The War for PC Gaming
Imagine two of the most influential companies in PC gaming. One created Fortnite, Unreal Engine, and the Epic Games Store. The other created Half-Life, Portal, Counter-Strike, and the platform that millions of PC gamers use every single day: Steam.
Now imagine the leaders of these companies disagreeing about just about everything.
We’re talking about Tim Sweeney, the outspoken CEO of Epic Games, and Gabe Newell, the famously private co-founder of Valve.
On one side, you’ve got Sweeney arguing that Steam takes too much money from developers, controls too much of the PC gaming marketplace, and makes it difficult for competitors to succeed. On the other side, you’ve got Valve, a company that has built one of the most successful gaming platforms in history and doesn’t appear particularly interested in changing its business model just because Epic says it should.
And while Gabe Newell generally stays out of the public arguments, Tim Sweeney has been more than willing to take his complaints directly to Valve — and occasionally make things personal. We’ve had angry emails, accusations about monopolistic behavior, exclusive games, storefront competition, AI disclosure policies, and even a few jokes about expensive yachts.
So, is this simply a business disagreement? Is Tim Sweeney trying to make PC gaming better? Or is Epic frustrated that Steam continues to dominate the marketplace?
PART 1 — WHO ARE TIM SWEENEY AND GABE NEWELL?
Before we get into the drama, let’s talk about the two people involved.
First, there’s Tim Sweeney. Sweeney founded Epic Games in 1991. The company initially operated under the name Potomac Computer Systems before becoming Epic MegaGames. Epic eventually became one of the most important companies in the gaming industry.
It developed games like Unreal, Unreal Tournament, and eventually Fortnite. But perhaps its biggest contribution to the industry is Unreal Engine. Unreal Engine is used by game developers around the world, from independent studios to major publishers.
And then there’s Gabe Newell.
Newell co-founded Valve in 1996 after leaving Microsoft. Valve would go on to create some of the most influential PC games ever made, including Half-Life, Counter-Strike, Portal, and Left 4 Dead. But Valve’s biggest business success might not be any individual game.
It’s Steam.
Launched in 2003, Steam gradually became the dominant digital storefront for PC gaming. Today, Steam is much more than a place to purchase games. It’s a social network, a community platform, a game library, a modding destination, and an ecosystem with achievements, cloud saves, forums, reviews, and multiplayer services.
And that’s important because the disagreement between Sweeney and Newell isn’t just about games. It’s about the platforms that distribute them.
If there’s one issue that sits at the center of this rivalry, it’s the famous 30% platform fee.
For many years, Steam’s standard revenue split meant that Valve received 30% of a game’s sales, while the developer or publisher received the remaining 70%, before other costs and contractual arrangements.
Now, from Valve’s perspective, Steam provides a tremendous amount of value. It handles distribution, payments, downloads, updates, community features, customer infrastructure, and access to a massive audience.
For developers, being on Steam can mean reaching millions of potential customers. But Tim Sweeney believes that 30% is too much. His argument is that digital distribution is not the same as selling physical games in a retail store.
There’s no physical inventory, no warehouse full of boxes, and no traditional retail distribution network. Digital distribution has become much cheaper and more efficient.
So why should a storefront continue collecting such a large percentage? Sweeney has argued that the costs of running a digital storefront don’t justify a 30% commission, particularly for smaller developers.
And he has a point worth discussing. A small independent studio might spend years creating a game. It then has to pay for marketing, development tools, salaries, contractors, and other expenses. Giving up 30% of revenue to a storefront can make an already difficult business even harder.
But here’s where things get interesting.
Valve actually changed its revenue structure in 2018. For games earning more than $10 million, Valve reduced its share to 25%. For games earning more than $50 million, its share drops to 20%. However, those thresholds mean smaller developers generally remain on the standard 70/30 split.
And this is something Sweeney strongly criticized.
In fact, he wasn’t particularly polite about it.
In emails revealed through legal proceedings in 2024, Sweeney criticized Valve’s decision to offer better terms to the most successful developers. He argued that Valve was effectively giving special treatment to the companies that needed the discount the least.
He even wrote:
“Why not give ALL developers a better deal?”
And in another message, he referred to Valve’s leadership as “you assholes.” Well, that’s certainly one way to open a business negotiation. Imagine emailing your competition and starting with that. I’m not sure that would go over particularly well in most corporate environments.
Valve’s COO Scott Lynch reportedly forwarded the message internally with a simple response:
“You mad bro?”
And that pretty much tells you how friendly this relationship was becoming. But the 30% commission was only the beginning.
In December 2018, Epic launched the Epic Games Store. And it wasn’t trying to quietly compete with Steam.
Epic came out swinging. The biggest selling point was its developer revenue split. Instead of Steam’s standard 70/30 arrangement, Epic offered developers 88% of revenue, keeping just 12%. That was a significant difference.
Epic also began securing exclusive games. Some titles that might otherwise have launched on Steam were released exclusively through the Epic Games Store for a period of time.
Epic was willing to spend money to attract developers and publishers. It gave away free games, negotiated exclusive deals, and used the popularity of Fortnite to bring attention to its new storefront.
From Epic’s perspective, this was how you challenge an established competitor. You offer developers better financial terms, give customers incentives to try something new, and build an alternative to the existing platform.
But PC gamers weren’t universally enthusiastic. Many players didn’t want another launcher. They already had Steam libraries filled with hundreds, sometimes thousands, of games. They had friends lists, achievements, cloud saves, and years of purchases. And now they were being asked to install another application just to play certain games.
Some players also disliked the idea of timed exclusivity. The argument was simple: PC gaming had traditionally been associated with openness and choice. Why should a game be restricted to one storefront?
And here’s the irony. Epic was arguing that competition would make the PC gaming market more open. But some of its most visible tactics involved paying developers to keep games away from Steam.
That created a major public relations challenge. Epic was trying to convince gamers that it was fighting for them, while some gamers felt that Epic was taking choices away.
And Steam continued to dominate.
Even with free games, exclusive deals, and better developer revenue splits, Epic struggled to convince the average PC gamer to abandon Steam as their primary storefront. Because let’s face it: getting someone to change their digital game library is difficult. Especially when they’ve already spent years building it.
PART 4 — THE ARGUMENT OVER WHAT STEAM ACTUALLY PROVIDES
Now, here’s where we need to be fair to Valve. Steam’s 30% fee isn’t simply a payment for hosting a download.
Steam offers a huge ecosystem.
There’s cloud saving, automatic updates, achievements, reviews, discussion forums, user profiles, remote play, the Steam Workshop, multiplayer tools, and much more. Valve has spent years building those features. And for developers, Steam offers something that can be incredibly difficult to recreate: an established audience.
A storefront can offer developers 100% of their revenue, but if nobody visits it, that doesn’t necessarily help them sell more games. This is one of Steam’s biggest advantages. Its user base creates a network effect.
People use Steam because their friends use Steam. They buy games there because their existing library is there. Developers release games there because that’s where the customers are. And that creates a difficult cycle for competitors to break.
Epic can offer developers better financial terms, but it can’t simply purchase the same level of customer loyalty overnight. And that’s where Sweeney’s criticism has expanded. He’s argued that Steam’s influence extends beyond its store commission.
He’s also criticized the way developers rely on Steamworks, Valve’s collection of services and tools for things like multiplayer, achievements, and social features. In October 2026, Sweeney again criticized Steam’s ecosystem, arguing that Steamworks can make it difficult for developers to build social experiences that work across different platforms and storefronts.
His argument is that developers can become dependent on Steam’s infrastructure, making it harder to create services that work everywhere. Valve’s defenders would point out that developers aren’t forced to use Steamworks and that these services can provide useful features. And that’s a legitimate counterargument.
If a company builds a popular service that developers voluntarily use, is that anti-competitive? Or is it simply providing a product people want?
That’s a much more complicated question than just comparing two storefront commissions.
PART 5 — THE EXCLUSIVITY CONTROVERSY
Let’s talk about one of the biggest reasons some PC gamers became frustrated with Epic: exclusivity.
Epic used exclusive publishing deals to attract customers. Games like Metro Exodus, Control, and Borderlands 3 had Epic Games Store exclusivity periods on PC.
From Epic’s perspective, exclusives were a way to encourage people to use the store. After all, if Steam already has nearly every major PC game, why would anyone bother installing another launcher?
Epic needed something that Steam didn’t have. But from a consumer perspective, the situation was more complicated. Some gamers didn’t want to use multiple storefronts.
Others felt that a game announced for PC should be available wherever PC gamers wanted to purchase it.
And there was another criticism. Epic was arguing that developers deserved more choice, but some of its exclusive deals limited the choice available to consumers.
It’s a little like opening a new grocery store because you believe consumers deserve more choices, and then telling them they can only buy certain brands at your store. Technically, there’s a new store. But the customer might not be thrilled about the arrangement.
Now, exclusivity deals aren’t unique to Epic. Console manufacturers have used them for decades. Microsoft, Sony, and Nintendo all understand the value of exclusive games. But PC gaming has historically had a different culture.
And that’s why Epic’s strategy generated so much controversy.
PART 6 — THE YACHT SHOTS
Now, we need to talk about the part of this rivalry that sounds like something from a comedy show. Gabe Newell is famously wealthy, and he’s associated with luxury yachts.
Tim Sweeney, meanwhile, has become increasingly vocal about Valve’s business practices. And in May 2026, when Valve announced a price increase for the Steam Deck, Sweeney took the opportunity to make a joke.
Rather than simply criticizing the price increase, he sarcastically suggested that rising component costs were creating problems for the supply chain of luxury megayachts.
Yes.
Megayachts.
That is a very specific target. The joke was clearly aimed at Newell and his reputation for enjoying expensive boats. And while it was funny, it also demonstrated how personal the public commentary had become.
But there’s an important distinction here. Gabe Newell generally hasn’t responded to Sweeney with the same level of public aggression. This is largely a one-sided public feud. Sweeney regularly comments on Valve’s policies, while Newell tends to keep his public attention focused elsewhere.
Which raises an interesting question: Is Gabe Newell deliberately ignoring the criticism? Or does Valve simply believe that its business model is working well enough that it doesn’t need to respond?
Either way, Sweeney doesn’t appear to be running out of things to say.
PART 7 — THE AI ARGUMENT
And now we get to one of the newest disagreements: artificial intelligence. AI is becoming a major issue throughout the gaming industry. Developers are experimenting with AI-generated art, dialogue, music, programming assistance, and other tools.
Some people see AI as a way to make game development faster and more affordable. Others worry about copyright, creative jobs, quality, and whether players are being properly informed about how a game was made.
Valve has introduced disclosure requirements for developers using generative AI to create content that ships with their games. The goal is to provide customers with information about AI-generated content.
But Tim Sweeney strongly criticized this policy in October 2026. He argued that requiring developers to disclose AI use is effectively a political act and could encourage online campaigns against games that use these tools. His position is that developers should be able to use productive technology without being subjected to what he views as unnecessary public scrutiny.
However, critics of Sweeney’s position argue that customers have a right to know what they’re buying. If a game uses AI-generated artwork, dialogue, or other content, why shouldn’t players be allowed to know?
And there’s another interesting issue here. Epic is heavily invested in AI technology and has been moving toward a more AI-focused strategy.
So, from Sweeney’s perspective, Valve’s disclosure policy could be viewed as creating unnecessary friction for developers who want to adopt AI. But from a consumer perspective, transparency isn’t necessarily an attack on AI.
It’s simply information. AI tools could help smaller studios compete. But customers should also be able to make informed decisions about the games they purchase. The challenge is figuring out how to provide transparency without turning a disclosure policy into a punishment.
And that’s a debate that isn’t going away anytime soon.
PART 8 — WHO IS ACTUALLY WINNING?
So, after all these years, who’s winning? Well, if we’re measuring success by the number of PC gamers using the storefront, Steam is still the clear leader.
Steam has an enormous user base, a huge library, and a level of customer loyalty that competitors have struggled to match.
Epic has made progress. Its store has attracted major games, offered free titles, and created a more financially attractive revenue model for developers. Epic also reported more than $1 billion in third-party PC game spending in 2024.
But Steam remains substantially larger. And that brings us back to the original question. Is Steam charging too much?
That’s debatable. Thirty percent is a large commission, particularly for smaller developers. But Steam also provides services and access to customers that have real value.
Would a smaller developer be better off keeping 88% of sales on a storefront with fewer customers? Or receiving 70% on Steam, where a much larger audience might discover the game? It depends on the game, the audience, and the marketing strategy. And that’s why this debate is so complicated.
Epic wants developers to have more options. Valve wants to maintain the platform it has built. And gamers want affordable games, good services, and the freedom to buy their games wherever they want.
Those goals can overlap, but they don’t always align.
PART 9 — WHAT HAPPENS NEXT?
Looking ahead, I think this rivalry will continue to shape PC gaming. Epic has continued investing in its storefront, developer services, and Unreal Engine.
Valve continues to benefit from Steam’s enormous community and its hardware ecosystem, including the Steam Deck. And the broader industry is facing new challenges. AI is changing how games are developed.
Subscription services are changing how games are distributed. Cloud gaming is creating new ways to access games. And legal challenges involving digital storefronts are forcing companies to defend their business practices. There are also ongoing antitrust disputes surrounding Steam’s market power and developer pricing policies.
For consumers, these developments matter.
Competition can encourage companies to offer better prices, better services, and more features. But competition doesn’t automatically make everything better. Exclusive deals can limit availability. Too many launchers can create frustration.
And lower developer commissions don’t necessarily guarantee better games or lower prices for customers.
Ultimately, the best outcome would be a PC gaming marketplace where developers have real choices, consumers have meaningful options, and companies have to compete by providing value.
Not just by locking people into an ecosystem.