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Emails from 2017 and 2018 show Epic Games CEO Tim Sweeney arguing that Steam’s standard 30% starting fee was too high for a mature PC games store—and objecting that Valve’s biggest developers could receive lower rates while smaller studios paid the standard one. The messages were disclosed in Wolfire Games’ case against Valve; Epic was not directly involved in the legal arguments, according to Ars Technica’s March 14, 2024 report.
What did Sweeney object to about Steam’s fee?
Sweeney’s complaint had two parts: the size of Steam’s standard commission and the difference between the terms he said Valve offered to the largest developers and those facing smaller ones.
In an August 2017 email exchange, Valve co-founder Gabe Newell asked Sweeney whether Valve was doing anything to annoy him. Sweeney replied that Steam’s 30% fee had “a good case” in the platform’s early days, but, in his view, was no longer justified by a store operating at Steam’s scale with lower distribution costs.
His criticism therefore was not simply that a store took a share of game sales. He argued that the economics of digital distribution had changed and that a uniform starting rate did not reflect those changes. Those are Sweeney’s arguments as reported from email excerpts, not a court’s finding about what Steam’s services cost or what commission was fair.
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How did Sweeney calculate the developer’s remaining share?
In the email excerpt, Sweeney set out an illustrative breakdown of revenue deductions: 30% for distribution, 30% for marketing or user acquisition, 10% for servers, and 5% for the game engine. He concluded that 25% remained for creating the game.
- 30% distribution: the store fee in the calculation.
- 30% marketing or user acquisition: Sweeney’s estimate of another cost developers might face.
- 10% servers and 5% engine: further allocations in his example.
- 25% for creation: the remainder in his arithmetic.
These percentages describe Sweeney’s email calculation; Ars does not establish them as audited figures or universal costs for game developers. A developer’s actual economics can differ with its marketing strategy, server needs, engine terms, sales mix, and store arrangements.
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What did he say about distribution costs and Epic’s store?
Sweeney estimated that distribution for PC games priced at $25 or more in Western markets cost “under 7% of gross,” drawing on his experience with Fortnite and Paragon, according to Ars. That was his estimate, not an independent cost study or a verified industry-wide rate.
Ars compared that estimate with the Epic Games Store’s reported 12% take. The figures are not a complete like-for-like accounting of storefront economics: a commission rate alone does not measure the value or cost of a store’s reach and services, and Sweeney’s estimate does not independently quantify those factors.
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In November and December 2018, Sweeney gave Valve advance notice of Epic Games Store’s planned launch and said lower Steam fees could show that competition between stores benefited developers. On December 3, he criticized what he described as Valve offering lower rates to its largest developers while smaller developers remained at 30%.
He wrote: “Right now, you assholes are telling the world that the strong and powerful get special terms, while 30% is for the little people.” Ars reported that Valve’s Erik Johnson forwarded the message to COO Scott Lynch, who replied: “You mad bro?”
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Sweeney also argued that a broad reduction in Steam’s fees would demonstrate the benefits of store competition. As Ars quoted his email: “A timely move by Valve to improve Steam economics for all developers would make a great difference in all of this, clearly demonstrating that store competition leads to better rates for all developers. Epic would gladly speak in support of such a move anytime!”
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What do the emails establish—and what do they not?
The messages document Sweeney’s views and his direct appeal to Valve leaders; they do not prove his financial assumptions or resolve whether Steam’s commission was excessive. Ars also quoted Sweeney’s speculation that, “If you subtract out the top 25 games on Steam, I bet Valve made more profit from most of the next 1,000 than the developer themselves made.” That was his conjecture, not a verified profit comparison.
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The emails surfaced in Wolfire Games’ price-fixing case against Valve. Ars said Epic was not directly involved in those legal arguments. The report describes disclosed case materials, some of which were redacted; it does not report a court finding endorsing Sweeney’s cost estimates or his criticism of Valve’s fee structure.
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