undefined | Better HN

0 points0xbadcafebee6mo ago0 comments

> Valve gives you access to a huge player base and lots of useful marketing tools and such.

So does Apple. Despite this, they are both engaged in rent-seeking (https://en.wikipedia.org/wiki/Rent-seeking), which has a harmful effect on everyone but them.

Imagine if roads weren't public, but were built by a single private company. You have a business that moves goods by truck. You can use the private company's roads, but only if you pay 30% of the profit of your goods to the company that owns the roads. It only takes 2% of the profit to maintain the roads; the other 28% is profit (rent) for the road-owning company.

You could choose not to use the roads. But then the only way to deliver the goods is by parachute (which may be possible, but isn't practical). So you use the roads. But this means you have to jack up your prices to make any profit for yourself. Competing is much harder (tighter margins), and your customers are paying more than necessary. Everyone's life is harder, except for the road company.

0 comments

mjr006mo ago

Except in this example, there is nothing preventing other companies from building new roads. And in fact other companies have attempted to build new roads, competing by lowering the 30% fee to 10%, and even paying trucking companies to start using their roads. Except their roads are so poorly maintained that trucking companies choose to continue using the existing roads despite the higher fee. Also EA made some roads that went directly into the ocean for some reason.

This doesn't match with the definition of rent-seeking at all, as described in your wikipedia link:

> Rent-seeking is the act of growing one's existing wealth by manipulating public policy or economic conditions without creating new wealth.

To my knowledge, Valve has not manipulated public policy or economic conditions to maintain Steam's dominance. Steam hasn't pushed for legislation to prevent competitors, it hasn't prevented developers from selling their games on other platforms, and it doesn't even prevent you from installing non-Steam games on Valve's own proprietary hardware and operating system.

1 more reply

roggenilsson6mo ago

>Rent-seeking is the act of growing one's existing wealth by manipulating public policy or economic conditions without creating new wealth

Would the PC video game market be bigger or smaller without steam?

Loughla6mo ago

I think it would be smaller.

While I hate always connected DRM, and lamented the death of physical media when steam got huge (and also refused to get a steam account for years for that reason), we would have multiple shitty stores if steam didn't exist, I think.

Look at epic and all the other distributors. Their stores are terrible and that's with the inherent competition of going against steam. Imagine if they were the only game in town. . .

Ekaros6mo ago

Also looking at history. Download stores run by game stores. Or some startup. Some random extra DRM involved. Shut down in a few years without recourse... Just imagine that repeating every few years. Maybe fine for Linux and Mac users who expect no longevity from their purchases. But as PC user, no not acceptable.

j / k navigate · click thread line to collapse