Valve is not your friend, and Steam is not healthy for gaming

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The drive to be on the bleeding edge of technology powers the PC gaming community. We want nothing more than to run our ridiculously powerful rigs on barely stable beta drivers, with our CPUs overclocked to speeds that are neither advisable nor guaranteed to be safe for our systems.

It’s a good match for the ship-first-iterate-later approach of major Silicon Valley companies who want to expand at all costs and don’t care what it takes.

But companies like Uber, Lyft, Airbnb, Fiverr and the others are starting to feel the risk of that edge. The world is finally realizing that a hands-off, profit-first, tax-dodging “connection and services platform,” powered by the cheap labor of people who aren't technically employees and have no rights isn't exactly a good idea. In fact, it may be a very bad one. Whether this means government regulators finally getting their act together, unions winning court cases or citizens voting them out of town, these companies are starting to feel the downside of moving fast and breaking things.

If you were to ask the average PC gamer, they’d swear up and down that there’s no way they’d ever give their money to such a corporation. They’d not only be caught dead before helping a company like that come to power, they might even join the resistance to stop them.

And yet, that sort of operation is exactly what the PC gaming community has been supporting, promoting and defending since 2004 when Valve more or less forced us to install Steam by bundling it with Half-Life 2.

Behind the smile

Valve didn’t always seem like the sort of corporation which thought of its customers as meaningless numbers in a colossal profit machine. How could it be, with its fierce and innovative vision for digital distribution, its stable of influential first-party titles and its approachable, meme-friendly CEO? "Look," we said to each other, "you can send Gabe Newell a funny email, and he may respond with a joke! What a good guy. Valve is good."

Perhaps Good Guy Valve did exist, at one time. But beneath the glassy smile of Good Guy Valve today lurks an altogether more cold and corporate beast, a textbook rent-seeker that is profiting from both hostile practices and a bizarrely customer-supported near monopoly on PC game sales.

Reddit

It seems increasingly unlikely that Good Guy Valve ever existed. Good Guy Valve is a clever marketing conceit, a machine operating on a massive scale and one that can only do so because it is powered by the one thing Valve would later come to exploit above all: the free labor of adoring users and consumer goodwill that often feels both unearned and bottomless.

Valve controls an unprecedented slice of the PC gaming industry, and there can be no doubt that the power behind the throne is, and always has been, us. Good Guy Valve worked hard to make us believe that willingly installing surveillance and control software onto our computers was a morally benevolent, perhaps even righteous act — and we swallowed it hook, line and sinker.

All of this began when Valve released an easy way to keep Counter-Strike updated. And then Valve figured out it could get a lot of people using the software by making it a mandatory part of Half-Life 2. Here’s what ExtremeTech wrote in 2004:

In an unusual first for PC games, Half-Life 2 will require some form of Internet access upon installation, Valve Software’s Doug Lombardi confirmed today.

“All versions require an Internet connection upon installation” to prove the legitimacy of a player’s copy, Lombardi said. “This is for authentication/anti-piracy purposes. Once this has been completed, the owner of either the retail or the Steam version can play Half-Life 2 single player in offline mode.”

We were so young then.

Remember that even the retail version of Half-Life 2 required the installation of Steam, which means any store that sold PC software was selling you their doom with every copy of the game.

Anyone who wasn't immediately convinced it was worth it only needed a few minutes with Half-Life 2 to see the error of their ways, reaching for the gravity gun to hurl a toilet into the face of a Combine soldier, leaving the EULA unread and untouched but agreed-upon nonetheless. Innovative titles like Team Fortress 2 and Left 4 Dead cemented the decision, reassuring us that our lopsided relationship with Valve had more benefits than it did drawbacks. It was convenient. It worked. We didn’t need to think about it.

Valve bought our loyalty with cloud-saves and claims of piracy as a customer service issue. Steam gave a lot back in the early days, even when it was laying down the tracks for a lot of questionable decisions in the future. We also didn’t want anything else once we were comfortable with Steam, which is a big problem for anyone who doesn’t want to give Valve a third of every sale.

Get ‘em while they’re young

Steam’s near monopoly has always been happily supported by players and even the press.

EA launched its Origin client in 2011, and demanded that we install it if we wanted to play Battlefield 3. Our collective Stockholm Syndrome for Steam kicked in en masse, and we rained hellfire on this “greedy corporation” for its temerity.

“It seems like the only redeeming feature of Origin is all the free stuff they give away,” a forum post from two years ago states. “Getting the Titanfall DLC for free was great and same with some old classic PC games like Wing Commander. But when you step back and look at the situation, it just doesn't make sense. They are giving away games, refunding the broken ones, and trying to manage all of this through a poorly designed digital game service. It only makes sense when you remember that EA is a greedy company that just wants more money and more power, which they seem to lust after in an almost blinded like fashion.”

There is almost a sense from the writing in 2011 that everyone should just roll over and accept Steam. Not wanting to give another company a big chunk of your revenue in order to use their store is characterized as wanting “more money and more power.”

“Developers have sometimes complained about Valve’s hegemony in digital distribution and wished for seriously competitive alternatives,” Geek.com wrote. “It appears that EA is taking this possibility very seriously with Origin, but it won’t exactly be to gamers’ benefit if in three years’ time all gaming PCs are running stores from Valve, EA, Blizzard, and Ubisoft at all times just so that players can access their purchases.”

Valve had all your information and was tracking your data, but it would be wrong for other companies to do so. Valve takes 30 percent of each sale on Steam, but anyone who wants to keep their own revenue is seen as “greedy.”

Origin

Looking back, it's strange to think how quickly even the most vocal Steam-haters came to terms with the idea of keeping Valve’s software on their computer. Eight short years after feeling concern about one forced DRM installation, we suddenly had nothing but vile contempt for another, as if being forced to use one particular monopoly-surveillance-control channel was the most natural thing in the world, but the existence of a second is untenable.

Steam is Good, and Origin is Bad. Steam is run by Good Guy Valve, and Origin is the devilspawn of EA, the Evil Corporation Who Doesn't Care About You. We know these things to be true ... right?

No sale, no ownership, no refunds

We all eventually discovered that our close, personal and entirely fictional relationship with Valve did not entitle us to any kind of refund on our purchases.

But it took the better part of a decade for enough people to start noticing that Steam's refund policy wasn't so much a “policy” as the words “eat shit and die” printed in huge size 72 font and to start raising hell about it. We were used to buying our PC games in stores, and we had recourse if they didn’t work. We could go talk to someone. Steam never provided that luxury, and it still doesn’t.

The occasional no-refund horror story was dismissed as the exception, not the rule. It didn’t cause near enough to damage the Good Guy Valve golden brand, and an incredible 11 years passed before enough people were possessed of enough indignant fury to actually complain to the authorities.

Players began noting that was Valve was doing was wildly illegal, pointing out quite accurately that under European Union law, consumers were entitled to a refund on all purchases — even for something as simple as changing their mind.

Never one to shy away from a little thing like "breaking the law,” Good Guy Valve quickly came up with a solution: an entirely new EULA custom made for the good gamers of the European Union, which specifically acknowledges that they have a legal right to a refund ... and then immediately forces them to waive it if they want to purchase the game.

Eighteen months of drama unfolded in the Australian Federal Court from 2014 through 2016, as the Washington software giant used every trick in the book to stall the ongoing, inevitably damning case against it.

Valve, backed into a corner and hissing like a cat that doesn't want to go to the vet, pulled out all the stops to avoid providing the required financial information — to the point where a seemingly infuriated and exasperated Judge Edelman blasted Valve for “overkill” and issued the most politely worded legalese version of “go to hell” that anybody has ever committed to paper.

“If Valve’s private financial information is made public, Valve submits that it could make negotiations with potential business partners more difficult,” the company tried to argue. The implication is that, were anyone to find out how incredibly lucrative Steam had become, they might negotiate harder. The judge wasn’t having it.

“Even without examining the details of Valve’s net profits, it is very difficult to see how any disclosure that Valve is a highly profitable business will come as a great surprise to any fraudster, third party game developer, potential business partner, patent troll, or supplier,” Judge Edelman wrote. “There are related matters to profitability that are already public information, which were discussed without any suggestion of confidentiality in the liability hearing. Those matters include that Valve has approximately 2.2 million subscriber accounts in Australia and that it operates in many countries worldwide.”

Unsurprisingly, Good Guy Valve's defense — that they “don't operate a business in Australia,” they only sell things to Australians and take their money in return — also didn't hold up in court. In a landmark decision that set a precedent for establishing digital software as “goods,” Edelman ruled that Valve was in clear violation of Australian law and needed to cough up $3 million in fines. The language was damning.

Justice Edelman also took into account “Valve’s culture of compliance [which] was, and is, very poor”. Valve’s evidence was ‘disturbing’ to the Court because Valve ‘formed a view … that it was not subject to Australian law … and with the view that even if advice had been obtained that Valve was required to comply with the Australian law the advice might have been ignored”. He also noted that Valve had ‘contested liability on almost every imaginable point’.

A landmark victory to be sure, but when even the most conservative estimates value Valve at more than $3 billion (and that was in 2015), it's hard to imagine that Newell felt any kind of sting.

Even when Valve finally did get around to launching a refund program (a full two years after the supposedly evil EA did it!), many people quite accurately and angrily observed that the default refund option was in Steam credit, which means Valve wins either way. It's almost like Good Guy Valve just ... doesn't want you to have your money back.

The language Valve uses on Steam to this day reflects the pouty attitude the company has towards its loss in court.

European law principally provides a right of withdrawal on software sales. However, it can be and typically is excluded for boxed software that has been opened and for digitally provided content once it has been made available to the end user. This is what happens when you make a transaction on Steam: The EU statutory right of withdrawal ends the moment the content and services are added to your account.

At the same time, Steam voluntarily offers refunds to all of its customers worldwide in a way that is much more customer-friendly than our legal obligations. You can find the details here: http://store.steampowered.com/steam_refunds/

But Gabe, I thought we were friends?

Shut up and take my free labor

There is arguably no single phenomenon that more exemplifies the lopsided and abusive relationship between Good Guy Valve and its customers than the Steam Sale.

We love the Steam Sales and the discounts they bring. But perhaps even more than we love the low, low prices, we love The Sale Event itself. We love the pre-sale videos that we carefully cut together to hype each other up for the imminent spending spree. We love the in-jokes and the memes, the constant banter about the bleeding wallets and the screaming, tortured credit cards that just can't take any more.

There's a word that people use to describe “creating a sense of excitement to improve spending on an upcoming commercial event,” and that word is “marketing.” Marketing is a job, and in the real world, people get paid for it.

But in the world of Good Guy Valve we give that marketing away, for free, to a billion-dollar corporation every year (sometimes twice a year, if he asks nicely), doing our bit to help that corporation make more money during a sale event.

This is the terrifying power of Good Guy Valve. By positioning himself as the scrappy underdog who is “part of the community, rather than benevolently standing above it”, he allows us to feel good about ourselves for helping out, allows us to trick ourselves into a shared fiction of thinking we’re joining forces (as equals) in an important fight.

“We have this kind of shared desire to build these types of entertainment experience, and everyone contributes in some way,” Newell said. “Someone running a server out of their home using a DSL line on their PC is being philanthropic, but we’re colleagues of all of these people and that’s what game design needs to be.”

We’re colleagues in the sense that Valve gets our money and our labor, a topic we’ll talk more about later. We do our part with the memes, the articles and the social media posts, and our good friend Valve does the rest. The rest meaning taking our money.

And then, after all that, we don't even play the games.

A beautiful friendship, where we work for free

Back in 2011, Good Guy Valve tore up the playbook again, showing us once and for all that they weren't an uncaring corporation — in fact they wanted nothing more than to open up their Steam Workshop and let us play around in their magical worlds of Dota 2, Team Fortress 2 and, later, Counter-Strike GO.

And you can earn real money from it, they told us! Buy these items, and the 3D artists who made them will get 25 percent of the profits. We're all in this together!

Talented 3D artists surged out of the woodwork, and the airwaves were saturated with feel-good stories of creators making very decent, livable wages off the sales of Demoman swords, machine gun skins and wacky couriers.

Valve themselves eagerly trumpeted that they had paid more than $57 million to Steam Workshop creators over four years — an enormously impressive figure until you realize that it's only 25 percent of the sale price, which means Valve just made $171 million profit from ... setting up an online form where you can submit finished 3D models.

As far as Valve is concerned, it's a fantastic arrangement: You do all the hard work for free, knowing that you might never be paid, but hoping you will at some point. This is called “speculative work” in the industry and it's hugely frowned upon as exploitative and unjust.

Valve sells your work to other people, and they take the overwhelming majority of the money from each transaction. Everyone's a winner ... but Valve, whose running costs for the store are essentially zero, and who have just tricked you into joining their content farm, is the biggest winner. You’re putting up your time and effort, and those have a very real cost for you. Valve has lost nothing other than the sunk cost of the employee time spent maintaining the store, while gaining a lot of revenue.

The agreement itself states that you have no specific right to any payment, outside of the ability to upload the item.

“Except where otherwise provided in App-Specific Terms, you agree that Valve’s consideration of your Workshop Contribution is your full compensation, and you are not entitled to any other rights or compensation in connection with the rights granted to Valve and to other Subscribers,” the agreement states. The specific Workshop agreement also forces you to keep the sales data itself confidential. Want to tell someone how well your items are selling? Too bad.

“It's impossible for artists to live on the workshop alone anymore, something which Valve used to repeatedly brag about,” explained one prominent Workshop artist to me in an interview for this piece. Valve has just recently slashed royalties for Dota 2 creators to almost nothing, right on the eve of the next massive International tournament. According to this artist’s estimate, their share has gone down from 25 percent to more like to five percent or seven percent, and communication from Valve has been unclear or flat-out non-existent.

“Despite getting three times as many items in [to the latest Major], I'm getting a third less money,” they continue. “Things are effectively five times worse, and that's not factoring the fact that the sales themselves are worse.”

This artist has made tens of thousands of dollars from Steam Workshop item sales, and is still in love with the idea of content creation and modding, even if they're not overly optimistic about the future of the Steam Workshop. They describe their relationship with Valve's technical and tool support team as fantastic, but say there is always “zero word” on anything financial. Or, to look at things in a more cynical light: Valve is eager to provide the tools that enable you to work for free ... but always has somewhere else to be when you want to talk about payment.

“More experienced game artists, especially those at an AAA level, now find that the workshop is not worth their time anymore (and that's in light of the fact that it already was a big gamble before),” they add. “This means that the quality of the items will naturally go down. It feels like many of Valve's decisions, really: short term profit for them, but it screws over the long term viability of everyone else.”

Valve Software

Dota 2 continues to grow — not least of all because the prize money for the International tournaments is literally donated by us, the players, who purchase interactive Compendiums and Battle Passes to raise prize money for the competitors (from which Valve takes 75 percent).

When you decide to support Dota 2, Good Guy Valve takes your money, puts 25 percent into the prize pool for the players and keeps the rest for himself, and even then the prize pool was nearly $20 million in 2016. I'm sure you can do the math.

The numbers have stopped adding up. The International is a huge draw, Dota 2 is the most popular game on Steam, Steam Workshop artists are now being paid much less, and all the while Valve seems to scream blue murder if you ask impertinent questions like "Hey, listen: exactly how much money are you making?"

It gets worse. Four years ago in the Dota 2 First Blood Update, Valve announced to the world that Steam Workshop items could now be re-sold on the Steam Community Market. Item creators would receive “a share of each resale of their item,” the splash page promised, and those creators were excited at the possibilities.

The item re-sales are in full swing today, but that promised share of the profits for creators is still undelivered and Valve refuses to answer questions about where their money is. We emailed Valve for a comment on this issue before publishing the story, and have yet to hear back. After all, if you don't say anything, you can't tell a lie to the internet, right?

The artist I spoke to only agreed to being published on the condition that they remain anonymous, and the reason for that is clear: It's a fairly open secret in the creator community that our friend Good Guy Valve doesn’t take kindly to being criticized (and in fact, when the time came to finally air their concerns in public, a group of Dota 2 workshop artists decided it was safer if they created an anonymous Reddit account to do it).

I asked this Steam Workshop artist what rights they had when it came to disputing decisions or outcomes with Valve about their work.

“None,” they answered.

The dream becomes a nightmare

Fourteen years after Half-Life 2 — a game, by the way, that will likely never see a sequel unless it can be bundled with another leverageable platform — Good Guy Valve has smiled and exploited its way to a position of astonishing power and influence.

Even on an organizational level, Good Guy Valve seemed like Dream Guy Valve, who you would kill to work for. Their famous internal handbook "leaked" in 2012, painting a beautiful picture of a free-spirited workplace where genuine creativity and absolute, unchecked innovation bubbled out like a freshwater spring in a magical forest.

Much like the ones on their famously mobile desks, the wheels on that particularly romanticized notion appear to have fallen off. Former Valve employees have come out to slam the internal culture as being a high-school like mix of cliques and backstabbing, with another engineer saying it was "the worst experience of my life" and with desk setups similar to a "panopticon prison". Valve was even slapped with a court case after one transgender employee alleged that her supervisor constantly referred to her as “it.”

In fact, one of her key complaints in that court case is that Valve fired her after she raised concerns that the company was exploiting people who loved their products, in order to provide translation services for free. Sound familiar?

This, then, is Good Guy Valve — a corporation which employs precision-engineered psychological tools to trick people into giving them money in exchange for goods they don't legally own and may never actually use while profiting from a whole lot of unpaid labor and speculative work ... but isn't “evil.”

A company which will spend what has to be millions on legal fees to avoid having to pay you $15 in refunds, but which isn't “evil.” A company which exploits, underpays, deceives, obfuscates and refuses to cooperate at nearly every turn, but would never be caught dead doing “evil.”

This is the Good Guy everyone seems too afraid to call out, the toxic friend who is so popular that upsetting him will just make things worse for you, so you convince yourself he's really not that bad and that everyone else is over-reacting. Once the Good Guy illusion has disappeared, we're left with the uncomfortable truth: Valve is nothing more than one of the new breed of digital rentiers, an unapologetic platform monopolist growing rich on its 30 percent cut of every purchase — and all the while abrogating every shred of corporate or moral responsibility under the Uber-esque pretense of simply being a "platform that connects gamers to creators.”

The imaginary Gabe, the one in our memes, is a cultural defense mechanism, a happy fiction we all invented to make us feel better about the fact that we were, and remain, willing partners in installing PC gaming's biggest, most opaque, exploitative monopoly — one which we know deep down doesn't care about us at all.

Maybe it's time for all of us to wake up.

Tim Colwill is a trade union officer by day, and the creator of satirical gaming site Point & Clickbait by night. He is, against his better judgement, on Twitter.