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Valve runs its massive PC gaming ecosystem with only about 350 employees
(arstechnica.com)
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this post was submitted on 17 Jul 2024
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I think people often hate steam for their success, but fail to see it's the result of customers'choice in a free market. (I see it enough I'm not sure if people get paid to hate on them... To ruin the thing they have most of customer respect)
Steam is not publicly traded and does not act like every other publicly traded company. It invests in its customers experience and custtomer come back for that. It does not nickel in dime or use its position to hold its customer captive and enshitfify its product. It's not an ISP...
It invests in hardware and software development it believes the industry needs not to make a massive profit but to be a champion of what gaming should be (Linux, steam link, index, bug picture, steam controller, steam deck) These products are experimental and usually sold at or near cost not to make money but to prove to the market there is a need and a demand.
They are often a champion and voice of the gamer.
They could have tried to be like Bethesda and tried to monetize their workshop but they didn't.
Sometimes they're quiet and we don't hear anything about what they're working on, but that doesn't mean they aren't working on things.
I can't imagine pc gaming would have survived and resurged without steam. And I hate to think what it would be like if there were just 5 epics, origin, Uplay, whatever other launcher. I think gaming would look like mobile games..,.. which takes a 30% cut too and can only sell in apple or android markets.... No one bitches there and they offer no services.
I agree with you, but justifying anything by saying they're successful in a free market is really iffy. There are plenty of large evil companies that are incredibly successful. That said I agree with everything else you've said.
I personally think 30% cut is too much for any app/software store. But if anyone deserves it Steam does
My reference to free market is only a means of saying customers choose steam because of its offerings not that they have too.
I agree it would be nice if they charged less. However do we know their full PNL/balance sheet? People just keep taking revenue/employees as if employees are the only overhead.
They provide the servers, and do have an rde cost for development for services we discussed like cloud saves, control support etc. if people have this much energy over it attack pharmaceutical for there insane mark ups that would drive way more positive social change. But the people driving are mostly trying to make more money by cutting there publishing expenses through steam. I'm sure psn and Xbox also take 25 to 30percent cuts.
They also championed low publishing costs of only 100 dollars to list a game. I don't know enough to speak to their update charges though. Hell psn been known to charge 25k for visibility in top of their 30% cut and there are no other market options Reference
Everyone focuses here cause developers and publishers want more of this cut and to me seem to try to push steam into regulator cross hairs as a way to force the changes they have failed to negotiate.
I would also point out brick and mortar sellers also take 15 to 20% cut and then also charge for storage, disposal, fulfillment, return on and on. Amazon does the same. It's the nature of a market place. Reference
Overall it doesn't make sense to me as a community that we attack our best example of what a game market place should be.
No harm meant. I do think Steam is the golden example of a big business done right. All I'm saying is that there's room for improvement.
We can make an educated guess. Amazon's S3 charges roughly $0.025 per GB, so an 100GB game would cost $2.50 for Steam to upload to a user. For a $30 game, that's around ~8.5% or just over 3 downloads before it's unprofitable.
Obviously Valve isn't paying consumer level S3 prices, and obviously users can download multiple times. But I would be extremely surprised if they didn't make a rather large margin on each sale
Total fair always room for improvement, no ones perfect.
Appreciate the good discussion!
Assuming there will never be any updates, 3 downloads is what regular gamer can do. First computer, second(friend's) computer and reinstallation on first computer.
$0.025 per GB is the most expensive option on S3 I could find rounded up. It would be absolutely insane if Steam were paying those prices when they have their own servers. I also used 100GB game size as a large number, and $30 as a small price tag (for an 100GB game).
I was trying to be charitable with the numbers and it still came out pretty positive
What is cheapest and at what speed?
I get it, but then there are all those heavy f2p games like War Thunder, from which Steam doesn't get anything.
You can look it up yourself, I was just giving a worst case scenario
aws.amazon.com doesn't seen to work in Russia
For storage or for download?
Download. It's also rounded up. Storage is negligible compared to bandwidth, especially considering Steam's business model
And their cost is going down over time while their revenues are increasing since they take a % off every sales and sales are increasing and so is the average price of games.
They make enough profit for the boss to be a billionaire, enough said.
The important part is why they're successful; unlike many companies which try to lock customers in and take advantage of them as much as possible, Steam/Valve try to build a good product at a reasonable price, and trust that it'll bring them customers.
And look at that, it does.
In human societies culture matters. People who become managers often have intrigue and taking advantage of people as their main useful skills. So they just go on doing what they know. No reason to scold them even, this is life. After all, something should serve as the backdrop for companies doing it right.
Valve started differently.
But you surely already know all that, Revan. How's Bastila doin?
Well, no... I think it's more akin to the concept of "loss-leaders". Get people in the door and while they're there, they'll buy a game or two. Which is where their real profits come from.
In the end, it's still just a business strategy intended to result in profits for Valve.
However, that being said, the fact that they don't have a fiduciary responsibility to shareholders to maximize profits and keep that stock price up at (literally) all costs, allows them to operate the way they do.
But don't get it twisted, they are a for-profit corporation, and their ultimate goal is making money. They're just not as shitty about it.
The bar is REALLY fucking low these days.
Oh for sure they are there for a profit. But as the best example in the industry let's not unnecessarily attack them. Imagine how much more money they make if they did go public and how awful it would be for all of us.
Totally. I wasn't trying to rag on Valve... More just a comment about capitalism in general and how shitty it is.
They kind of have to be about making money. No company survives by putting the needs of the customer above all else, unfortunately.
I hate them for forcing me to use a kind of DRM which will stop working once their servers stop.
Halflife was just fine without steam. Adding steam seemed to be a way to stop players from sharing CD keys.
Luckily steamless is piss easy to use because Steams "DRM" is only meant to be preventative. As in, you're playing it on steam for the community, workshop, cloud saves, per game notes, control scheme setups, etc etc.
That's kind of why they are successful though, right? They were the ones that figured out how to supply games digitally for a profit, which required a way to prevent people from sharing the product for free. This was previously done with CD keys, but the advent of the internet rendered that mostly ineffective.
I think publishers value the fact that steam is essentially a form of DRM, so we got fairly lucky all things considered. Imagine if steam didn't exist and we had to deal with software like Uplay and Origin.
Imagine if securom was everywhere again.
The way I see it, Steam having DRM is Valve's way of giving publishers and devs that choice, and said choice just makes Steam more likely to stick around for the future, which makes the biggest drawback of DRM (losing all your games) less likely.
You can play: Half-Life 1: Source Half-Life 2 Half-Life 2: Episode One Half-Life 2: Episode Two All with steam closed. Original half life expansions aside, your take is senile. I suppose alyx could've done without it.
Okay, but what about all the games that have come out since steam has launched and ONLY have online-only drm options?
Not talking about MMOs because those are their own beast. I'm talking about a huge amount of games though excluding mmos.
I don't mind ~~digital distribution~~ DRM platforms, I just want a choice. I want licenses to be portable and I want to be able to re-sell licenses for games I do not wish to own any longer. I don't want to be bound to just console games either.
I don't think resellable licenses are a great idea. It works with physical media because it will have flaws that affect quality and price, but I don't see how that would work for digital without screwing over devs. I can completely get behind transfers or trades with friends or between platforms, but not really for resale.
I can get the transfers between friends part, but why between platforms? That makes zero sense from a business standpoint.
The only way that would work is to have game companies manufacture and distribute an external storage medium themselves, because platforms sure as hell won't say "Oh you bought a license on another store? Sure, you can use our CDN for free!". And now we've almost reinvented game CDs.
I would gladly pay a couple bucks a month to use a digital distribution platform of my choice.
I agree in that it'll be hard to transfer between platforms, but doubt it's impossible. The idea is that you don't want Valve to nuke your licenses in one go, but Valve also doesn't want you on their platform.
Okay, but what about pre-steam DRM? But what about services that have existed for less time and actually done the slippery slope shit you're cowering in your boots about (Uplay)? You're so busy listing possible problems and making problems up that you are not comparing and contrasting your available options. It strikes me that you are complaining to complain and don't have realistic solutions in mind, you're asking for either a rental system where you put up collateral to play a game or you're suggesting that the developer only be able to sell a game once. Are you one of those crazy "first sale doctrine" sovcit types?
And the fact that they can just decide to take your games away from you by deleting your account?
Steam was apparently already cool when I was a kid. Though the reason I knew about it was that I had 2 games with Steam support bought in stores (one of them I gifted without installing\registering, another one I installed without registering).
Others are still at that point - you buy a game and you get something like GameSpy and such as an optional thing nobody thinks about. They are trying to make those services the entry point, and I guess for AAA players they have already succeeded.
Valve has AS number, so it is an ISP
Having an AS does not make you an ISP. It just means you have a public AS, which you can use to peer with providers on the Internet, if you have an agreement to peer.
Correct. In fact many, many companies have ASNs. Little companies all the way up to large ones. The key difference for an ISP is they allow you to route traffic through them. Almost every company that has an ASN blocks traffic from being routed through them, assuming they know how to configure that and that they have different peering points. Valve most certainly does not allow you to route through their network, they already have enough traffic just doing their own CDN stuff.