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Steam's new 'Community Market' could mean new revenue opportunities
Steam's new 'Community Market' could mean new revenue opportunities
December 12, 2012 | By Frank Cifaldi

Valve is opening up a new revenue stream on its popular Steam service by allowing its players to buy and sell virtual goods.

The Steam Community Market began a beta period on Wednesday, currently applicable only to Valve's premiere free-to-play game, Team Fortress 2.

What does this mean for game developers? Potentially, a new source of revenue. While Valve will pocket 5% of the revenue from these virtual sales (to recoup "nominal fraud incidents"), the company says there is also an additional game-specific fee for each transaction, which is determined and collected by the individual game's publisher. Currently that fee is 10 percent for Team Fortress 2.

More information at the official FAQ.

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Jesse Tucker
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Edit: Thanks for the correction!

Frank Cifaldi
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Thanks for providing it! I could swear the FAQ was just as I'd reported it here, maybe Valve corrected it?

Kyle Redd
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This is a little confusing to me: As I understand it, most (or all) of the TF2 items that were once bought by players from Valve can now be bought from other players as well. As near as I can tell, the cost to purchase these items on the community market is far less than what you would pay if you bought directly from Valve.

Valve takes a cut of all of the purchases, but how is this not a money-losing proposition for them? Instead of taking 100% of the price they set for the items before, now they're only taking 15% (5% store fee plus 10% TF2 fee) of a drastically reduced price set by the players.

Am I missing something? Doesn't seem to make much financial sense for them.

Lewis Wakeford
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There are some items that can only be acquired by random chance, so the only way to guarantee that you get one is to buy them from other players. This was already happening anyway, I guess they just decided it was better to create a controlled environment for it (and take a cut).

I've heard of rare TF2 hats being sold for $100+ so people REALLY want these things.

Daneel Filimonov
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Only certain items (and even then, only after 3 days after purchase from the in-game store) are marketable. I'm guessing this is simply cashing in on those who have many items to sell, whom are selling to those that don't have enough money to buy the items at full price. In this case the items are restricted to tools and consumables (which are mostly pretty cheap) and are quite in abundance. This will probably change in the future according to the feedback of this market. Of course, players can choose to simply trade but the thought of getting real money from an in-game item is probably more pleasing to the "vendor" (person selling the item) than simply trading the item for another item. Thus, Valve gets a small cut, and the buyer gets their item for a fraction of the full price. Everybody wins!

Maria Jayne
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I think you have to see it more as a long term feature. It may lose some income from players undercutting Valve on the sale of items right now, but those items have already been sold and now they're going to get a further 15% cut of the resale.

Also I see TF2 as a live demonstration of the technology behind steam centric auction houses. Other developers can see how it works and include it in their future releases. So presumably once other developers adopt it Valve will more than recoup any losses they might make in future sales of TF2 hats and gizmos.

This is not forgetting TF2 is a great free game that already sold plenty of boxes of the retail and digital version before it went free to play, which requires Steam and is essentially now a free marketing tool for their digital store that has already recouped and profited on it's original creation costs.

Kyle Redd
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I guess I can see they would have reasons. It just feels so odd to see the same item listed for dramatically different prices at what is essentially the same store. I suppose Valve has already considered all of this ahead of time, though.

Ian Morrison
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I suspect at this point "making money" isn't really the point of TF2, just a happy side effect. Valve is rolling in dough right now from operating the biggest digital distribution channel on the planet, they're not under any financial pressure to maximize their income from a game that they've already made their money back on by several orders of magnitude.

I'm willing to bet that they view it almost exclusively as a live test bed for them to try out different monetization ideas and get hard player data using a game that's already a known quantity. Instead of fumbling around in the dark, they can answer questions like "how would a successful retail game like TF2 do if we went to F2P with a hat-based economy?" or "what happens when we give player's a cut of the microtransaction pie to crowdsource new items?" without having to bet their company's future on the answers. Other developers should be watching closely... while no doubt Valve is going to be the prime beneficiary of this sort of mad social science, there's got to be a lot other companies can glean from their approach.

Maurício Gomes
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Ian Morrison is right.

There is actually a older article here on Gama (that I failed to find) where Valve state explicitly that TF2 is their laboratory, both for tech, and business ideas.