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this post was submitted on 22 Sep 2023
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Valve almost makes me believe in capitalism.
Just run the company in a way where you don’t really care about maximizing profit. As long as you’re not at a loss and are liked, you will be successful.
Valve could probably be much more profitable at the expense of being a bigger dick, but Gabe is chill.
Also because valve is private, they don’t have any legal obligations to return maximise profit. They can purposefully lose money if they want and it’s not illegal. (At least to my knowledge)
It would be illegal if they did it to price out the competition, which I don't think is something they do.
Thats actually what valve does. Valve mandates all games on platforms must be the same retail price (e.g a game on Steam cannot be sold for 60$ retail, but be sold for 50$ on epic), not including deals and sales.
Its standard with how physical stores demand that digital copies of games must retail at the same price as physical else stores would see that as an attack on the business by the company.
There is essentially some level of price normalization.
Ton of public companies lose money...
As long as execs get paid, it is all good.
Yeah, that's it right there. Not being public means they don't have to appease shareholders who want maximum growth and returns.
I’m guessing this is a big part of it. A private company can do just about whatever they want as there are not shareholders that you are working for.
Private companies can have shareholders(all nfl teams but the Packers), its just a game of finding shareholders who doesnt care about constant short term profit.
Yup. And the moment he steps down (or gets hit by the greed) everything will go to shit. As is tradition.
Since it’s a private company he can just appoint anyone he wants to be the ceo. Maybe his son will take it or maybe he will maintain ownership of it until I’m too old to care.
That's good to know.
Our system of government makes this illegal for publicly traded companies.
Valve is not publicly traded.
Whose system of government? If you mean the USA, then no, it does not.
https://www.nytimes.com/roomfordebate/2015/04/16/what-are-corporations-obligations-to-shareholders/corporations-dont-have-to-maximize-profits
https://www.washingtonpost.com/opinions/harold-meyerson-the-myth-of-maximizing-shareholder-value/2014/02/11/00cdfb14-9336-11e3-84e1-27626c5ef5fb_story.html
https://corpgov.law.harvard.edu/2012/06/26/the-shareholder-value-myth/
But they do run it to maximize profit. There's just allowed to do it creatively instead of obsessing over short term gains.
I mean the company essentially gave up on AAA games for well over a decade because they were making more money from steam, and Gabe famously only approves projects that have a plan to turn a profit or expand Valve's market.
They didn't spread into Linux out of sheer principle. It gives them more control and influence over the market to separate themselves from Windows. And they've done tons of shady stuff with steam like refusing to give refunds until they were sued by state governments.
I don't read it so cynically, yes it's in their best interest and a very smart play, but I don't read malice into it though. Good business move, but also good for the communities and projects they're contributing to.
It helps that they aren't struggling to keep the lights on.
You can't really do what you want if youre constantly worried if you can pay bills. Same for people, same for companies.
Valve is far from a typical company. While technically not, they operate pretty much like a worker owned cooperative. Have a look at their employee handbook: https://www.valvesoftware.com/en/publications
(and Igalia, the company presenting in OP is really a worker owned cooperative).
holy crap I want to work there. I never had any idea they had such a radical structure (or lack thereof)
Is good, but is not the paradise: https://youtu.be/s9aCwCKgkLo?si=a2OGsoF-vHEbb0MH
Excellent, thanks for the link!
If you remove stock market as a whole, maybe capitalism can work a little in a soc democracy, with stock market is impossible
Stock markets are socially acceptable ponzi schemes
A stock market can still work. The ultra high speed market we have now is a problem. Ultra fast trading encourages fast, short term thinking.
A stock market with an update once per day could work better. It would take all the fast impulse trading out of the market, while still allowing price adaptation. When runs and crashes take weeks to play out, it's a lot easier for cooler heads and logic to prevail. This, in turn would favour the sort of traders favouring long term stable investments.
The price updates whenever someone buys or sells, so doing that once a day may be a bit difficult to implement. Forbidding day-trading / imposing a minimum holding time on the other hand may be easier.
A queue type setup could likely work fine. Buyers and sellers could list their offers/requirements as a range. A round robin double blind auction matches buyers and sellers. The new price is calculated, based on this, and a new queue is opened.
Forbidding the various high profit rent seeking would be a little like trying to block a sieve. There are so many variants and workarounds, that closing them all would be difficult. It would also be a lot more vulnerable to being watered down, or declawed completely.
If once per day is too coarse, it could even work at once per hour. The key is it leaves time for people to think rather than reacting from gut instinct and high speed computer programs.
Sounds nice, but I guess the first step is to take control away from the likes of Citadel / Kenneth Griffin since they take advantage of all that information and they already get to bid against every order placed in real time.
I think our government should definitely get on that. In the meantime forbidding this kind of play aka taxing the living shit out of day-trading (like the current short-term/long-term gain system but actually painful in the very short term) should be pretty simple to implement.
I definitely agree with the need for short term fixes. Unfortunately, I suspect the core issues are inherent to the current system. Then again that applies to a lot of things at that level, and perfect is the greatest enemy of good.
Valve is the prime example of rent seeking behavior. It's a private company that collects economic rents on a market thanks to that market being the biggest. They're a private company and their only goal is to preserve those rents. They do that by fostering goodwill. They're everything I hate about capitalism, but I don't hate them for doing it.
They are also a good example of positive middleman behaviour. While they take their cut, the value they provide to both sides is huge.
They are also in a position where they are still easily replaceable. Their dominance is from doing it well, not because they have an absolute lock in.
Part of why this works is because they don't have to prioritise short term profit over long term. Most companies like this get brought up and pumped dry. Valve seems to be the exception.
I don't think Steam is rent-seeking because:
Valve's customers are publishers and devs, and they're charging a finder's fee for connecting customers to the games. To me, that's not rent seeking, that's a direct exchange of money for a service. If you don't think the service is valuable or think you can do better, then generate keys and sell them elsewhere and you won't need to pay Valve a cut.
Valve is capitalism done right imo. You only pay when you receive a service, and only when you profit from the service. Steam also has a fantastic refund policy as well, which is surprisingly rare in the digital goods market.
Unlike every other company in their position they're not complete assholes to consumers :
Most companies in their position would lock their users in, they don't. That doesn't mean they can't be abusive though. 30% of game revenue is huge!
At least gamedevs can generate keys and sell them on other sites to get a bigger cut
I don't think you can do that on EGS or GOG. So they ask 30%, but only if they actually helped make the sale. If you drove the revenue yourself, they're happy to distribute the game for free on their platform.
That's about the least scumbag model I can think of.
Does it?
They can also just sell the game on other platforms no?
Yes, but his way you get the advantages of having it on Steam while bypassing the 30% cut of Valve.
My point was that, while Valve does take a big cut, it doesn't stop gamedevs from bypassing it
The 30% value exists because thats what console devs charge developers for ages. Valve is essentially just matching that.
I think the epic store is much lower.
Ultimately the 30% is as high as Steam estimates they can charge before they have to fear companies leaving their platform and bypassing steam altogether. Honestly I'm surprised it has not happened yet. 30% is super high, and users are not at all locked down like they are in the console market.
Epics is much lower because theyre trying to entice devs, but they are the anomally in the sea of pricing.
Epics trying to win market by enticing devs instead of working on features for the consumer, thats their market plan. Epic wasnt the only platform to have lower than 30% cut. Discord sold games at 10% cut, itchio is similar. Devs essentially debate of the baked in features of the platform and its audience is worth the 30% cut(the existing community, game review system, steams controller api, steam workshop, steamvr). Even just the client. ESPECIALLY to Linux users, on a consumer POV, ask yourself about ease getting to use the native client. Valve offers steam natively, and does a lot of work making the consumer end (and developer end too) easier on linux. EGS for example doesnt even run natively on linux, and requires a 3rd party launcher to run. People tend to take for granted all the things Valve has done for both the consumer and Developer.
Discord massively failed to get users, and devs saw little market in it. Epic takes advatage of their position using unreal engine, and offers some devs money upfront for exclusivity, something certain audiences on PC absolutely hate.
Users use steam because it simply offers them the best user experience. There are a ton of people who just buys their games directly from valve and not a 3rd party site. To a consumer, money's not necessarily the problem on their end, and they dont see the 30% hit that developers take. Something good for the developer is not necessarily good for the consumer and vice versa, and many people make that mistake and conflate that to be the same thing when it isnt.
somebody doesn't understand what rent seeking is.
Valve is not doing rent-seeking...
they have created a service that didn't exist that's beneficial to both the consumer and the seller, they don't do any anti-competitive shit with it as far as I am aware.
in what world is what they do rent-seeking?
are you an edgy 15 year old that just learned a new word and didn't understand it?
Well, Valve is privately-owned company and it's investing a lot of money into the free software ecosystem right now. Yes it's capitalism but very different in principles to the rest of the market.