Last month, Wolfire Games – developers of bunny kung-fu game Overgrowth – filed an antitrust suit against Valve. In the suit, Wolfire Games and two other plaintiffs allege that Valve have employed “anti-competitive practices” to “protect its market dominance.”
In a new blog post published May 6th, Wolfire Games co-founder David Rosen writes that he felt he had “no choice” in bringing the suit, after Valve told him “that they would remove Overgrowth from Steam if I allowed it to be sold at a lower price anywhere.”
“Valve abuses its market power to ensure game publishers have no choice but to sell most of their games through the Steam Store, where they are subject to Valve’s 30 percent toll,” alleges the suit against Valve.
It alleges that part of this abuse is the use of “Steam Key price parity provision.” This is part of the agreement developers sign with Steam that says they will not offer Steam keys for sale on a competing service for less than they are sold for on Steam. A similar set of rules around Steam keys is available in public documentation.
That seems fair, given that the keys grant access to a game on Steam that would be downloaded using Steam’s servers. In his blog post however, Rosen alleges that Steam use their power even when Steam keys aren’t involved.
“When new video game stores were opening that charged much lower commissions than Valve, I decided that I would provide my game “Overgrowth” at a lower price to take advantage of the lower commission rates. I intended to write a blog post about the results,” he writes.
“But when I asked Valve about this plan, they replied that they would remove Overgrowth from Steam if I allowed it to be sold at a lower price anywhere, even from my own website without Steam keys and without Steam’s DRM. This would make it impossible for me, or any game developer, to determine whether or not Steam is earning their commission.”
Rosen says he believes, after consulting with lawyers, that Valve are in breach of antitrust laws by “distorting competition” and making it prohibitively difficult for rival stores to offer games for less and thus compete with Steam.
Back in 2019, Epic Games CEO Tim Sweeney alleged something similar in a tweet, suggesting that “Steam has veto power over prices”. The Epic Games Store takes a 12% cut of the games they sell, but games typically cost the same when available on both EGS and Steam.
Aside from producing Overgrowth and Receiver, Wolfire Games also arranged the first ever Humble Bundle. Wolfire Games’ Jeffrey Rosen then left Wolfire to co-found Humble Bundle as a separate company and grow it into a store that still mostly acts as a Steam key reseller today.
The result of this lawsuit could have far reaching consequences for game developers on PC, perhaps even more so than Epic’s ongoing legal battle with Apple. Wolfire are seeking damages and attorney’s fees in the suit, but also injunective relief that would stop Valve’s alleged influence over game prices on other stores.