x as much (I would say the value provided is comparable)
Apples and oranges. Boxed retail have to pay for buildings, shipping, stock management, etc which just do not exist in the same quantities for digital downloads.
Why is a brick and mortar retail store a useful frame of reference? You may as well compare it with the margin taken by my plumber or the loss factor in electricity supply lines. It's utterly irrelevant as a frame of reference. You really can't see that?
Why be so snarky and dismissive? Plumbers or electrical lines aren't middlemen between producers and consumers. Retail stores and app stores both deal with:
- taking a large number of small payments from geographically distributed customers (with different tax situations), taking a cut, and producing a simpler bulk income stream to the producer
- having some filter on quality of the products that are offered to the consumer, and providing a low-friction way for customers to exchange money for them
- dealing with refunds, differing methods of payments, discounts, etc. (handling some of the customer nonsense that comes from dealing with the public, in short)
Are there things that physical stores do that an app store doesn't? Of course. But if retail takes a 50% cut and the app store takes 30%, well, that's instructive, isn't it? That sounds reasonable given that they play similar roles but with less "physical stuff" to do. But if retail takes 10% and here we have the app store taking 30%, that's even more instructive and that would support the claim that the app store is "ludicrous". I'm not looking to compare 29% and 30%, I'm evaluating the claim that 30% is an outrageous sum. Outrageous compared to what?
--
For the record, it annoys the ever-living hell out of me that ebay keeps taking more and more, but from what I've seen, its competitors are in the same ballpark. Is Apple worth twice that for the app store, probably not. But now we have a frame of reference: it's about 2x ebay, not, say, 10x
You cannot charge less on other stores than what the game costs on Steam or Steam will kick the game out. So consumers lose out.
> The second class action accuses Valve, Inc. of using MFN clauses in its contracts with game developers—both big (Ubisoft) and small (Rust)—to maintain its monopoly in personal computer video game sales through its online marketplace Steam as well as stifle competition more generally. The complaint alleges that the MFN clauses cause game prices across online marketplaces to be the same even though stores like the Epic Games Store take a smaller commission than Valve. Rather than pass those savings on to the consumer, the developers must maintain higher prices to remain profitable on Steam.
This is not well known because Valve is somehow untouchable and worshipped so much in the online community like on Reddit and HN that any criticism invites personal attacks, downvotes and flags etc. and is buried, even if valid.
Imagine the uproar if another company that was a monopoly did this. Look at all the comments on here right now and none of those mention it.
Valve only requires that when you are selling Steam Keys outside of Steam. If you are selling the game as a standalone separately there is no MFN clause.
To expand on that, what's happening is that Valve allows developers to give a Steam copy of the game to anyone who bought the game on a different marketplace. Neither the user nor the developer pay Valve anything for that copy of the game.
Valve will only provide that free Steam copy if the price the user paid is equal to or greater than the price on Steam. This ensures that you can't effectively just sell Steam copies of the game at a lower price than on Steam itself.
That seems more than fair to me. Valve is providing a free promotional item and it has a straightforward limitation designed to prevent abuse.
If this is true, how is there an entire marketplace of Steam keys for sale elsewhere, like Humble Bundle and Green Man Gaming and Fanatical and all of isthereanydeal.com? They've existed for years and sell many many Steam keys for many games at a discount.
You just don’t understand the Steam business model of “do nothing while your competition keeps shooting themselves in the feet”.
Every major publisher has tried launching their own competitor platform to Steam, some going as far as pulling their games or making them exclusive. Despite Steam simply doing nothing in response, they all essentially gave up and came back except Epic because of the Fortnite playerbase.
I don’t think comparing Apple to Steam, is an apples to apples comparison. AFAIK Steam doesn’t ask for exclusivity if you publish on its platform. So it is up to the customer to choose how it publishes its products.
It's not clear what you mean here; Apple doesn't ask for exclusivity either. You can publish on Apple and on Steam and Android and they won't complain.
Unlike Apple or Google app stores, where you basically HAVE to be on there to access the user base, a PC game can be downloaded and played without needing steam.
That's going a little far. Apple and Valve do have costs to operating the storefronts. It's just that 30% is an overly big cut for what services they provide.
Between Steam and Apple I think the case against Apple is generally stronger. Steam has competition on PC, but Apple is an effective monopoly on iPhone software. That said, Apple does more work on each release with quality control and software reviews. Valve is much more hands off on each release, but does secondary work like maintaining Proton.
This just brings up the discussion of what the cut should be. 20%? 10%? 5%? Or maybe the full 30% is necessary? In a healthy market a business like this that has relatively low barrier to entry should be ripe for disruption, but even companies like GOG take a 30% cut. Why has nobody started a competing business that only does a 20% cut? I get that there is customer inertia with Steam, but it seems like nobody is really trying very hard to win customers.
> All thanks to Epic for spearheading this effort. We do not want 30% cut takers in the age of digital distribution.
I can see why Epic would not want to pay a 30% platform fee to Apple's game store, much like the 30% which they pay to Google Play, Nintendo eShop, Microsoft Store for Xbox, Sony PSN Store, etc.
I’m a dev who pays the same 30% cut for all the platforms, and I still think that’s a bit of an over optimistic view. Anything is a transaction and someone has to benefit from that transaction or there’s no money to be made and it won’t be worth doing, same reason we as devs charge for software.
Apple/google/valve/etc are providing you a service and acting as a publisher, dealing with a bunch of legal and tax crap you probably don’t want to, and providing testing/rollout/apis/libraries and a lot of other features for you to use.
You can debate all day long if the cost for their service is fair, but you certainly aren’t getting nothing.
In addition Apple obviously has a walled garden, but android has had side loading and alternative app stores since its inception and it’s still not popular, every user wants to just use a centralized place, so every dev releases on the centralized market. Forcing Apple to change their rules may be warm and fuzzy morally, it won’t change the status quo in the slightest.
As many users have also pointed out valve and steam is the last of the publisher storefronts you likely want complain about as they do a ton for the gaming community.
The big difference between Steam and Apple App Store, is that developers can choose to deploy on Steam, and users actually want to use Steam, while Apple has locked down their stuff and forces you to use it.
iPhone was announced in January 2007 and shipped in June 2007.
Windows Mobile literally had a version called "Smartphone 2002" which you should be able to guess when that came out. You could buy a variety of devices in a vertical mostly-screen format running Windows Mobile for years before iPhone was even getting hinted at.
The main thing the original iPhone did for the smartphone market is popularizing capacitive multitouch screens that work well without a stylus.
> and app stores
The iPhone not only launched without an app store, Apple (and Jobs in particular) was famously hostile to the idea of even supporting third party native apps at all, insisting that web apps would be all that the platform needed. They didn't change their tune until October 2007 when they announced an upcoming SDK, it was made available to developers in March 2008, and it wasn't actually released to users until July 2008.
One could make an argument for Linux package managers being an "app store" in the mid-90s, though if you insist on it needing to sell commercial software then the various carrier-specific software platforms for J2ME feature phones starting in the '99-00 timeframe would be it. Carrier-agnostic third-party stores started to pop up a few years later, and the first official one from a phone vendor seems to have been Nokia Catalogs for Symbian S60 in 2006.
Android also had an app store from the beginning, but the launch of the whole platform was delayed long enough that Apple managed to get iOS 2.0 out with its app store before the first Android devices actually shipped.
A one year posture shift pdoes not constitute famous hostility. He dismissed app stores because the iphone didn’t have that feature yet. apple was the king of digital storefronts with the itunes store.
Yes, though fwiw steam provides (in my opinion) more benefits to gamers and games than the apple appstore does to generic apps trying to do all manner of things.
And additionally steam isn’t a walled garden, there is actual choice, and steam goes out of its way to be usable on multiple platforms. Very different situation to the locked down apple ios ecosystem.
With their market share they are by definition of monopoly. Monopoly doesn't mean "only store front", it just means majourity market share to the point they control the market.
People forget there's nothing inherently wrong with monopolies. It's only when they abuse their monopoly position that there's issues.
Steam's customers aren't really the end users, though
Steam's customers are game publishers. Steam provides a service to connect publishers to their audience. Their business model is not "takes money from customers in exchange for goods". It is "takes a cut of each sale that a publisher makes on their platform"
Given that there is no real friction for end users to install Epic Launcher or GoG launcher, is Steam really a monopoly to their customers, the publishers?
If Steam tries to muscle a publisher, they can refuse to publish on Steam and still have options. When popular games aren't on Steam, it does seem like people have absolutely no problem installing another launcher/storefront to access it
Look at the massive success of Fortnite, which is only on the Epic Launcher
I’m worried that this outcome will be applied too broadly and affect Steam. Sure Steam is not perfect, but its dominance is in large part to them offering a superior product. Admittedly I’m not a game developer so the 30% cut doesn’t affect me directly, but I think it’s fair to say that Valve’s success has been a net positive to PC game devs.
Valve remains as one of the rare early tech company successes that has not suffered from enshitification the way so many others have. A key to that is that they have found a way to make a ton of money, and their leadership is happy to be very rich without continuing to expand and grow at all costs. If that business model is threatened, I’m not convinced that gamers and game devs would necessarily be better off.
"Mr. Roman did not stop there, however. He also testified that up until January 16, 2024, Apple had no idea what fee it would impose on linked-out purchases […] Another lie under oath: contemporaneous business documents reveal that on the contrary, the main components of Apple’s plan, including the 27% commission, were determined in July 2023."
Basically, the current civil court model is 1) go to court with a case 2) demand to read internal memos of the defendants, 3) put people on the stand and walk through everything in these memos.
It is coercion. They want you to settle, or all your personal info goes online.
The demands for internal memos aren't arbitrary, they follow due process of law. Plaintiff serves a subpoena. Defendant can contest the subpoena by filing a motion to quash with the judge, who either approves or denies the motion. But in a case like this where the defendant is a large corporation (or representative thereof) and the subpoenaed information is relevant to the facts of the case, the judge is likely to honor the subpoena.
Apple's 30% app cut is why we don't have the ability to make websites and web apps appear and operate like an app. Pinning a website onto your home screen to make it seem like an app is a cumbersome process which can't be automated into some "install" button. This is probably intentional to force people to make wrapper apps and thus subject something to the Apple platform fee.
They're also worrying about declining revenues in hardware so they are aggressively shifting to subscription and service fees, to the point of destroying the user experience of the Apple ecosystem. I am almost forced to use iCloud backups because of decades of neglect with offline syncing. Why must I pay monthly for gigabytes of storage to backup my iphone when a single $30 hard drive could do it?
I understand and see the value apple provides in a walled garden. It's not totally useless. It's one of the reasons apps tend to be higher quality in the App Store and the platform is basically free of viruses unlike an "open" platform like Windows. But I also welcome the changes that might make it easier for web based technologies to run freely on iOS.
I logged into my wife’s iPad and somehow all of our photos got merged. I have no idea how it happened or how to undo it, but now we both have to upgrade our iCloud tier to cover the extra storage. We will both be stuck on tat plan in perpetuity because it is such a mess trying to separate out the photos.
It’s 3 taps that require specific instructions that no one knows how to do. An app store may require taps but you can link to a page that has an Install button.
These small ux decisions make of break a feature or pattern. For example we had QR code readers but it didn’t become a thing to have QR codes until Apple baked it into the photos app. Meanwhile QR codes in China proliferated almost a decade earlier because it was baked into the defacto standard do-everything app WeChat.
> Why must I pay monthly for gigabytes of storage to backup my iphone when a single $30 hard drive could do it?
This is “I could build that in a weekend” mentality. Your data on iCloud is replicated, available via the internet, available 99.99% of the time, etc. If your $30 hard drive fails you lose everything.
The price and being able to use other services is worth debating, but comparing it to “a single $30 hard drive” is disingenuous.
My backup is also replicated. Once on my hard drive and once on my phone. Secondly, it’s apple’s job to build this feature. I’m not talking about why I do or do not do it myself. I’m talking about why apple doesn’t make it, which is because they want me to pay monthly to hold data that I may never actually access.
Third, apple did build this feature, but it has become a neglected second class citizen. You can do backups to a mac, but the experience is clearly neglected.
"The judge declared that Apple’s VP of Finance Alex Roman lied under oath in a court of law. Apple knew this and did not comply with its legal obligation to correct the record.…
…Roman could literally be sent to jail for this, with Apple also subject to criminal sanctions."
Unfortunately, that's hardly likely, nowadays the US justice system hasn't the balls to go that far. Everyone knows Apple is too big and powerful to touch other than to wave a feather at it.
These days governance and democracy first and foremost serve the rich and powerful.
In the age of floppy disk and CD distribution of software, what was a retailers markup/cut? I imagine, Staples, Best Buy, CompUSA, Office Depot, etc were taking 30%+.
Shelf space, physical distribution, and store operations, etc costs money -- but so does bandwidth, security, tech ops, etc of all of these platforms.
Why isn't it ok for a digital store to require a markup to sell?
Staples, Best Buy, CompUSA, Office Depot are not a monopoly, if you do not like one as a distributor, you can go sell at another, or you can very well sell at your own mini shop, as any commerce should be.
Best Buy/CompUSA/Office Depot employees do not scare the customers and block the customers coming to you directly.
These are the few problems of monopoly that Apple so conveniently takes advantage of.
The scare part refers to warning dialogs that iOS would pop up if you used a link to an external web browser to collect payments. It would warn you that Apple wasn't running the payments and use scary language warning you about potential fraud, etc. to try to scare people away. They would also demand a 27% fee from developers for collecting money on the web outside apps if users were paying from following that link.
As a developer, you are allowed to put only one 'link' (not a more user friendly button/supporting text) to your own website for any purchase, it has to be a small font, and not in the checkout flow that takes to Apple pay. Which in itself is very scummy to begin with.
To top it, when the user actually sees that hidden 'link' and clicks on that, the user is put up with a big screen of message that the external website doesn't have security, privacy etc.
You listed around 4 competing stores in your example, but Apple explicitly does not allow anyone to compete with their own store (except for in the EU, thanks to the DMA, and even then they take their cut, see below).
Another issue with the analogy is that when you buy a PC in a physical store, that store does not continue taking a cut of all software bought on that PC using i.e. unrelated digital stores (but that's precisely what Apple is asking from competing stores in the EU).
> Shelf space, physical distribution, and store operations, etc costs money -- but so does bandwidth, security, tech ops, etc of all of these platforms.
But do they cost the same per unit sold?
> Why isn't it ok for a digital store to require a markup to sell?
Because there is only one store. Two if you count the Play store, but you're not required to be in that store. And when you become big enough, suddenly you're playing by different rules, rules where monopoly laws come into play.
I think if you're ok with some markup you should be fine with any. At some point, it becomes so large users will leave the platform. Finding the right balance is not a guarantee
This is an awful set of arguments, even suggesting at one point that most developers would be happy letting Apple garnish their in-app purchases for 30%. Handling your own payments is so simple cheap these days. These models need to die.
And no it's not unbelievable, incredible or any other bombastic phrase to mean the same that lying to a court gets you in serious trouble.
More discussion: https://news.ycombinator.com/item?id=43856795
https://news.ycombinator.com/item?id=43852145