this post was submitted on 05 Nov 2025
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A Boring Dystopia
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I think you are forgetting the other reason Valve cornered the market;
“One thing that we have learned is that piracy is not a pricing issue. It’s a service issue… The easiest way to stop piracy is not by putting antipiracy technology to work. It’s by giving those people a service that’s better than what they’re receiving from the pirates.”
Gabe Newell, CEO Valve - Speaking at the Washington Technology Industry Association's (WTIA) Tech NW Conference.
Yeah, no I definitely agree they're good to gamers. I also love how they have a flat structure, and I think Gabe seems like a smart guy. He's given some interesting talks about economics. They've made a great platform for gamers, but it doesn't quite change that their business model is based on taking a cut of the profit of work done by others. In most other scenarios, it's easy for us to recognize when companies do this -- amazon, Walmart, etc, but in Valves case they have such a great reputation among gamers and a fanbase of their own, I think the escape a good amount of warranted scrutiny (game dev side, not gamer side)
"Is based on taking a cut of the product of work done by others."
That seems like a fair trade off for game developers in turn getting to use the platform who's work was done by.... Valve.
I understand why people make this argument but it's really undercutting the value that Valve provides developers who utilize steam for distribution.
I think I'd actually disagree here. In a classical sense Valve offers no value to the product (game). They just own the digital marketplace. It's like saying, "well, the Lord does maintain the roads and walls and the square, and he does a good job. He adds a lot of value for the craftsmen and peasants who use the roads and are protected by the walls." But in the end, the Lord is still extracting a rent from the workers actually producing the goods.
Okay.
So, host a game on your own website, with its own patching process, payment systems, and forum. See how long it takes you, and how many sales you get out of it.
Once you do that, you may start to realize where that 30% is going. Sure, once you have the game and are playing it, you can say, "gee, it's weird that Valve took a 30% cut of this work". But it's like seeing a long list of credits at the end of a movie when you were only aware of the signature voice of the lead actor.
It's not like this, because most (not all) of those credits actually worked on the movie, itself. Their labor went into the thing that was produced in the end. I'm not arguing there's no cost to distribution. It's just not value-adding and so it ends up being extractive imo.
I'm also not trying to claim there's no productive work involved with maintaining a distribution platform, or that they aren't necessary. That's one of the issues, they are necessary, and there is one big player, and anyone who wants to sell their good is beholden to them. Valve still has a feudal-lord-like position in relation to the people who actually make the games, themselves.
Edit: also, im sensing some indignation. hope i didn't push your buttons or anything, just saying things as i see them and if you don't see it that way, that's fine.
If you've ever watched those credits, you'd know that's not true. Credits don't just go to people who assembled lighting rigs or held the boom mic - they also go to the offices that negotiated with local governments to arrange on-sight shooting, or production studios that fronted funding, or people who provided QA and support for the animation software the CGI studio is using. Much of it becomes distantly disconnected, and that's exactly what the relation to Steam becomes.
You're also perhaps being disingenuous about the "one big player" thing. It is possible, and achievable for individuals to write their own launcher. I teased it as being more work than an indie dev often wants, but it's still doable. Factorio and Minecraft famously did this a long time ago AND got initially popular as a result. Many Asian games run their own Windows launcher. As a result, they collect 100% of revenue, but forfeit some Steam exposure. Notably, some large publishers can cut better deals with Steam based on that popularity; "We don't need you, but we both gain a bit more from working together".
Some indies have even learned about this the reverse way, in seeing that merely because Steam is popular, publishing there doesn't necessarily cover advertising for them; and even a good game can fade into obscurity. There's some pretty heavy misconceptions relating Steam alone to a game's level of success.
On the other hand, people have tried to argue Epic, Origin, and others failed because they "weren't as popular as Steam", but they're also generally not as good a product as Steam - not just due to poorer programming, but choosing to not even offer certain core features like reviews.
But these are value-adding things too, wouldn't you say? They end up being integral to the making of the thing itself. Different from distribution which is just, as I see it, granting access to a market that you control so the good can be sold.
I'm definitely not being disingenuous -- I'm not a Valve-hater out here trying to convince people they're evil. I use Steam and would rather use it than any other platform. It's simply better. But that's not really relevant to what I'm saying, besides it's implication that it makes Steam more attractive to potential buyers of games. In relation to me, these platforms aren't a product at all. They're marketplaces devs have to pay a tax to access. As you note, it's possible to bypass them -- but I'd wager that makes things much much harder for the dev. I'd guess Factorio and Minecraft are exceptions to the rule.
But yeah, you do have a point that are others out there. I'd consider them extractive, too. As I see it, theyre less so a service and moreso based on ownership and control of infrastructure that probably should be common property.
Ownership of infrastructure THEY BUILT.
Why is it fair that only the Factorio developer gets to sell Factorio? I have a copy of the game myself, and even built my own mod where the engineer says “lol” and you can go around to other engineers and say “lol” to them. It’s just that the Factorio dev has ownership and control of the base game, and restricts how people sell modded versions. It’s basically feudalism where he has complete control over Factorio versions.
Okay, that was a full paragraph of sarcasm. There ARE some industries where ownership of one thing, like a river or limited capacity for internet wiring, causes monopolistic control. But when we’re not reliant on a limited resource, except for the main one of “user attention”, you can’t justify it as “monopoly control”. It’s just “Bob makes the best pies, so everyone goes to his store instead of Alex’s.” If Alex wants the same attention, they need to build their own incredible pie recipe from scratch - they have access to the same street, the same apples, and the same flour.
I think you may be focusing a little too hard on the monopoly thing. Tbh I only said that in the initial reply to mirror the OPs comment in my response. Sorry, I shouldve been clearer in my other comment where I said they're the only big player. I'll grant you there are others in the market of distributors, and that Valve is one of the few big players, rather than the one big player. My bigger point is more that their business practice is extractive and more like feudalism than traditional capitalism.
And I hear what you're saying. I think you probably make total sense particularly in the eyes of neoclassical economics, maintaining Valve is totally justified and completely in the bounds of acceptable business practices-- particularly according to our current economic system and notions of private property. But I, personally, just don't buy them (pun, erhm, intended?)
For one thing, I think there are several good examples of infrastructure going public. And the other, larger thing, is that this passage from Pyotr Kroptokin kinda illustrates my attitudes toward private property.
That's how taxes work, yes, and I consider them valuable. There's a lot of work in actually deciding what work needs to be done, finding the people to do it, negotiating prices, things like that. So yes, I do think "the Lord" is adding a lot of value and making the whole operation possible in a way that probably wouldn't work if you had everybody just trying to agree on how to spend the money and split the costs.
I will also point out Valve provides not just the platforms, but also some libraries for game development, including a networking library with NAT punchthrough (which is why on steam you can right-click a friend and join them, even on small indie games, without the game devs hosting their own servers for that) and a library for input handling (though less mandatory, but if used it makes input remapping in steam better integrated).
Another thing to note is that the value provided can be experienced more directly - if you want to try a great website/store that, to my understanding, doesn't take any cut while providing hosting, try playing some games from itch. Depending on your gaming habits you might not notice much of a difference, and more of your money would go to the devs, but you might sorely miss some features like cloud saves, steam networking, steam input, proton, automatic delta/incremental updates.
I think you misunderstand me. I'm not saying valves infrastructure isn't valuable, or what they offer to gamers isn't good. Again, Steam is not a product to gamers. It's a marketplace that charges rents to game devs. I'm saying it's not value added to the product that is produced. The product that's produced by the game dev is the same regardless of whether they put it on steam or not.
Most of your points are about how much value Steam offers to gamers in a colloquial sense. Of course, its a lot. But it's not in an economic sense value added to the good produced. Valve taking a 1/3rd cut is more akin to an extractive feudal lord than a collaborator in the making of the good (the game) and sharing in the profits.
I think I understand your position and disagree on many games (as others may have communicated better). I think most games I play are a better deal because steam and valve exist. Cloud saves and multiplayer setup both have definitely quadrupled the value of many many games for me, it is not close.
Also, valve created a new hardware to increase gamer access via the steam deck. Those sales and that user base both add value for devs. Similar argument for Linux, except valve doesn't even rent seek on most of that. The drivers are for everyone.
Sorry to be like this, but I don't think you're getting it still. Like I said, colloquially Steam has value. And especially in relation to you, the gamer. How much you personally value your games more because of Steam, though, is irrelevant, and Valve creating a new product is similarly irrelevant to what I'm saying. Steamdeck does not increase the economic value of any other product (though, I love my Steamdeck)
Again, you are not the consumer of Valve's (main) product. Valve's business model is to sell shelf space to the dev. It's to allow the peasant into the walls of the city to sell their grain in the market square.
The value I'm referring to is the value inherent in a production of a commodity that originates from the raw materials and labor that workers put into it. I'm talking labor value. It's the value of the grain that originates in the workers toil and the raw stuff.
Valve might help realize gains from the game, but it is not involved in the production and does not create nor add labor value to the game. Their business model is predicated on extracting rents from developers, the people doing productive labor.
You could maybe argue Valve creates value in the production and maintenance of the commodity that is Steam's infrastructure and sell it at a fair price. But in this context, the whole point of that infrastructure is to realize the value created from the labor of developers, making it extractive in nature. Do you see what I mean? You're right back at the point where they're charging developers a rent to access the marketplace. And the whole thing falls apart without devs (workers) creating a commodity (games) from which to extract value. This is what I mean when I say Steam is not value-adding -- not that Steam doesn't have (colloquial) value.
Does that make sense?
I apologize for not reading you carefully enough. Indeed, I simply disagree with your application of the labor theory of value, to the point that I think your claims in this specific case do not make sense. (Some of the arguments made here I think are strong reductions-to-absurdity against the labor theory, but I will try to explain my objections from within the theory.)
I think you can salvage many cases of this theory of labor+materials by picking good boundaries for what a 'product' is. What the market chooses to say it is selling to you is generally lies, which we shouldn't trust. What it actually is selling to you is often a large amalgam of things. We should consider the value of a whole bag of goods that the consumers/world can interact with because of the purchase. When you buy a train ticket, we do not judge its value by the quality of the printing (or, more generously, the labor+materials of the chair you sit on). It's value comes from all of the train engine and the train car and the tracks they ride on and the stations they visit and the people who run them. In this lens, I think we should not consider a game as only the programming+assets made by the dev team. A game is thus, at least:
I cannot accept a theory of value that says tabletop simulator's value is entirely independent of if you can play multiplayer. It is, to me, a multiplayer game. I am reasonably certain that the game devs don't host that server, did not write the server code, and do not manage connecting different players together. That's all part of the product, and I think it's a part that valve should get credit/payment for.
I note that when game devs did not generally use steam, valve made their own (excellent) games. I suspect if people started leaving the platform, they would return to it. I think this refutes the claim in this quote. The infrastructure is so good that it genuinely improves many many games. (Now this has extended to marketting, so that even games that work great from itch.io also want to be on steam. I agree that these network effects are much closer to rent seeking and don't add value under the labor theory. But I have not seen a strong argument that valve has been anti-competitive with this privilege, and I think it is just wrong to assert that valve does not contribute to many of the games cited in this thread.)
If you package a game as not just the assets and code, but also the things that make it possible to use those in the way the game dev intended, then steam is selling a large portion of each game. Every time I run a steam game, I am running a substantial number of lines of code written because valve exists, often more than the number of lines of code written by the game dev. If I bought the game elsewhere, this would often not be true.
Infinite effort and using up all the gold on earth, spent making a game that can only be run on temple OS installed into a vintage N64 in orbit around mars, is entirely wasted. The game would have no value because there are no consumers: it cannot enter the market. The labor theory of value only makes sense for things that are, in fact, sold. To take another example, train engines are valuable because train tracks exist and vice-versa. There is no service to sell with just one of the two. We live in a society.
(I do not intend to argue valve is perfect; in ways and cases they are a monopoly and have behaved as rent seekers. But I think your claims are too strong/sweeping.)
I'll have to read this a little later but just want to say now thank you for your genuine response
Sounds good; and thank you for taking the time as well.
So I agree that you can kinda twist around the definition of product, and things get complicated when a product includes other services. But (and maybe this is what you meant by reduction to absurdity) I'm not sure how its possible to think the product of a game is actually not just a game, but also everything else that the game requires in order to achieve some level of use-value. I mean, I feel like most people recognize that the computer is a separate product than the game. Or that when you buy a car -- you're not also buying the gas to run the car.
I think one of the nice things about LTV is that it allows for subjective valuation of some thing or service, use-value, that is completely separate from a more objective (though, not completely) valuation of that thing or service that is based on a concrete number of raw materials + a somewhat concrete number of labor price.
So, you're saying you can't accept a theory of value that holds that a multiplayer game that cannot be played. I think that is reasonable, in this instance, but the issue is that isn't scalable to other instances. The use-value of a particular product or service to you may be different from the use-value for another. For example, a non-working vintage camera or street-illegal car -- you may say "well, it's a camera that doesn't take pictures, therefore it has no value. It's a car that doesn't drive, it's got no value." but it's apparent that people will pay for these things, so they must have some value, right? At least if we take the inverse of your later implication that
Though, maybe I shouldn't assume that you also imply that if there are consumers, there is value. I think, though, that is the neoclassical assumption -- that if there is someone paying, then the product or service has some value that is equal to the price paid.
In my view, LTV allows for these cases, and even those where there is no consumer, like a game that can only be run on the Mars rover, because there is some value that was created based on the labor and raw materials independent from the infrastructure required to realize that value and turn it into cash.
And yes, I wont deny that part of Valve's business is selling products of their own to gamers (btw, such a timely announcement! i am so hyped) but I'd argue the majority of their money comes from commission on games sold on Steam -- to me, this establishes game devs as Valve's primary customer (though, more in the way that Walmart or Amazon's primary customers are the companies and craftspeople who sell their products there) rather than gamers.
But this isn't exactly true, is it? Train engines may be bought by a company or state that owns the lines, or vice versa. They can be independently sold as products. A train ticket is just purchasing access to infrastructure, so I'm not sure its worthwhile using a ticket as an example, since its value is all wrapped up in other factors such as the distance the traveler is going, the date and time they're embarking, etc.
I agree with this, I'm not sure I can call out anti-competitive practices. I think its fair to say Valve makes experiences with some games better -- assuming a multiplayer game uses Valve's servers, for example -- but I'd still say that is more akin to saying "the road makes the car better" where I'd also recognize that the road doesn't add value to the car (in my view).
Or maybe this is a better scenario: imagine there are no (or very few) sporting goods stores in a whole country. But! there are basketball courts -- open to the public, but owned by a private company. It's one of the best places to play basketball. They maintain the court so well, and its always open. But, it's one of the only places that sells basketballs, which are manufactured by another private companies. I wouldn't personally say the company that owns the court contributes value to the basketballs, despite much of their (the basketball's) use-value being tied up with the existence of the court. I'd say they have an access to a resource (players) that basketball manufacturers require to realize their value, and they charge a rent or a tax on them to access that resource. And that they retain access to that resource by maintaining the best court, and, sometimes, selling a basketball of their own (which also happens to be one of the better quality basketballs out there, because they just can afford to)
Edit: (in this scenario, I'm not saying the company that owns the basketball courts did so by being anticompetitive, btw. they did it by maintaining the best court, after all. another private company could open up their own court and compete, right? everything is just as it should be! Well, I'd say not quite, considering the dominance of the already-established company. While this may be well and good and just from a neoclassical perspective, the power consolidation is too significant, to me, to justify as, erhm...how things ought to be, i guess?)
Pretty sure at this point we are just debating (well, lightly. maybe, more accurately, discussing?) the neoclassical concept of "value" that is simply intertwined with "price" vs the marxist concept of "value" which is separated from "price." It's worth noting, if you haven't already guessed, I'm not an economist and hardly equipped to debate the merits of these two, erm, ideologies(?) so I'm trying to frame all this as my conception of LT which -- well yknow I'm prone to mistakes and misconceptions.
But yeah anyways those are my thoughts on the whole thing -- mostly I'd maintain Valve's main business model is closer to a digital fiefdom than it is to the classical model of capitalism that is produce and sell a product. (and I guess one more side-point. I think that their cash from this side of the business allows them to take a really long time creating more traditional products marketed toward gamers. This is just a feeling, but they have the resources for their products to fail, and to aggressively price them in a fashion where they don't even make a profit from them. Similar to how Meta isn't making a profit from Quest headsets -- the idea is to just get people into the Meta ecosystem.)
Anyways x2 sorry for the long-ass reply. I was chewing on what you said for a couple days, thinking, "this dude is crazy -- how could they believe that a product includes all this other stuff?" but i think i might see your point? lemme know if i missed it. thanks
For both of our sakes, I'll limit the scope of my reply. I do appreciate the discussion (and I agree with several skipped points).
I think what makes this strange for me is that, in the case of valve code vs game dev code, they are the exact same material result of labor (lines of code), both doing the same thing with it (charging for access). Really, they even charge the same person (both take a majority cut from game buyers). I don't understand how in this extremely parallel setting, valve gets singled out by LVT.