Why is there a 15% take in the Market?

[S]

At first glance, this is a wholly reasonable task. I never thought anything of it until something dawned on me...

...do they actually make money off of doing it? If so... how? Let's... let's make a scenario, for simplicity.

You pop open Steam and want to allot a dollar to your wallet. You hand Steam your dollar and say "I want this on my Steam account." They take your dollar and allot your account said dollar. However... they now own 100% of that dollar. That dollar is no longer your dollar, but theirs. You go to the market and buy - I dunno - a chest or something for one dollar, and the seller gets 85 cents due to the 15% takeaway by Steam.

I don't get it. Why take 15% if... you already own 100% of the dollar. To say that taking that 15% to add to their profits directly would be wrong, since they can't magic 15 cents into existence out of nothing, and the money you spent to get that dollar to give to the listing player through purchase is already theirs.

To elucidate something, it doesn't bother me, but I'm wonderfully curious.

[Lostedge]

Because they can.

Also you could play with the market more if there was no transaction fee. It would make buying everything that is below average profitable. Now you need to buy 30% below average price to make profit using market.

[S]

Originally posted by Lostedge:

Because they can.

Of course they can. I breathe because I can, but I also do it to survive. We do a lot of this because we are capable of doing them, but our reason for doing them is something else entirely.

[S]

Originally posted by lucymai♥:

It stops people from abusing the system. Hypothetically if there was no fee, you could buy marketplace items that were below average and resell them at the average price instantaneously. Think about how detrimental this would be when bots start to automate these transactions and generate massive profits.

An interesting thought, but we already have automated systems for people to trade stocks, commodities, and currencies in the ForEx. Even still, a 15% cut isn't going to dent anyone's drawers. Sure, it'll add up, but since it's already in place, people will likely be buying low, selling high anyway.

[ KARR™]

Originally posted by Brommith:

At first glance, this is a wholly reasonable task. I never thought anything of it until something dawned on me...

...do they actually make money off of doing it? If so... how? Let's... let's make a scenario, for simplicity.

they can't magic 15 cents into existence out of nothing, and the money you spent to get that dollar to give to the listing player through purchase is already theirs.

To elucidate something, it doesn't bother me, but I'm wonderfully curious.

They do make money. Money isn't made out of thin air, it all comes from Steam customers.

Eg:

Fred charges his steam wallet by £10. Valve currently have money in their account making interest. But as of yet they don't "own" it, it is Freds until he spends it.

Steve sells a card in the market for £1 to Fred. Steve now has £0.85p in his wallet (his 85%), Fred now has £9.00, the remaining 0.15p (15% charge) has gone to Valve.

Don't forget that when you sell a card you only get 85% of what you sell it for. The more times a card sells, the more 15% that Valve can get. If the same card sells 10 times for £1 each, valve would make £1.50 in total. Times that by 4 million people...... it's pure profit!

[AutoCept]

Sort of what KARR said. You seem to be under the impression that the dollar no longer has value when you add it to your wallet, this is not true. That dollar can be spent (traded) to buy a game, which has a fixed value. That's all any monetary system is, trading something that represents a fixed value for something of another value.

In this case the value of your dollar is backed by the U.S. government (Or whatever government if you live somewhere else, I guess. I don't know), since you could spend your dollar to buy a game, or to put it into the steam wallet and buy a game for the same value, your steam wallet has the same value as a U.S. dollar. It just has a more limited range of items you can buy with it.

Steam makes money off your transactions because you are taking a portion of your money and then using it to pay them rather than buy a game. (They make money off of games too of course, but a large portion of it goes to the developer/publisher.) By doing so instead of paying say, 50 dollars for a game, and steam getting a % of that. You're now paying 50 dollars for a game + transaction fees on whatever you buy on the market.

Now, if you're wondering why you should HAVE to pay them a transaction fee in the first place, servers aren't cheap. Also for things like trading cards I believe a portion of that 15% goes to the developer/publisher (who spends the time and effort making those fancy little wallpapers and content you get for crafting a badge).

So yeah, that's basicly it.

[_wilco]

You have to think further than one transaction.

Without the fee:
User A buys a card for 1$ from User B and B gets the 1$. B buys a card from C for 1$ and C gets 1$. C buys.. etc. So this 1$, User A put into his wallet, belongs to Valve.

With the fee:
User A buys a card for 1$ from User B and B gets 0.85$. B has not enough money in his wallet to get C's card for 1$, so loads his Wallet with another dollar (because there's a minimum). This means 2 Users put money (1$ each) into their wallet, which now belongs to Valve. This process can continue countless times.

The (hypothetical) result:
In the first scenario, Valve gets 1$ from an unlimited amount of transactions. But in the second scenario, Valve gets 1$ per transaction. So they do indeed make a profit by taking an additional fee, even though the initial money already belongs to them.

[CloudGT4]

Technically the full $1 doesn't belong to them right? Its on my wallet, I buy a $1 card, and the seller gets 85cents and steam only gets 15cents.. so in reallity for steam to get the full 1$ that exact dollar has to be used 6 or 7 times over?

[old fat guy in underwear]

If Valve owns the dollar just by adding money to your account... what exactly did you spend it on to make it theirs? Also, if it's theirs, why do you get to spend it after you give it to them?

[aiusepsi]

The way I like to think about it is in terms of sources and sinks. Imagine that all the Steam wallets in the world are a bit like a bathtub with water in it.

Adding money to your Steam wallet is a bit like turning on a tap. Say you add $1 to your wallet; you're putting $1 of water into the bath. Then there are sinks of money in the system, a bit like the drain in the bath. When you buy a game for, say, $5, then $5 is drained from the bath and some of it goes to the game publisher/developer, and some to Valve for their take. Similar principle with marketplace fees: Valve drain their 15% take from the bath, although the remainder stays in the bath in this case.

The sum of water (money) in the bath is held in trust by Valve in a bank account somewhere, but they can't count it as revenue until it's drained by a mechanism like the marketplace fee.

[Satoru]

Transaction fees are done for various reason

1) Ensures that users cannot directly exploit arbitage in the market. Since you always have to over come a specific % to be profitable

2) Gives an incentive for other developers to create content for their games, since they receive a % of proceeds from the Market

[Kuro]

Originally posted by lucymai♥:

It stops people from abusing the system. Hypothetically if there was no fee, you could buy marketplace items that were below average and resell them at the average price instantaneously. Think about how detrimental this would be when bots start to automate these transactions and generate massive profits.

On the other hands though, Valve now has no incentive to take serious measures against bots since they actually make a decent profit off them.

[Kargor]

Just look at what the "wallet" actually is.

If you put $100 into it, then yes -- Steam has $100. The thing with these $100, however, is that you can use them to buy games -- and when you do, Steam has to pay the publisher. So if you spend all those $100 on games, Steam will end up having only their usual sales-cut (no idea what that is -- 30%?), same as if you had not used the wallet at all (ignoring payment-provider fees here -- if you put $100 into your wallet, chances are the fees are lower than if you bought 10 games for $10 each, all in separate transactions).

However, in the case of market transactions, Steam simply reduces the amount of "wallet money" that's floating around: you can no longer use it to buy games, but Steam got 100% of what they took out of your wallet because they don't have to pay a publisher for your market transactions.

In other words: if you pay $10 for a game, Steam might end up having $3 (no idea what their share is). If you spend $10 on market transactions it may be the same to you, but Steam gets $10.

[Satoru]

@Kargor

Industry standards for digital store margins is 30% (Apple set this prescendent and most other stores have followed)

Only the Humble store charges something reduclously small, like 5% or such.

I always try to purchase indie games that give out Steam keys via the Humble Store, or their Humble Widget so that the devs get more money.

[mayonnaise]

I'm pretty sure it's just so Steam can make some profit on stuff.

[Drago]

Yes good