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A simple law to make online marketplaces more competitive
Quizzical
Member LegendaryPosts: 25,483
It should be illegal for an online marketplace to mandate that if you sell an item through their site, it cannot be sold cheaper elsewhere. This is an anti-competitive practice that facilitates monopolies. That leads to more of the money than necessary that players spend on games being skimmed off by intermediaries who did not develop the game.
For example, suppose that a game costs $50 on Steam. Since Steam takes a 30% cut, the developer gets $35. The Epic games store takes a 12% cut, so if a game costs $40 on the Epic games store, the developer gets $35.20, or more than it would on the Steam store.
Developers should have the option to do this. Right now, Steam policy is that if it costs the end user $40 on the Epic store, it can't cost more than $40 on Steam. If the developer only charges $40 on Steam, then he only gets to keep $28.
Some people have dismissed the Epic store taking a smaller cut of sales, claiming that that savings won't be passed on to players. If that's true, it's because of Steam's anti-competitive practices that prevent it from happening.
This is exactly the rule that makes it hard for possible competitors to undercut Steam's prices. Developers mostly feel the need to offer their game on Steam because so many players use that. If you offer it there, then you can't offer it elsewhere, and have to pay a 30% cut to a company that isn't responsible for anywhere near 30% of the work to bring your game to the public.
If a developer wants for a game to cost the end user $50 on both the Steam and Epic game stores, fine. If they want to charge $50 on Steam, $40 on Epic, and $39 on the Discord store (which takes a 10% cut), that should be an option, too. Or whatever other combination of prices. If players are willing to pay extra specifically to get a game through Steam, that's fine.
But let the developers choose their prices and the players buy where they choose. If some players think it's worth enough to have all of their games through a single launcher and will pay extra for the privilege, that's fine. But don't mandate that Steam gets a huge cut of everything for the foreseeable future just because they had some first-mover advantage many years ago.
If there are going to be anti-monopoly laws at all, then this is exactly the sort of rule that we need. It's narrowly targeted at an anti-competitive practice that heavily skews the market. It's a clearly defined rule, not heavily reliant on the whims of some bureaucrat. And it won't impose meaningful compliance costs, as all that it would do is require certain companies to stop doing things that they're already doing, purely to stifle competition.
What, you thought this thread was about Steam? I was talking about Amazon.
For example, suppose that a game costs $50 on Steam. Since Steam takes a 30% cut, the developer gets $35. The Epic games store takes a 12% cut, so if a game costs $40 on the Epic games store, the developer gets $35.20, or more than it would on the Steam store.
Developers should have the option to do this. Right now, Steam policy is that if it costs the end user $40 on the Epic store, it can't cost more than $40 on Steam. If the developer only charges $40 on Steam, then he only gets to keep $28.
Some people have dismissed the Epic store taking a smaller cut of sales, claiming that that savings won't be passed on to players. If that's true, it's because of Steam's anti-competitive practices that prevent it from happening.
This is exactly the rule that makes it hard for possible competitors to undercut Steam's prices. Developers mostly feel the need to offer their game on Steam because so many players use that. If you offer it there, then you can't offer it elsewhere, and have to pay a 30% cut to a company that isn't responsible for anywhere near 30% of the work to bring your game to the public.
If a developer wants for a game to cost the end user $50 on both the Steam and Epic game stores, fine. If they want to charge $50 on Steam, $40 on Epic, and $39 on the Discord store (which takes a 10% cut), that should be an option, too. Or whatever other combination of prices. If players are willing to pay extra specifically to get a game through Steam, that's fine.
But let the developers choose their prices and the players buy where they choose. If some players think it's worth enough to have all of their games through a single launcher and will pay extra for the privilege, that's fine. But don't mandate that Steam gets a huge cut of everything for the foreseeable future just because they had some first-mover advantage many years ago.
If there are going to be anti-monopoly laws at all, then this is exactly the sort of rule that we need. It's narrowly targeted at an anti-competitive practice that heavily skews the market. It's a clearly defined rule, not heavily reliant on the whims of some bureaucrat. And it won't impose meaningful compliance costs, as all that it would do is require certain companies to stop doing things that they're already doing, purely to stifle competition.
What, you thought this thread was about Steam? I was talking about Amazon.
Comments
Practice doesn't make perfect, practice makes permanent.
"At one point technology meant making tech that could get to the moon, now it means making tech that could get you a taxi."
To me all digital stores should sell the games very cheap and get the same cut.
I'll happily pay more for physical games that cost more to produce. There shouldn't be middlemen for digital games.
My thoughts.
As to Amazon, and Steam.... people, devs, businesses...those that deal with both, or either, of those. Do so for their reach, or the amount of people they can both draw in with their businesses.
And that comes with a cost. I am not sure that that can be said to be an monopoly at this time.
They can take their goods and or products elsewhere. We have lot of proof of that by the amount of people trying to take on Steam right now...the issue is that they are trying to do it separately...
If they all tried to form a group business, take them on together, they would have a much better chance. All the of them trying to outdo one another..not much chance as far as i can see. Just adds a bit of blood in the water the way they are doing things now.
mo·nop·o·ly
/məˈnäpəlē/
noun
But maybe these companies got too big and my thoughts aren't realistic for them anymore.
If the developers must charge other stores more than Steam so that Steam can take large cut then it's not a free market situation any more.
I'd say it's no contest.
"Be water my friend" - Bruce Lee
The vendor's price could be the same to all resellers, but often discounts are given for being a large volume reseller.
The model by Steam is just odd, they are basically demanding the right to mark it up 30% and force the vendor to make sure no one undercuts this.
Weird.
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Just trying to live long enough to play a new, released MMORPG, playing New Worlds atm
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"This is the most intelligent, well qualified and articulate response to a post I have ever seen on these forums. It's a shame most people here won't have the attention span to read past the second line." - Anon
So happens i remember very well a lawsuit broughton the by the USA government versus Hasbro.Hasbro was doing exactly what you mentioned,they were controlling the prices,telling every single store to up the prices to their price so that way there was ZERO competition among stores.
Somehow the government caught wiff of it and sued them.Then of course money like it always does, buys special privileges which allowed Hasbro to stay out of hte news and come off looking like the good guy.They cut a deal that allowed them to donate tons of money and games to the needy at Christmas time,so criminal turned good guy,pretty scummy for the government to let them off the hook.
That is just gaming,we are already seeing right this minute for the past 2-3 weeks Oil companies banded together to jack up prices,so they agreed to not compete against each other.We SHOULD be paying 50% of what we pay at the pumps or LESS.So no your idea does not work in the world,we need to keep allowing businesses to compete and not allow the big guy to control prices.
Never forget 3 mile Island and never trust a government official or company spokesman.
distributors can undercut themselves all they want but I as the developer set the value of my product
You can't mandate how people distribute their goods (with a few exceptions) and I will also say; be careful asking the Government to get involved in anything, if you don't realize they are the biggest criminal organization on the planet you have been living under a rock. I am speaking to the U.S. Gov here, no intent to offer insult to other countries.
If you want a new idea, go read an old book.
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To be realistic, if devs find a distributor that takes smaller cut they're mostly going to use it to take a larger cut themselves. But if the price difference is large, many of them are also willing to do a small price nudge to direct customers to that cheaper store because they get more money for each unit sold there, and even that small price difference is enough to create price competition between distributors.