Valve? You doing okay, buddy? I know it's been a few years since you launched a game, but did you remember...how? to announce? a game?
In case you haven't heard, Steam platform owner Valve, the developer of the Half Life, Team Fortress, and Portal series, as well as DOTA 2 and Artifact, is finally releasing a new game: a hero shooter called Deadlock.
Or...is it? The game was first dug up through Steam datamining and not officially announced. Though it looked near completion, there was every chance Valve could pull the plug and not launch it.
Then, at some point, Valve invited players to a closed beta for Deadlock, using a key system that allowed players to invite their friends. The invites proliferated so far that according to SteamDB, the game's hit a peak of 18,000 concurrent players.
Such invites for unreleased games normally come with varying NDAs, but as The Verge's Sean Hollister discovered, Valve's only attempt to discourage sharing anything about the game was a menu screen saying "don't share info" when you opened the client, with a prompt for the user to say "ok."
Hollister navigated around this screen by pressing the "escape" key. After he wrote about this experience, Valve banned his account from matchmaking.
Hollister's banning tripped a red flag for me. Not just because retaliating against journalists pushes against a free press (I don't want to make too big a deal of this, it's just getting banned from a game's matchmaking), but because this series of events indicates Valve's market power might be getting out of hand.
Is it a monopoly? I don't know, but because Valve owns and operates Steam, the platform it distributes Deadlock on, it's been able to market its game in a way no another developer or publisher can.
Let's dig into why.
Let's step through the stages of Valve's Deadlock rollout.
Valve owns Steam, the platform it distributes its own games on. It funds the development of new games with revenue from Steam and its existing titles.
When Valve releases any game, it competes against other games on the Steam marketplace. Valve's market power is checked by how many games it can deliver, the quality of them, and its competitors' ability/decision to launch on other platforms.
Valve, like other developers, decided to do a closed beta for Deadlock. Unlike most other developers, it has not announced the game yet. This closed beta is run with an invite-based system that is very open, where players can invite others. Valve has deliberately given up control over precisely who joins the playtest because for whatever reason, this fit into its strategy.
Valve could also have legally controlled who is allowed to discuss Deadlock and under what conditions by requiring the signing of an NDA or some equivalent triggered in-game.
It did not, because for reasons I do not know, this fit into its strategy.
Already we are in a position most (if not all?) developers and publishers cannot afford to operate in: tightly controlling information about a game (purportedly) key to its financial success. Valve has an outsized amount of financial stability to endure any loss of revenue that could come from an early leak of Deadlock.
The closest example of another publisher trying this strategy I can think of this is when Respawn Entertainment and Electronic Arts revved up the launch for Apex Legends, and invited a bunch of press and influencers to LA to play the game before it launched. During this test, they still required press to sign NDAs (or at least agree to embargoes, I never learned the specific terms).
Now we enter even more uncharted territory. Valve has placed a game on Steam that it has not announced, and invited people to play it. Not only to invite them to play it, but to invite their friends to play it.
This is where Valve doesn't just have market capacity that other companies don't have, but it explicitly benefits from its position. The company is not making money off of Deadlock, but a beta like this could entice people to one day spend money on Deadlock. Valve is benefitting from this strategy, as many other companies do, so I'm only noting it here as the beginning of its unusual position.
Here is the nail in the coffin for me on why Valve's moves flex its market power: when Valve gets people to share invites for Deadlock, it has the potential to effectively create new users for all of Steam.
Some people playing Deadlock may invite their friends who have not played on Steam before. That's not a farfetched concept. If people have only played Fortnite or Roblox, or have mostly been on console, or have pirated software and not used Steam, whatever, Valve's efforts here have the potential to create new Steam accounts.
Every new Steam account benefits Valve in some way financially. If a player accepts an invite to Deadlock, makes an account, then buys a game from its competitor on Steam, Valve gets a cut. If that player never spends a penny, but hops into other free-to-play games on Steam, they enter an ecosystem that leads to other players spending money in the game, which Valve gets a cut from. In the big picture, Valve relies on other companies to market Steam for it, because they're the ones who say "hey, if you want to buy our game, join Steam." Here, they get to use their own product to do that marketing at a discount compared to their competitors.
And now we hit the "NDAs," a point where I think Valve has badly abused its position. Valve did not require anyone invited to play Deadlock to sign a legally actionable NDA or have them agree to an EULA. It posted a sign that did not even explicitly require the user to click "I agree," something EULAs go to great lengths to spell out to ensure their legality (and even then, some judges and regulators are scrutinizing that).
Imagine this warning, or any document, is a guard at the door. If the guard is named "NDA," or "EULA," when a person asks to pass the threshold, the guard says "you may pass the threshold if you agree to X, and Y, and if you violate that agreement, Z will happen."
The person who wants to cross the door agrees or disagrees, and the guard lets them in.
Here, Valve has dropped a guard at the door who when players ask to cross, it says "don't tell anyone you crossed this door." If players ask "or what?" it does not answer. What will the guard do? Will it bar you from entry? Will it punch you into next Tuesday? Will it open a trap door and you fall in and there's crocodiles but the crocodiles are friendly and you have a nice time with the crocodiles—okay this is getting out of hand, I think you get the point.
Then a person can walk past without saying "ok" to the guard.
That is the purpose of those documents: to create conditions so both parties understand the outcomes and can agree on somewhat equal footing to enter a contract together.
Valve's menu is not an NDA, and it is not an EULA. When Hollister wrote about the game, he did so with no explicit knowledge of what Valve's response would be. When journalists agree to embargoes or sign NDAs, we do so with the knowledge of what will happen when we violate that agreement.
Valve took action and banned him from matchmaking. That is a slap on the wrist—but Hollister had no way of knowing if that would be the only consequence.
Valve could have banned him from all online play on Steam. Valve could have turned off his access to various elements of Steam. Valve could have gone so far as to disable or suspend his entire account. It has the power to flip that switch, and it chose here to take what it felt like was an appropriate response.
But unlike every other game company in the marketplace, it did so without entering an agreement in the first place.
To date, I have not been personally convinced by the lawsuits accusing Valve of operating a monopoly through Steam. That's not to say I think they're 100 percent wrong, I just think as long as I can go buy a game on Xbox or PlayStation, I have a marketplace of choices. That I can play other games on PC without ever opening Steam is another factor.
In other words, I want to leave it to the courts and the regulators to figure out. I'm just a writer, not a legal expert.
Valve's behavior with the rollout of Deadlock has shifted my thinking. Some of the lawsuits against Valve has revealed details about how it "encourages" developers to maintain price parity across platforms, but again I'm not an expert on whether that is considered price fixing. But as someone professionally obligated to follow the game industry, I know when I've seen something I've never seen before, and I have never seen a company enforce an order to not share information without some form of binding agreement in place.
This is a first. And it is a first because Valve has the market power to do this. That power manifests in its control over accounts on Steam, its ability to resist harm from the leak of information, and its ability to benefit its entire ecosystem by letting players invite other players into Deadlock.
I still don't know if Steam is a monopoly! Again, I am a writer and not an expert, and would prefer the courts and FTC step in before putting such an argument to print.
I've been thinking a lot about market power and monopolies in the wake of the recent court decision about Google's search engine dominance and the FTC's objection to Game Pass price changes following Microsoft's purchase of Activision Blizzard, especially with regards to the concept of a "degraded product." Valve hasn't done anything to make Steam worse (in fact, it regularly makes it better for developers and players), but the rollout of Deadlock suggests the existence of some supreme form of Steam that other developers don't have access to.
Is that fair? Is it legal? I don't know. If nothing else, I think Gabe Newell should roll one of his $30 million yachts up to the office and go "hey guys, what's going on over here?" before someone in the government does so for him.
Game Developer has reached out to Valve for comment on this story and will update it when a response is given.
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