Case 2:21-cv-00563-JCC Document 34 Filed 06/11/21 Page 1 of 100
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`HON. JOHN C. COUGHENOUR
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`UNITED STATES DISTRICT COURT
`FOR THE WESTERN DISTRICT OF WASHINGTON
`AT SEATTLE
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`Wolfire Games, LLC, Sean Colvin, Susann
`Davis, Daniel Escobar, William Herbert, Ryan
`Lally, Hope Marchionda, Everett Stephens,
`individually and on behalf of all others
`similarly situated,
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`Plaintiffs,
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`v.
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`Valve Corporation,
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`Defendant.
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` CASE NO. 2:21-CV-563
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`CONSOLIDATED AMENDED CLASS
`ACTION COMPLAINT
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`DEMAND FOR JURY TRIAL
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`CONSOLIDATED AMENDED CLASS ACTION COMPLAINT
`CASE NO. 2:21-CV-563
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`QUINN EMANUEL URQUHART & SULLIVAN
`1109 FIRST AVENUE, SUITE 210
`SEATTLE, WASHINGTON 98101
`TEL: (206) 905-7000
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`Case 2:21-cv-00563-JCC Document 34 Filed 06/11/21 Page 2 of 100
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`TABLE OF CONTENTS
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`OVERVIEW OF THE ACTION ....................................................................................................... 1
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`PARTIES ........................................................................................................................................... 6
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`JURISDICTION AND VENUE ........................................................................................................ 8
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`FACTUAL ALLEGATIONS ............................................................................................................ 9
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`I. Background ............................................................................................................................... 9
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`Valve—A PC Desktop Game Publisher Turned Gaming Platform Monopolist .............. 11
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`II. Relevant Markets ..................................................................................................................... 14
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`A.
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`B.
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`C.
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`The Distinctiveness of PC Desktop Games ...................................................................... 14
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`The Market for PC Desktop Gaming Platforms ............................................................... 20
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`The Market for PC Desktop Game Distribution ............................................................... 24
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`III. Valve Possesses Monopoly Power In The Relevant Markets .............................................. 29
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`A.
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`B.
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`The Steam Gaming Platform Is Dominant in the PC Desktop Gaming Platform Market 29
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`The Steam Store Is Dominant in the PC Desktop Game Distribution Market ................. 34
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`The Combined Steam Product Is Dominant in the Alternative PC Desktop Game
`C.
`Transaction Platform Market....................................................................................................... 35
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`IV.
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`Steam Has Unlawfully Monopolized the Relevant Markets ................................................ 36
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`Valve Has Tied the PC Desktop Gaming Platforms Market to the PC Desktop Game
`A.
`Distribution Market ..................................................................................................................... 36
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`1.
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`2.
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`The Steam Gaming Platform and the Steam Store Constitute Two Separate Products 37
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`Valve Coerces Publishers into Using the Steam Store ................................................. 42
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`Valve’s Tie Causes Anticompetitive Harm .................................................................. 45
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`B.
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`Valve Imposes the Valve PMFN on Publishers ............................................................... 48
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`1.
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`2.
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`3.
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`Valve Imposes the PMFN Through Written and Unwritten Rules ............................... 48
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`The Valve PMFN Suppresses Price Competition Across the Industry ......................... 54
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`The Valve PMFN Imposes Anticompetitive Harm ...................................................... 57
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`V. Attempts at Entry Into the Relevant Markets Have Failed because of Valve’s Anticompetitive
`Restraints ......................................................................................................................................... 60
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`A.
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`B.
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`Electronic Arts .................................................................................................................. 62
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`Discord .............................................................................................................................. 64
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`C. Microsoft, Amazon, Google ............................................................................................. 66
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`D.
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`Epic Game Store ............................................................................................................... 67
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`VI. Valve’s Anticompetitive Practices Directly Harm Both Game Publishers and Game
`Purchasers ........................................................................................................................................ 71
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`CLASS ACTION ALLEGATIONS ................................................................................................ 82
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`INTERSTATE TRADE AND COMMERCE ................................................................................. 85
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`CAUSES OF ACTION ................................................................................................................... 86
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`CONSOLIDATED AMENDED CLASS ACTION COMPLAINT
`CASE NO. CASE NO. 2:21-CV-563
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`QUINN EMANUEL URQUHART & SULLIVAN
`1109 FIRST AVENUE, SUITE 210
`SEATTLE, WASHINGTON 98101
`TEL: (206) 905-7000
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`Case 2:21-cv-00563-JCC Document 34 Filed 06/11/21 Page 3 of 100
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`PRAYER FOR RELIEF .................................................................................................................. 93
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`JURY DEMAND ............................................................................................................................ 94
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`CONSOLIDATED AMENDED CLASS ACTION COMPLAINT
`CASE NO. CASE NO. 2:21-CV-563
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`QUINN EMANUEL URQUHART & SULLIVAN
`1109 FIRST AVENUE, SUITE 210
`SEATTLE, WASHINGTON 98101
`TEL: (206) 905-7000
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`Case 2:21-cv-00563-JCC Document 34 Filed 06/11/21 Page 4 of 100
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`Plaintiffs Wolfire Games, LLC, Sean Colvin, Susann Davis, Daniel Escobar, William
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`Herbert, Ryan Lally, Hope Marchionda, and Everett Stephens (“Plaintiffs”) bring this action
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`against Valve Corporation under federal and state antitrust laws and state unfair competition laws,
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`seeking public injunctive relief and damages, and allege as follows:
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`OVERVIEW OF THE ACTION
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`1.
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`Video games are a vital part of American culture and industry. Many millions of
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`Americans play video games, creating hundreds of thousands of skilled jobs across the country
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`with a focus on computer science, artistry, and innovation. Personal Computer (“PC”) games, a
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`subset of video games, alone generate at least $30 billion worldwide annually. Of that sum,
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`approximately 75% flows through a single company, Defendant Valve Corporation (“Valve”).
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`2.
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`Valve’s online game store, the “Steam Store,” dominates the distribution of PC
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`games. And Valve uses its dominance over PC game distribution to impose a 30% commission on
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`nearly every sale made through its store. This commission far exceeds what would prevail in a
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`competitive market and yields Valve billions of dollars in annual profits. Valve’s bloated
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`commission makes games more expensive for consumers to buy, while suppressing sales volumes
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`and revenues for game publishers.1 And with Valve extracting so much revenue from its middle-
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`man role, quality and innovation in the industry suffer.
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`3.
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`Valve has been able to keep its commission fees at supracompetitive levels for
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`years by actively suppressing competition in order to protect its market dominance. Many other
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`game stores have tried to compete by charging lower fees to game publishers, in the range of 10-
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`15%, but they have all failed to achieve significant market share.
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`4.
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`Valve maintains its dominance and thwarts effective competition by engaging in
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`two separate but related anticompetitive acts. First, Valve ties together the use of its gaming
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`1 In the PC Desktop Game industry, the “developer” is typically the entity that creates the game
`while the entity that markets the game is typically referred to as the game “publisher.” Sometimes
`a single company undertakes both of these functions. While both terms are used throughout this
`Complaint interchangeably, the proposed class includes publishers as the entities that directly pay
`commissions to Valve.
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`CONSOLIDATED AMENDED CLASS ACTION COMPLAINT
`CASE NO. CASE NO. 2:21-CV-563
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`QUINN EMANUEL URQUHART & SULLIVAN
`1109 FIRST AVENUE, SUITE 210
`SEATTLE, WASHINGTON 98101
`TEL: (206) 905-7000
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`Case 2:21-cv-00563-JCC Document 34 Filed 06/11/21 Page 5 of 100
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`platform to its store, requiring game publishers to sell their games in Valve’s store if they want
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`access to the “Steam” Gaming Platform, which is Valve’s PC Desktop Gaming Platform.2
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`Second, Valve imposes a Platform Most-Favored-Nations Clause (the “Valve PMFN”) on game
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`publishers, which inhibits the ability of publishers to sell their games at lower prices to consumers
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`through rival storefronts. Together, these anticompetitive acts protect Valve’s dominance in the
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`relevant markets and ensure Valve can continue to collect its 30% tax on nearly every sale of
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`computer games in the United States.
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`5.
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`Valve’s tie works as follows. Valve knows that for PC games to succeed they
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`must, with rare exceptions, be compatible with the Steam Gaming Platform. The Steam Gaming
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`Platform provides a software environment where gamers can maintain their library of games,
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`connect with other gamers for social networking and multiplayer gaming, and access other
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`ancillary services like the tracking of gaming achievements. The Steam Gaming Platform is by far
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`the largest PC Desktop Gaming Platform in the United States (and the world), and PC game
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`publishers consider it essential for their games to be compatible with the Steam Gaming Platform
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`in order to reach the vast majority of their potential customers.
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`But if a game publisher wants to sell a game that is enabled for the Steam Gaming
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`Platform, Valve mandates by contract that the publisher list the game for sale in the Steam Store,
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`where it is subject to Valve’s 30% commission on nearly every sale.3 Game publishers have no
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`ability to avoid this arrangement by, for example, selling games enabled for the Steam Gaming
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`Platform only through other distributors. Valve prohibits that competitive option.
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`7.
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`To the extent Valve allows a publisher to make any sales of Steam-enabled games
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`through other storefronts at all, Valve polices such sales with a heavy hand, ensuring they do not
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`2 While gamers, publishers, and industry insiders sometimes colloquially refer to Steam as a
`single product, there are in fact two separate components to Steam—the Steam Gaming Platform
`(where games are played) and the Steam Store (where games are bought and sold).
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`3 Before October 1, 2018, Valve charged a 30% commission fee on all game sales. As of
`October 1, 2018, Valve has three tiers for its commission fee: 30% on all of a game’s earnings
`under $10 million; 25% on all of a game’s earnings between $10 million and $50 million; and
`20% on all of a game’s earnings over $50 million. The vast majority of sales to consumers
`through the Steam Store are at the 30% commission rate.
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`CONSOLIDATED AMENDED CLASS ACTION COMPLAINT
`CASE NO. CASE NO. 2:21-CV-563
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`QUINN EMANUEL URQUHART & SULLIVAN
`1109 FIRST AVENUE, SUITE 210
`SEATTLE, WASHINGTON 98101
`TEL: (206) 905-7000
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`Case 2:21-cv-00563-JCC Document 34 Filed 06/11/21 Page 6 of 100
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`constitute a threat to Valve’s dominance. For example, if Valve learns that a publisher is selling a
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`substantial number of Steam-enabled games through competing stores, Valve will threaten that
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`publisher with punishment which can include having their game removed from the Steam platform
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`entirely. Valve’s tie thus ensures that any publisher seeking access to the Steam Gaming Platform
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`must agree that the vast majority of its digital game sales will be through the Steam Store, where
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`Valve takes its 30% cut.
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`In addition, Valve uses its PMFN to control the prices of games sold in the Steam
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`Store and in other stores. Valve’s PMFN mandates that a game publisher cannot sell games that
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`are for sale in the Steam Store at lower prices in any other store, and Valve even applies that price-
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`parity restriction to game versions that are not enabled for the Steam Gaming Platform.
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`To illustrate how the PMFN works, consider a game publisher who develops a
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`game called “GAME ONE.” Given Valve’s dominance, that publisher will almost certainly need
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`to market a version of the game that is enabled for the Steam Gaming Platform in order for it to be
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`commercially viable. Pursuant to the tie, Valve then requires that the game be sold in the Steam
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`Store, where the publisher must set its price high enough to account for Valve’s 30% commission.
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`Valve might allow the publisher to sell a small volume of Steam-enabled games outside of the
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`Steam Store, but requires that they be sold at prices higher or equal to the Steam Store price.
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`And it does not stop there. Suppose the game publisher also develops a version of
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`GAME ONE that is not enabled for the Steam Gaming Platform and will not be sold in the Steam
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`Store. Valve interprets its PMFN to mandate that the publisher cannot sell that version in other
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`stores for a cheaper price, even when the competing store has a much lower commission. Valve
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`thus prevents the game publisher from selling at a lower price on the alternative store, even when
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`the publisher profitably could do so, and thus effectively blocks all price competition.
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`As explained by the founder and CEO of Epic Games (“Epic”), one company that
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`has tried to compete against Valve, “Steam has veto power over prices, so if a multi-store
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`CONSOLIDATED AMENDED CLASS ACTION COMPLAINT
`CASE NO. CASE NO. 2:21-CV-563
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`QUINN EMANUEL URQUHART & SULLIVAN
`1109 FIRST AVENUE, SUITE 210
`SEATTLE, WASHINGTON 98101
`TEL: (206) 905-7000
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`Case 2:21-cv-00563-JCC Document 34 Filed 06/11/21 Page 7 of 100
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`developer wishes to sell their game for a lower price on the Epic Games store than Steam, then: 1)
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`Valve can simply say ‘no.’”4
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`Valve makes game publishers agree to the PMFN as a requirement to access the
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`Steam Gaming Platform. Valve explicitly requires that publishers agree that games sold elsewhere
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`must be sold “in a similar way to how you sell your game on Steam.”5 And Valve interprets this
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`language to encompass price parity, forcing game publishers to charge the inflated Steam Store
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`price across the marketplace, on all game sales, even sales of games that are not enabled for the
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`Steam Gaming Platform.
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`Valve’s PMFN harms the entire industry by removing the ability of competitive
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`forces to drive lower commissions and lower prices. Absent Valve’s PMFN, competitive forces
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`would put downward pressure on Valve’s bloated 30% commission when game publishers sold
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`games for less on stores that charge lower commissions. Those competitive pressures would force
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`Valve to lower its commission in an effort to compete on price with its rivals. That would
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`promote competition and lead to overall lower prices, benefiting game publishers and consumers
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`alike. But Valve’s anticompetitive PMFN blocks these benefits from occurring.
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`Because of Valve’s tie and its PMFN, other competing game stores cannot drive
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`volume to their stores by charging lower commissions, as Valve prevents game publishers from
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`selling their games for less on those stores. While several game stores have tried to compete with
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`Valve by charging lower commissions, those efforts have failed to make a dent in the Steam
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`Store’s market share because publishers using those distributors had to charge the same inflated
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`prices they set on the Steam Store.
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`Similarly, publishers cannot discipline Valve’s excessive commissions by steering
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`gamers to lower-commission storefronts with lower retail prices. Thus, publishers reluctantly
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`4 Tim Sweeney (@TimSweeneyEpic), Twitter (Jan. 30, 2019, 9:29 AM),
`https://twitter.com/timsweeneyepic/status/1090663312814157824?lang=en.
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`5 Steamworks Documentation, Steam Key Rules and Guidelines,
`https://partner.steamgames.com/doc/features/keys.
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`CONSOLIDATED AMENDED CLASS ACTION COMPLAINT
`CASE NO. CASE NO. 2:21-CV-563
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`QUINN EMANUEL URQUHART & SULLIVAN
`1109 FIRST AVENUE, SUITE 210
`SEATTLE, WASHINGTON 98101
`TEL: (206) 905-7000
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`Case 2:21-cv-00563-JCC Document 34 Filed 06/11/21 Page 8 of 100
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`market their games primarily through the dominant Steam Store where, year after year, Valve
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`continues to take its 30% fee on nearly every sale. No wonder that a former Valve employee
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`described the Steam Store as a “virtual printing press” that imposes a “30% tax on an entire
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`industry.”6
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`Relatedly, Valve also mandates that publishers use its “Steam Wallet” for any in-
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`game purchases. Specifically, Valve requires that: “For any in-game purchases, you’ll need to use
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`the microtransaction API so Steam customers can only make purchases from the Steam Wallet.”
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`When publishers comply and use Valve’s microtransaction system, they again must pay Valve’s
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`30% supracompetitive commission.
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`17.
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`Valve’s anticompetitive scheme has been wildly successful. It has cemented
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`Valve’s dominance and its ability to extract supracompetitive profits, with no end in sight.
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`Innovation is the engine of the video game industry, but Valve’s imposition of its
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`supracompetitive tax suppresses innovation and output across the industry while elevating the
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`prices of PC Desktop Games. Forced to pay Valve’s exorbitant tax, game publishers have fewer
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`resources to invest in creating new games and must charge higher prices than they would in a
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`competitive market.
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`The global market for PC Desktop Games is worth approximately $30 billion
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`annually, about $20 billion of which is revenue from in-app purchases made primarily in “free to
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`play” games and $10 billion of which is revenue from upfront purchases. With the Steam Store’s
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`75% share, that means approximately $7.5 billion in upfront sales occur through the Steam Store
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`per year, and Valve receives about $2 billion or more per year from Steam Store commissions
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`largely just for serving as a middleman between publishers and gamers. With roughly 350
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`employees, Valve’s per-employee profit from the storefront alone is over $5 million, making
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`Valve, by that metric, one of the most profitable companies in the world.7
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`6 Andrew McMahon, Former Valve Employee Says Steam Was Killing PC Gaming, Epic Games
`Is Saving It, TWINFINITE (Apr. 8, 2019), https://twinfinite.net/2019/04/former-valve-employee-
`says-steam-was-killing-pc-gaming-epic-games-is-saving-it/.
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`7 As a private corporation, Valve does not make its financial statements publicly available.
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`CONSOLIDATED AMENDED CLASS ACTION COMPLAINT
`CASE NO. CASE NO. 2:21-CV-563
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`QUINN EMANUEL URQUHART & SULLIVAN
`1109 FIRST AVENUE, SUITE 210
`SEATTLE, WASHINGTON 98101
`TEL: (206) 905-7000
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`Case 2:21-cv-00563-JCC Document 34 Filed 06/11/21 Page 9 of 100
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`19.
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`These are astonishing figures for Valve’s limited middleman role, and these
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`sustained inflated profits reflect that competition is not working as it should. Meanwhile, Valve
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`devotes only a small percentage of its revenue to maintaining and improving the Steam Store, and
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`dedicates very few employees to that effort.
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`Ultimately, the only way for game publishers to avoid Valve’s anticompetitive
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`scheme is to avoid the Steam Gaming Platform altogether, and not sign any agreements or
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`contracts with Valve. But time and time again, when publishers or other market participants have
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`tried to create or utilize alternative PC Desktop Gaming Platforms, they have failed to obtain
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`sufficient scale to challenge Valve because of Valve’s dominance and anticompetitive restraints.
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`These failed efforts include some by the most sophisticated and largest gaming and technology
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`companies in the world, such as Electronic Arts (“EA”), Microsoft, Amazon, and Epic.
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`The failure of these deep-pocketed companies to challenge Valve in this space
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`demonstrates that Valve’s monopoly power in both the PC Desktop Gaming Platform (through the
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`Steam Gaming Platform) and PC Desktop Game Distribution (through the Steam Store) markets is
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`durable and virtually impossible to overcome given the conduct challenged in this action.
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`At bottom, Valve’s scheme imposes a bloated tax on the PC Desktop Gaming
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`industry. Valve forces game publishers to use the Steam Store and give Valve 30% of nearly
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`every sale if they want to gain access to the Steam Gaming Platform—access they need in order to
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`sell their games. In order to afford Valve’s 30% commission, game publishers must charge higher
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`20
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`prices to consumers and have fewer resources for innovation and creation. Game quality and
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`choice suffers as a result, and gamers are injured by paying higher retail prices for fewer and
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`22
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`lower-quality games. Competition, output, and innovation are suppressed, in ways that can never
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`23
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`be fully redressed by damages alone. Thus, in addition to damages, injunctive relief removing
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`24
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`Valve’s anticompetitive provisions is necessary to bring competition to the market and benefit the
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`25
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`public as a whole.
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`26
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`27
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`23.
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`Defendant Valve Corporation is a Washington Corporation with a principal place
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`PARTIES
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`28
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`of business at 10400 NE 4th ST, Suite 1400, Bellevue, Washington, 98004-5174. Valve, an
`
`
`
`CONSOLIDATED AMENDED CLASS ACTION COMPLAINT
`CASE NO. CASE NO. 2:21-CV-563
`
`6
`
`
`
`
`
`QUINN EMANUEL URQUHART & SULLIVAN
`1109 FIRST AVENUE, SUITE 210
`SEATTLE, WASHINGTON 98101
`TEL: (206) 905-7000
`
`
`
`

`

`
`
`Case 2:21-cv-00563-JCC Document 34 Filed 06/11/21 Page 10 of 100
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`1
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`American video game developer, publisher, and digital distribution company, operates a PC
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`Desktop Gaming Platform (the “Steam Gaming Platform”) and a PC Desktop Game Distributor
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`(the “Steam Store”). As discussed herein, the Steam Store imposes an anticompetitive
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`4
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`commission of 30% on nearly every computer game sold.
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`5
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`24.
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`Plaintiff Wolfire Games, LLC (“Wolfire Games”) is a video game publisher
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`6
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`headquartered in San Francisco, California. Wolfire Games has entered into Steam Distribution
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`Agreements with Valve to make Wolfire Games’ PC Desktop Games compatible with the Steam
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`8
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`Gaming Platform, and to sell its PC Desktop Games through the Steam Store. As a result of
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`9
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`Defendant’s anticompetitive practices, Wolfire Games has paid supracompetitive commissions to
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`Valve for each sale of its PC Desktop Games through the Steam Store.
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`11
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`25.
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`Plaintiff William Herbert is a resident of Florida. Mr. Herbert has purchased PC
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`12
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`Desktop Games through the Steam Store. As a result of Defendant’s anticompetitive practices,
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`13
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`Mr. Herbert has paid supracompetitive prices for PC Desktop Games.
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`14
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`26.
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`Plaintiff Sean Colvin is a resident of Carlsbad, California. Mr. Colvin has
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`15
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`purchased PC Desktop Games through the Steam Store. As a result of Defendant’s
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`16
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`anticompetitive practices, Mr. Colvin has paid supracompetitive prices for PC Desktop Games.
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`17
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`27.
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`Plaintiff Susann Davis is a resident of Bowling Green, Kentucky. Ms. Davis has not
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`18
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`agreed to the Steam Subscriber Agreement. Ms. Davis has purchased PC Desktop Games through
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`19
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`the Steam Store for her minor child, who has his own Steam account. As a result of Defendant’s
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`20
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`anticompetitive practices, Ms. Davis has paid supracompetitive prices for PC Desktop Games.
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`28.
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`Plaintiff Daniel Escobar is a resident of New York, New York. Mr. Escobar has
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`22
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`purchased PC Desktop Games through the Steam Store. As a result of Defendant’s
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`23
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`anticompetitive practices, Mr. Escobar has paid supracompetitive prices for PC Desktop Games.
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`24
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`29.
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`Plaintiff Ryan Lally is a resident of San Diego, California. Mr. Lally has purchased
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`25
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`PC Desktop Games through the Steam Store. As a result of Defendant’s anticompetitive practices,
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`26
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`Mr. Lally has paid supracompetitive prices for PC Desktop Games.
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`27
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`30.
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`Plaintiff Hope Marchionda is a resident of Bowling Green, Kentucky. Ms.
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`28
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`Marchionda has not agreed to the Steam Subscriber Agreement. Ms. Marchionda has purchased
`
`
`
`CONSOLIDATED AMENDED CLASS ACTION COMPLAINT
`CASE NO. CASE NO. 2:21-CV-563
`
`7
`
`
`
`
`
`QUINN EMANUEL URQUHART & SULLIVAN
`1109 FIRST AVENUE, SUITE 210
`SEATTLE, WASHINGTON 98101
`TEL: (206) 905-7000
`
`
`
`

`

`
`
`Case 2:21-cv-00563-JCC Document 34 Filed 06/11/21 Page 11 of 100
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`1
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`PC Desktop Games through the Steam Store for her minor child, who has his own Steam account.
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`2
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`As a result of Defendant’s anticompetitive practices, Ms. Marchionda has paid supracompetitive
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`3
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`prices for PC Desktop Games.
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`4
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`31.
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`Plaintiff Everett Stephens is a resident of Cincinnati, Ohio. Mr. Stephens has
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`5
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`purchased PC Desktop Games through the Steam Store. As a result of Defendant’s
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`6
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`anticompetitive practices, Mr. Stephens has paid supracompetitive prices for PC Desktop Games.
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`JURISDICTION AND VENUE
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`32.
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`Plaintiffs bring this action under Sections 4 and 16 of the Clayton Act, 15 U.S.C.
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`§§ 15 and 26, to recover treble damages and costs of suit, including reasonable attorneys’ fees,
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`10
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`against Valve for the injuries to Plaintiffs and the Class, alleged herein, arising from Valve’s
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`violations of Section 2 of the Sherman Act, 15 U.S.C. § 2, and Section 1 of the Sherman Act, 15
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`12
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`U.S.C. § 1. Plaintiffs also assert claims under Washington’s Consumer Protection Act, RCW
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`13
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`19.86, seeking treble damages and injunctive relief under RCW 19.86.090.
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`14
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`33.
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`The Court has subject matter jurisdiction over this action pursuant to Sections 4 and
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`16 of the Clayton Act, 15 U.S.C. §§ 15(a) and 26, as well as pursuant to 28 U.S.C. §§ 1331 and
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`1337(a). The Court has supplemental jurisdiction over Plaintiffs’ state law claims pursuant to 28
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`U.S.C. § 1367.
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`34.
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`This Court has personal jurisdiction over Valve because Valve’s headquarters are
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`19
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`located in Bellevue, Washington. Valve has engaged in sufficient minimum contacts with the
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`United States and has purposefully availed itself of the benefits and protections of both United
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`States and Washington law such that the exercise of jurisdiction over Valve would comport with
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`22
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`due process.
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`35.
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`Valve also is subject to personal jurisdiction because, either directly or through its
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`24
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`agents or affiliates, Valve transacted business throughout the United States, including in this
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`25
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`District, that was directly related to the claims at issue in this action.
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`26
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`36.
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`Additionally, the Court has jurisdiction over Valve because its principal place of
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`27
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`business is in Washington State.
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`28
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`
`
`CONSOLIDATED AMENDED CLASS ACTION COMPLAINT
`CASE NO. CASE NO. 2:21-CV-563
`
`8
`
`
`
`
`
`QUINN EMANUEL URQUHART & SULLIVAN
`1109 FIRST AVENUE, SUITE 210
`SEATTLE, WASHINGTON 98101
`TEL: (206) 905-7000
`
`
`
`

`

`
`
`Case 2:21-cv-00563-JCC Document 34 Filed 06/11/21 Page 12 of 100
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`1
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`37.
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`Venue is proper in this District pursuant to 15 U.S.C. §§ 15(a) and 22 because
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`2
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`Valve is found in and transacts business in this District.
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`3
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`38.
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`Venue also is proper pursuant to 28 U.S.C. § 1391(b), (c), and (d) because, during
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`4
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`the relevant period, Valve resided, transacted business, was found, or had agents in this District; a
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`5
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`substantial part of the events or omissions giving rise to these claims occurred in this District; and
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`6
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`a substantial portion of the affected interstate trade and commerce discussed herein was carried out
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`7
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`in this District.
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`FACTUAL ALLEGATIONS
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`9
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`I.
`
`BACKGROUND
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`10
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`39.
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`A video game is an electronic game that can be played on a computing device, such
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`11
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`as a PC, gaming console, smartphone, or tablet. As of 2021, there are roughly 3 billion video
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`12
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`game players worldwide.
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`13
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`40.
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`Video games are subcategorized by the type of device on which gamers play them,
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`14
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`including computer games (e.g., PC games), console games (e.g., PlayStation or Xbox games),
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`15
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`and mobile games (e.g., games played primarily on smartphones or tablets). Any game developed
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`16
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`for a particular type of device will only work for that type of device (e.g., a PC game will work
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`17
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`only on a PC), and, as detailed below, different versions of PC games are often also created for
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`18
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`specific PC Desktop Gaming Platforms, like the Steam Gaming Platform.
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`19
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`41.
`
`PC Desktop Games are video games that are downloaded and installed onto a PC
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`20
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`device. Although such games vary in size, scope, type, and features, they all involve the ability to
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`21
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`load the game directly from the user’s computer and then allow the user to play the game from that
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`22
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`computer. All require installation on the user’s PC to work, and all save data on the user’s PC,
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`23
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`both for the purposes of running the game, as well as for saving game progress or preferences
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`24
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`(such as control schemes, sound and video preferences, etc.).
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`42.
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`PC Desktop Games are almost as old as PCs themselves. PCs first came to
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`26
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`prominence in the 1980s and, at that time, numerous game publishers released games for this new
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`27
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`type of computing device. As PCs’ popularity grew, so, too, did the popularity of PC Desktop
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`28
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`
`
`CONSOLIDATED AMENDED CLASS ACTION COMPLAINT
`CASE NO. CASE NO. 2:21-CV-563
`
`9
`
`
`
`
`
`QUINN EMANUEL URQUHART & SULLIVAN
`1109 FIRST AVENUE, SUITE 210
`SEATTLE, WASHINGTON 98101
`TEL: (206) 905-7000
`
`
`
`

`

`
`
`Case 2:21-cv-00563-JCC Document 34 Filed 06/11/21 Page 13 of 100
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`1
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`Games. In 2020, the revenue from the worldwide PC Desktop Gaming Market was at least $30
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`2
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`billion.
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`3
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`43.
`
`For most of the history of the PC Desktop Game industry, due to technology
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`4
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`limitations, gamers purchased most PC Desktop Games at brick-and-mortar locations. When
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`5
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`users purchased such games, they received physical media, such as a CD-ROM, that could be
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`6
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`brought home and installed on their computers.
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`7
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`44.
`
`As technology improved, digital distribution slowly took hold beginning in the
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`8
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`1980s and 1990s. One of the first examples came in 1983 with the GameLine service for the Atari
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`9
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`2600, developed by Control Video Corporation (“CVC”). GameLine allowed users to rent and
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`10
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`download games over telephone lines. CVC gradually expanded the services it provided and
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`11
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`became America Online (“AOL”) in 1991.
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`12
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`45.
`
`AOL launched with a number of games, including Neverwinter Nights, an online
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`multiplayer game based on Dungeons & Dragons. Thousands of p