Valve, the company behind PC gaming platform Steam, has been named in a lawsuit that seeks a potential £656 million in damages from the company. This lawsuit claims that Valve uses its dominant position in the PC gaming space to claim 30% of revenue from games sold on its platform, which the lawsuit argues is too high and has a direct negative impact on consumers.
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The lawsuit doesn’t have a court date yet, and Valve has attempted to have it dismissed. However, it was granted Class Action status in late 2024. If Valve loses the lawsuit, it could result in consumers receiving a payout of roughly £22 to £44. However, any payout is likely years away and is contingent on Valve’s loss.
Interestingly, the lawsuit targets Valve despite the fact that its revenue share cut is the industry standard. Sony’s (SONY) PlayStation, Microsoft’s (MSFT) Xbox, and Nintendo (NTDOF) all take a 30% cut of revenue from digital game sales. The same isn’t true on PC, where Microsoft takes a 12% cut of revenue and Epic Games takes a 12% cut after a developer’s first $1 million in net revenue per year. Both Epic Games and the Microsoft Store have failed to draw consumers away from Steam despite these lower revenue cuts.
Valve’s Challenge to Console Game Companies
While Valve dominates the PC gaming space, it doesn’t have a leg in the console game market. That’s set to change as the company is working on a revival of the Steam Machine, a prebuilt computer designed to appeal to gamers that don’t want to deal with the normal hurdles of PC gaming.
Valve has already had a trial run at reaching out to console gamers with its Steam Deck, a handheld PC similar to Nintendo’s Switch and Switch 2. The Steam Deck has performed well, though still lags well behind Nintendo’s console sales. This has analysts and gamers interested in the potential of the Steam Machine and the possibility of it converting console gamers to PC.
Video Game Stocks: Which One Is the Best Bet?
Valve is a private company with no public stock for traders to invest in. Even so, there are several other public video game companies to consider. Using the TipRanks stock comparison tool, traders will see that both Microsoft and Nintendo have consensus Strong Buy ratings, while Sony has a Moderate Buy rating. NTDOF stock has the highest upside potential at 55.77%, followed by SONY at 41.78%, and MSFT at 29.19%.
