Tim Sweeney emailed Gabe Newell calling Valve 'you assholes' over Steam policies, to which Valve's COO replied internally 'you mad bro?'

Gaming IndustryTim Sweeney emailed Gabe Newell calling Valve ‘you assholes’ over Steam policies, to which Valve’s COO replied internally ‘you mad bro?‘When you purchase through links on our site, we may earn an affiliate commission.Here’s how it works.

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(Image credit: Valve software)

Gabe Newell in a Valve promotional video, on a yacht.

Valve is currently embroiled in a US antitrust lawsuit with Wolfire, a developer that alleges the Steam platform holder uses its position to unfairly crowd-out rivals and control game prices. Valve tried to have the suit dismissed, but in May 2022 the court ruled it could go ahead with some changes and enter the discovery phase: the juiciest part of the legal process where, among other things, plenty of internal correspondence from the companies involved is made public.

On August 12, 2017, Gabe Newell emails Tim Sweeney: “Anything we doing to annoy you? We’re guessing Sean Jenkins’ public dumbness might be part of it.”

Sweeney replies to Newell and Valve’s Erik Johnson saying he’s not annoyed “and I’ve never heard of Sean Jenkins” (poor Sean). Then Sweeney adjusts his flight goggles and gets ready for takeoff on one of his pet peeves: the 30% platform fee on Steam. “There was a good case for [such fees] in the early days,” writes Sweeney, “but the scale is now high and operating costs have been driven down, while the churn of new game releases is so fast that the brief marketing or UA value the storefront provides is far disproportionate to the fee.”

Sweeney opines that, if you were to strip away the top 25 selling games on Steam, “I bet Valve made more profit from most of the next 1000 than the developer themselves made.” The maths to get there is 30% to Valve, 30% on marketing, and 15% on servers / engine costs, so “the system takes 75% and that leaves 25% for actually creating the game, worse than the retail distribution economics of the 1990s.”

If either Valve employee replied to Sweeney, it’s not in this disclosure. Which might be why, when we get to December 2018, Sweeney is in an even more ornery mood. At this time Valve had introduced a royalty change that almost seems custom-designed to get Sweeney frothing at the mouth: it reduced Valve’s cut on the most-successful games down to as low as 20%. Not only is Sweeney all about the little guy but, at this exact moment in time, he’s gearing up for the launch of the Epic Games Store and the antitrust fight between Epic and Apple (still ongoing).

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The next day Valve’s Scott Lynch simply sends this email to both Gabe Newell and Erik Johnson with one-line commentary: “You mad bro?”

I imagine, at that exact moment, Tim Sweeney probably was quite mad. It should also be noted that, while some may see Lynch’s response as rather flippant, it was of course never meant to be seen outside of Valve. And Sweeney has just emailed two senior Valve types, told them he’s launching a direct competitor to their platform, criticised how Valve operates its store, ranted a bit about Apple, ranted a little bitmoreabout Apple, and then called them “assholes.” I mean, it’s a bold move Cotton.

The Wolfire lawsuit is much wider than just these emails, and Carless doesraise the interesting questionof who exactly is funding the smaller company against Valve. Litigation on this scale is eye-wateringly expensive and, while Valve has large pockets, it’s not clear where Wolfire is getting the money from. It’s currently asking the court to resolve the suit as a class action claim, and has re-stated its core arguments about pricing, during which amusingly enough it backhands the Epic Games Store (“publishers have little incentive to offer games on EGS and consumers have little incentive to use the platform”).

The suit honestly doesn’t seem enormously coherent in what it claims about Valve, with various different elements of how Steam works being conflated, and I’m not sure it’s going anywhere but, hey, not a lawyer. Still, thanks to this we’ve found out what happened behind closed doors when Epic was launching its big Steam competitor: at Valve, they were laughing.

Correction: A previous version of this article incorrectly suggested Scott Lynch was replying to Tim Sweeney directly. He was commenting on Sweeney’s email to Gabe Newell and Erik Johnson.

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