In 2018 a group of Valve staff tried to figure out just how efficient they were being—and found they were making more money per head than Apple, Facebook, and nearly every tech giant out there

We researched ourselves and found out that we are the best
- I'd trust a group of employees doing this out of curiosity over, say, HR doing it.
  
  Absolutely! I would do it too if I had access to the numbers.

What's the efficiency in taking 30% of almost all game sales on a platform? I know we all love valve, but the efficiency here is having a store that everyone has to use if they want to make sales at all.
- Valve's 30% is high, sure. But you're not seeing the total cost of selling a game.
  And yes, I've done this before.
  Besides the user count, besides all other factors. Digital sales are kinda hard.
  You need to offer the actual game. If you're selling an indie game that's a few hundred megs, well you get to go sign up for a service to deliver it. Could be as simple as a google drive link, but because this is business use you get to pay business prices.
  Are they charging a flat rate per month, per gig? Per download? Some combinations?
  Now there's updates and patches that need to be delivered. Same deal as before, but also now you need to handle the actual patching. Do you ship one big patch that checks for previous patches? Small individual patches that your users have to figure out what one they need?
  Does your game have multiplayer? Well damn have fun with that.
  What about support and refunds and GDPR stuff? Gotta factor all of that in too.
  Now we get to do payment processing. You get to pay a company to accept payments on your behalf because you are NOT doing that yourself you WILL get stuck on inane and silly laws.
  That's part of it. Paying steam 3 bucks on my 10 dollar game to handle ALL of that? Yeah that's fair. Could it be cheaper? Sure. a lot of things could. I don't spend months on a game and then cheap out on the most important part: sales.
  My time is valuable and worth 30%
  
  Not to mention Valve's effort with Proton, allowing non-Windows gamers enjoy what they pay for on multiple platforms with great ease; their efforts have been massive for gaming on Linux, and without it, I wouldn't have paid for a lot of games, earning their developers a whole lot of absolutely nothing.
  Also the community hub, the workshop, the review system, the cloud saving, the functional wishlist, the gifting system, the shopping cart, the anti-cheat (you're better of with it than without it), the discovery queue, the sales dedicated to specific types of games that actually help people discover games and drive the revenue up for the developers, the (I think) complete transaction history, the refunds system, the friends and the chat and profiles - and probably many more things that I'm either not aware of or couldn't list off the tip of my tongue, combined with internal works that, again, do help the devs in the end.
  Steam is much more than a place where one pays for a game to then simply download and play it. It's much greater and more functional than that. None of the developers have to put their games on Steam - nobody forces Epic Games Store or GOG to be this subpar in comparison. Same way nobody forces gamers to use Steam. People use Steam because they love it - or because there's no good-enough alternative, but that's hardly Valve's fault.
  Steam charging 30% is not just worth it, but also surprising, given what putting your game on Steam gets you as the developer, and what it gets us, the players.
  
  Nobody is arguing that valve shouldn't be compensated for the value they provide. Many of us do, however, argue they are taking too much. Their revenue per employee being so much higher than anyone else in the market supports that argument.
  
  Let's not describe this as "paying valve three bucks" because that's not accurate and is misleading.
  It's paying valve 30% of your revenue.
- Man, Epic must be patting themselves on the back for all the money they paid getting people to believe 30% was outrageous, because it's paying massive dividends.
  It may shock you to know that before Steam, your options were to fuck off or offer your product in a store where you would only get 30% of the profit, with the rest going to the publisher, the retailer, licensing, etc. These days it's closer to 50% for physical copies, and Apple/Nintendo/Sony/etc all standardized with Steam on you getting 70% for digital.
  Don't like it? Pull a Valve and make your own alternative that's better. If you build it, they will come... which is why nobody uses EGS.
  
  EGS has become free games store.
  
  I don’t believe if you build it they will come anymore. People are fucking lazy and will put up with whatever the fuck is happening with Twitter for convenience.
- 30% is more or less the standard. Not just in the games industry, but everywhere.
  
  It's actually not the standard, the standard was iirc 70% for in-store at the time. These days I think it's closer to 50%, assuming no 3rd party losses/licensing.
  Nintendo/Sony/Apple/etc are all 30% too, by the way.
  
  The status quo is rarely a good reason for anything
  
  Epic is 12%. Yeah, Epic store sucks and all that. Whatever. There's two marketplaces that aren't first party. One takes 30% and one takes 12%. How is there a standard? You can't look to other markets or other distribution methods to compare it to, because they're all different with their own things.
  Edit: GOG is 30% for indie developers (there's a little more to it than that, but basically that). It sounds like with other publishers/developers they negotiate contracts on a case-by-case basis and don't say what they get.
- Steam does more to promote and support games than many other platforms out there. Epic does not have workshop and forum, Google Play does not promote games as good as Steam.
  
  Google Play ~~does not promote games as good as Steam~~ has ads.
- The efficiency is doing it so effectively that on an open platform competitors can create there own store, pay for AAA games to appear on their store, take the smallest of pay cuts, pass it on to the consumer, and still have customers prefer to pay more to be in the Steam ecosystem. I'm against monopolies but Valve's is absolutely efficient.
  
  That's not how monopolistic marketplaces like Steam (and Amazon) operate, though. They have "Platform Most Favored Nation" (PMFN) clauses in their terms that mean products sold on the platform can't be sold cheaper elsewhere...
  Which means the whole "pass it on to the consumer" can't happen, unless a product risks being de-listed from Steam. It literally removes the ability to compete on price.
- Did you know that almost every other marketplace out there (except that fucked up one) has the same 30% revenue split?
  The whole debacle over it is artificial. It won't change much if it looked better to people who complain now. It won't remove Valve's ability to provide the best service.
  
  There is a difference though in that you do not have to publish on Steam for your game to be available on Windows or Linux or MacOS, but you do need to use the App Store to publish on iOS, so the 30% is mandatory there.
  You can host your own site, you can publish on another app store, it just makes marketing harder.
- There are other game marketplaces out there, but they're bad.
  This isn't like the Apple App store where it's the only option on the platform. In fact, they've competed with Microsoft's store on some things. It's not even like Amazon where they strong-arm people selling things on the platform. Amazon does things like forbid anybody who sells on Amazon from selling the item at a lower price anywhere, including on their own site. I don't think Steam has any requirements like that. Steam's store has a huge market share because people like using Steam. AFAIK, Steam doesn't even do exclusivity deals, which suck for the consumer but are pretty standard for games, except with their own (Valve) games, and those are rare.
  Not only does Steam have a user-friendly library and a user-friendly store, if you launch a game you bought on steam but that is published by a company with a shitty launcher / store / library (EA, Ubisoft, Rockstar), Steam goes a long way to neuter the shittiness of that launcher / store / library.
  Maybe a 30% cut is too big. I don't know. It would be great if someone tried to compete with Steam while keeping the consumer-friendly approach Steam has. Maybe competition would reduce that 30% to something lower. But, most of the other game stores I know of have much less consumer-friendly approaches. The only one that's at all similar that I know of is GOG, and I do occasionally use them, especially for old games.
  
  except with their own (Valve) games, and those are rare.
  Personally I don't have any issue with 1st parties keeping their stuff 1st party.
  It's just that I won't participate if I deem it useless (see Ubisoft launcher) :)
  EG can keep Fortnite etc. exclusive on EGS that is their damn right.
  
  Also developers can generate a unlimited number of Steam keys for their games that they can sell on other platforms and steam doesn't take any money for. So you can make MyCoolGame throw it on Steam then sell copies of your game on MyCoolGame.com give your customers Steam keys and keep the whole price while still benefiting from Valve's infrastructure to support downloads, friend lists, updates ect.
  
  Not to mention Valve has a history of offering interest-free loans to developers to help them get their games out- and there's not even a requirement that you have the game on steam after.
  Not to mention you can generate steam keys to sell on other game stores, in which case steam gives themselves a 0% cut, despite you still using and benefiting from all their services.
  
  That and the steam community and forums are pretty cool too. Alot of tech support for game problems, community mods, discussions, etc.
  
  I believe that valve does require that you don't sell the game for less on other platforms. It's one of the complaints in the lawsuit currently against them by wolfire.
- Plenty of games that make good sales numbers that aren't on steam. Obviously it makes sense to go where the users are though
  
  Some notable examples that aren't overly old include Overwatch 1, Minecraft, LoL, and Tarkov.
- Which is exactly what Apple does with their iTunes store.
  
  Not exactly, apple forces their users to use their stores, whereas Valve just offers a better experience than the other stores out there.
  There is nothing stopping you from using other stores to buy your games on, unlike the appstore.
  
  Apple ties their hardware to iTunes with no competition. Steam offer a platform which is better than every other piece of COMPETING software on a variety of hardware.
  
  Yes, it's all massive profiting, driving the cost of everything up, or putting less money into the hands of the people who make the thing you like.
  When I really love a game, it bothers me that valve, or apple, or Google, or Sony, take 1/3rd of the money. They don't deserve it.
- https://arstechnica.com/gaming/2019/04/why-valve-actually-gets-less-than-30-percent-of-steam-game-sales/
- I used to feel a bit sad about the 30% but then I learned you get stream keys for your games for free, which makes it seem a lot more reasonable.
  
  You have to ask steam for the keys and they can deny them. I'm sure they only refuse to give the keys if they find out you are reselling them or giving out way too many, but I still don't like that they get to decide what "way too many" is here
- Not like it's only for certain ranges 30%.
  It's not a flat everywhere fee.
- I get that you have an axe to grind but:
  What’s the efficiency in ...
  It's the total income divided by the number of employees. You're trying to make this something it's not.

When your employees are so efficient they start using their spare time to audit each other's efficiency on an industry-wide metric.
- I have heard that its not too hard to start your own project when working at valve.
  Maybe it will turn into their next game, or a new steam feature or it will get canned.
  
  Is that still accurate? Their employees handbook was legendary a decade ago, but since then there have been rumours that this isn't the case any longer, and that there were significant problems behind the scenes.
  
  I mean with that money printing machine and good reputation among users it's no doubt be cozy for devs to start stuff without having someone breath down their neck for costing too much money or too high of a risk.
- I mean they have a finance team for sure, so I guess this is their job… However Steam does a really good job to stay in its borders of where they can provide a good service and do not milk the cow until half live 09 where they just repeat the story of half live 1-3 in a poor way

Revenue per head is no doubt a sexy metric, especially for private companies. If it was a public company then investors would call for the company to try and grow its overall profits by spending more on growth related initiatives... Perhaps by releasing half-life 3 for example, lol.
The great thing about keeping your company private is that you can get it just where you like and keep it there no matter what outside parties want. I could totally see Gaben is perfectly satisfied making bank at this level while also having a chill lifestyle.
- If the company were public the shareholders would say “great, now give the employees less and give us the difference”
- Why is money per employer a better metric than customer satisfaction?
  Should an owner be more proud of their yatch size or of being a role model for customers not other millionaires? What's their passion really, money or what they do for a living?
  We clearly know where valve wants to be. I'm just surprised it's a company that stands out.
  Fuck shareholders.
  
  It's not a better metric. It's a metric among others.
  
  They said it's a sexy metric, as in big numbers are cool. They never said it's a particularly useful or "better" metric.
- The article is talking about net income per head, not revenue.

“So we’re getting pay rises, right?” Annakin.gif “Right?”
- You should dive down the rabbit hole. Valve does not have a workplace like anything you've seen before, and the pay is just as fucked.
  EDIT: Down the rabbit hole we go
  
  How much did they compensate that bald man who they installed a valve in the back of his head for the loading screen photo?
  
  My favourite factoid about that is that the minister of finance in Greece who was in charge during the Greek Debt Crisis was Yanis Varoufakis, the former economist-in-residence at Valve.
  
  Like... In a good way?

Back in 2021, indie developer Wolfire filed an antitrust lawsuit against Valve that accused the gaming giant of anti-competitive business practices—including a long-standing habit of taking unfair cuts from game developers on its store. Valve's 30% fees have come under criticism before—and they are notably high when compared to some other online platforms.
Ouch. I didn't realize they took such a big cut. On the other hand, authors trying to publish to Amazon's kindle get hit with commissions from 30%-65% before any other fees, so Steam seems downright reasonable for that particular comparison.
From where I'm sitting, though, I've plenty of complicated feelings. Steam might be the best option out there, but monopolies aren't great for anybody—at the same time, business is business.
Steam's absurd efficiency could be a product of merciless penny-pinching from indie devs, but it's just as likely we're watching a well-oiled machine continue to belch out cash in an expected fashion.
Is it really a monopoly with everyone from EA to GoG delivering games? I guess it is dominant enough to count. I have a hard time complaining when employees are getting good pay and I've continued to get good service from them. It might get scarey if/when Gabe steps down, but this all feels pretty fair for now.
- The unusual though possibly wrong thing that differentiates steam is they don't appear to engage in all that much anti competitive behavior. Possibly some, but not really that much. Ultimately if it's better for the consumer but worse for 'the economy' who's really losing out? By what metric?
  For now, at least. But the secret to valves success here doesn't appear to be very closed source. A fairly flat internal structure, moderately functional store and community reputation building, mostly keeping promises and having which reputation that when they don't they can weather the storm. Nothing there seems unachievable unless your design philosophy is so cut throat and monetized that you just build a bad product.
- Steam isn't a monopoly; they have competition. As far as I'm aware, they also don't have a mechanism to lock people out of the market, so there's probably no danger of them becoming a monopoly. I have no idea why people are going around saying they're a monopoly when they demonstrably aren't.

And that for being a non-public company.
- Non public should be more efficient from the labor cost savings of not having to file all the sec documents quarterly and legal costs of following public company regulations.
  
  Not to mention that an obsession with increasing share price is massively distracting and self-defeating.
  
  This isn't totally true. Private companies can still have shareholders that demand info. Their aren't the same level of regulations, but it's not nothing.

It's because Valve is a private corporation, Gabe Newell has managed it well, they don't hire idiots, and they pay their employees well.
- It's because they have a near monopoly and take a huge cut of developer's revenue
  
  Is 30% on average "huge" considering the platform and total number of averages monthly users? I know that number does move around a bit as well.
  I guess considering the ease of use for users and the fact that other platforms exist, they might be considered a monopoly only because nothing else of quality has shown up. It's not like they're buying out competitors and paying politicians to create laws and expectations to give them a competitive advantage. They're literally just better than the other shit. Except arguably GoG which is solid in its own right, though not in the same ways as Steam.
  
  Last time I checked, Epic Games has plenty of money to compete. Monopoly implies competition is actively being stopped. Valve hasn't done much to stop competition other than making a good product that people use.
  
  take a huge cut of developer’s revenue
  They don't. No other platform will provide all of the benefits Steam provides for only 30% OR LESS of every sale.
- I think it is more because of heavy encouraging of being proactive.

Please invest some into the Linux client. The dropdown click-through problem exists for years already, the source of the problem is known and would be easy to fix on your side.
Or develop an API coupled with your DRM, so the community could develop some good interfaces already.
- An open steam DRM API would be the end of Windows as an OS for gaming
  
  Lol. No.
- Have you tried Windows?
  
  I would rather give up on steam than switch to windows thank you very much

Praise GabeN.

Tried to? Revenue per head and profit per head are very easy metrics. Not sure I would count that as efficient though.
- Totally meta comment, but why is everyone here saying "per head" instead of "per capita"?
  
  Probably because "headcount" is a common HR term for the number of employees, and when people are talking "per capita" it might be more about the number of users or customers. The meaning is the same though.
  
  Business speak vs country speak.

A whacking great cut of somebody else's money will do that.
- If people dont like the cut they can use another shop front or make their own. PC gaming isnt locked down to any specific store front
  
  That's not the reality for game devs
- Point me to one service that provides as many benefits as Steam without taking a larger total cut than 30%. I'll wait.

Actually earned profit too
- What does that mean? They take a cut of every game sold, they didn't make that product. They make the platform the games other people made are sold on.
  It's a good platform nonetheless, but IDK how much of it is actually "earned" as opposed to just a big cut taken from someone.
  
  It's well known that server infrastructure and software development is free

Profit/employees isn't a measure of efficiency, completed projects/employees is and I'm willing to bet that a company without any real organization like Valve doesn't complete as many projects/employees as companies like Apple or Microsoft.
- Valve is basically a file hosting service. I will never understand the computer illiterate gamers who worship that website. Omg it lets me download my games many times! Amazing. Go sell something on the Steam Marketplace. Fucking idiot.
  
  It's not just files. It's forums, chats, performance metrics, and game integration for gaming with your friends with a centralized account instead of 30 different friend group listing across 50 games.
  
  Yeah most file hosts put hundreds of millions into making sure all your files can be used on platforms they weren't designed for /s
  I love when people are proud of having no fucking clue what they're talking about
  
  I don't see why you consider that bad. Yes, it lets me download them many times. And automatically updates. And provides multiplayer. And friends and chat. And a bunch of other features too. This is what they call a "value add".
  
  I mean I both agree but also I think "it's just x" comments in tech always ignore the complexity of scale, availability, and integrity.
  
  I wonder how many of them realize that in a couple of clicks someone can decide they don't have access to their games anymore...

- Fair point, however everyone (just about) has either an android or apple phone. Not everyone plays computer games.
  
  Yes, and since Valve drives up the cost of video games while contributing nothing, they’re certainly doing their part to stymie the industry.

The only one that seems surprising is Apple. All the others don't really make products that are sold. They make revenue via advertising on things they give away free. Valve not only used to make games they still sell, but made a store platform not a social media network.

I've despised steam ever since they forced it on me to play HL2.
I hate the store page that pops up whenever I want to play a game.
I hate the friends list.
I miss when I would just install a game and it was just an icon on my desktop. Now they think they should own my gaming experience and they're so powerful I can't say no.
- You can download games using steamcmd (command line) and pick only games that are DRM free on Steam. Valve doesn't force DRM (even it's own one) so, if you see a game that require DRM (Steam or whatever) it's solely because the publisher put the DRM into it.
  Once you've downloaded your drm-free game through steamcmd, you can basically zip the folder and store your game wherever you want... even on the cloud (your own personal space, if you share it publicly it's piracy).
  Also, you're not even forced to use Steam: itch.io and GoG are preferable ways to buy games and improve your drm-free wallet-vote situation.
  
  I just want to comment that your comment covered all my bases so well I didn't need to respond to OP myself
- That last para is missing the fact that you'd have to go to a store and buy a CD and come back home and play vs downloading in a few minutes in today's time plus get insane discounts. Not to mention easily conquer compatibility issues. Also use controllers very easily including dualshocks. You can still have desktop icons, you can ignore the friends list, and disable notifications/pop-ups.
- Ok boomer
  
  that's not what that means

Apple charges 15-30% fee to sell games built on their platform: 🤮greedy bastards 🤮
Stream charges 30% to sell games on their platform: 😍🥰😍🥰😍🥰😍
Edit: Downvotes without rebuttal prove my point.
- Apple: if you want to sell apps to iOS users you have to pay Apple, there is no other option.
  Valve: if you want to sell your game on our platform you can, but you don't have to, there are many other options you can choose to distribute your games.
  Does that help you understand?
  
  Insert Apu taking a bullet meme
  
  That wasn't my argument. People are specifically against Apple charging fees. Calling it rent seeking. Steam does the exact same thing. Their profit is primarily from these fees, so either we all agree the fees aren't the problem or accept it's anti-Apple sentiment.
  Gaming systems have this same lack of choice but at least for Apple, you can move to an EU country and you now have this choice. We'll see how that plays out.
  Apple users know what they are doing when they purchase the device same as consumers know what they are doing when they purchase a ps5 rather than a computer.
- Apple are assholes, but yes, you're right about Valve. Gamers are mugs the way they give Valve a pass on this. 30% was justified when they were creating this market - and kudos to them on that score - but time has moved on and they're just rent collecting on a massive scale these days
  
  Yes. Valve is greedy because they take 30%. It's totally not the people decrying that fact, who by the way, get 70%, aren't greedy. The loudest of which is the operator of a competing service that is extremely anti-consumer.

They are a monopoly you must give 30% to for a massive industry. Yeah duh.