The antitrust lawsuit between Valve and Wolfire Games is back on track. the suit was fired in November 2021 for not meeting the required standards, but without prejudice, meaning Wolfire had 30 days to amend the claim and re-file it. Somewhat unexpectedly, that’s what happened, and a judge has now ruled that the case can go ahead.
The original lawsuit stated that Valve uses its dominance of the PC gaming market through Steam to suppress competition, while extracting “an unusually high cut of nearly all sales that pass through its store”. That keeps game prices artificially high, according to Wolfire, an independent developer of games like Lugaru and excessive growth and creator of the Humble Bundle.
“To pay Valve’s 30% commission, game publishers must raise their prices to consumers and can invest less resources in innovation and creation,” the lawsuit stated. “Players suffer from paying higher retail prices caused by Valve’s high commissions.”
And while the Epic Games Store has made unprecedented inroads into the digital PC market, it’s actually been cited as a failure in the process because Epic was only able to do so by shelling out big bucks on exclusive offers and giveaways.
Valve, of course, defended their practices, saying its 30% cut “has become the ‘industry standard'” and that it actually faces competition from some of the biggest companies in the industry, including Microsoft, Epic and Amazon. It also criticized Wolfire’s lawsuit for lack of specific claims: the allegation that Valve prohibits developers from selling discounted Steam keys through other distributors, for example, arose from “a single anecdote” involving an unnamed developer, the company said. Valve. The judge in the case apparently agreed with that assessment, saying in the dismissal that the lawsuit “does not articulate sufficient facts to plausibly allege an antitrust injury.”
The updated costume was enough to at least partially fill in these blanks. A decision filed on May 9 and available via GameDiscoverCo noted that the amended filing does not make new claims but “provides additional context” to the original claims. An example is a note about Valve’s acquisition of World Opponent Network [WON] in 2001, which closed down a few years later, “forcing gamers onto the Steam platform”.
“This denotes market power before that described in the CAC [class action complaint]”, the decision states. “And while both complaints indicate that, in those early days, Defendant was competing with physical game distributors, SAC [second amended class action complaint] makes clear that Defendant did not need market power to charge a fee well above its cost structure because these physical competitors had a much higher cost structure.”
It’s not a clear win for Wolfire. Four causes of action in the lawsuit, based on the allegation that the Steam platform and the Steam store operate in separate markets, were dismissed, as was part of the seventh cause of action – and at a loss this time, meaning the actions cannot be displayed again. The remaining allegations, however, that “are based on the theory that Defendant [Valve] competes on a single integrated gaming platform and transactional marketplace,” it could go on.
As GameDiscoverCo points out, the decision is not a judgment on any of the claims in the lawsuit, it simply grants Wolfire an opportunity to plead his case, which is where things get very complex and very expensive. A recent decision in Epic v. Apple stating that Apple is “is not monopolist” (and this allows Apple to continue charging 30% fees on the App Store) might indicate that Wolfire has a rough road ahead, but at least now he has a chance.
I’ve reached out to Wolfire and Valve to comment on the decision and will update if I get a response.