Skip to main content

Lawsuit alleges Valve are abusing power to keep game prices high

CD Projekt and Devolver Digital also named as defendants

A class action lawsuit has been filed in Calfornia federal court this past week against Valve and several game developers, alleging that Valve "abuses the Steam platform's market power" to prevent other game distribution platforms, such as the Epic Games Store and Microsoft store, from competing on price.

As reported by The Hollywood Reporter, the suit specifically relates to a 'Most Favoured Nations' provision that Valve makes developers agree to in the Steam Distribution Agreement. Basically, developers releasing their game agree that their Steam release will be set at the same price as the game is offered for on other platforms.

Watch on YouTube

The suit states that, "The ability to provide PC games to consumers at lower prices is one way a firm or new entrant could gain market share. If this market functioned properly—that is, if the Steam MFN did not exist and platforms were able to compete on price—platforms competing with Steam would be able to provide the same (or higher) margins to game developers while simultaneously providing lower prices to consumers."

Their five plaintiffs bringing the suit allege that they have been "forced to pay supracompetitive prices" due to the Most Favoured Natioons provision.

Alongside Valve, the suit names several game developers who have signed the Steam Distribution Agreement as defendants, including CD Projekt, Ubisoft, kChamp Games, Rust LLC, and Devolver Digital. I've asked for comment from Valve and will update this post should they reply.

The price of games is not wholly dictated by the operator of each platform, but set by game developers and publishers themselves - albeit in partnership with the platform operator. Removing the 'Most Favoured Nations' clause from Valve's agreements with developers would therefore not automatically mean cheaper prices on other stores. Even with Epic taking a lower cut of sales, developers might simply decide to keep the profit rather than passing savings on to the consumer.

That said, it would put the choice in developers' hands rather than Valve, and it would allow Epic and other platform operators to offer incentives to lower prices to developers. It's not hard to picture Epic paying developers to incentivise them to sell their games cheaper on the Epic Games Store, much as they currently pay to offer free and exclusive games.

You can read the full complaint over on The Hollywood Reporter.

Read this next