The platform takes its cut, and the live-service bet keeps coming apart

This week’s games-business news has one thread running through it: who controls how a game makes money after it ships, and who pays when the bet goes wrong. A long-running lawsuit against Valve, owner of the Steam store, surfaced fresh detail on how the company protects its cut of every sale. A California bill advanced that would force studios to keep online games playable after they pull the plug. And another live-service game shut down — the model that was supposed to fund the industry keeps closing teams instead.

Steam’s 30% cut, and the rule that protects it

Valve has run the PC games store Steam for two decades. It takes 30 cents of every dollar a game earns there — the “platform cut,” the fee a storefront charges to host, sell, and deliver a game. A class-action lawsuit running since 2021 says that cut is too high and that Valve uses its size to keep it that way [44][6].

This week Bloomberg published documents from the case [6], and other outlets covered the detail [44][40]. The core allegation is a clause the suit calls a “Platform Most Favored Nation” rule: developers who sell on Steam can’t offer the same game cheaper on a rival store [44]. The mechanism matters. If a developer can’t undercut Steam anywhere, the 30% fee can’t be competed away — a rival store offering a smaller cut gives the developer no room to pass the saving on. Court filings say Valve told some developers, including the publishers behind Rainbow Six Siege and Middle-earth: Shadow of War, that games could be removed from Steam if priced lower elsewhere [44].

Valve’s founder Gabe Newell pushed back, saying players have “enormous choice” about where to buy games [21]. The case is unproven, and a parallel suit runs in the UK [44]. But the fight is the same one Apple and Google faced over their app-store fees — a single dominant gateway, a fixed cut, and a rule that stops anyone routing around it [6].

Keeping a game playable after it dies

On the same theme of control after the sale: California’s State Assembly passed AB 1921, the Protect Our Games Act, by 43 votes to 16 [33]. It would require companies to warn players before they shut down a server-dependent game, and to leave a way to keep playing it — offline access, community-run servers, or some other workable option [33][4].

The bill came out of the Stop Killing Games movement, which formed after Ubisoft pulled the racing game The Crew from its servers and from players’ libraries, leaving paying customers with nothing [33]. The system underneath: many modern games are sold as a one-time purchase but depend on a server the publisher can switch off whenever the game stops earning. When the server dies, the game dies — even for people who bought it. The bill tries to break that link. It still has to clear the State Senate [33].

Another live-service bet folds

Brendan Greene — “PlayerUnknown,” the designer behind the battle-royale hit PUBG — stopped development on his survival game Prologue: Go Wayback less than a year after launch and laid off staff [11][13]. “I have reached the limits of how far I can continue to fund this journey,” he wrote, saying his independent studio could no longer afford the work [13]. The game will be made free and buyers refunded [11].

This is the live-service model failing at small scale. A live-service game keeps selling things to the same players for years — battle passes, cosmetics, new seasons — instead of one purchase up front. It only works if a large crowd stays and keeps spending, so a studio has to fund the game for a long time before it knows whether the crowd will show. Prologue didn’t draw one, and the runway ran out [11].

The same pattern shows at the top. New data on Sony’s PlayStation business shows first-party game sales — the games Sony itself makes — fell from 58.4 million units in its 2020 financial year to 28.9 million in 2024, before a modest rebound to 32.1 million in 2025 [14][8]. Part of that is the COVID-era bump fading [14]. But part is Sony’s own live-service push, which aimed to launch 12 such games by 2025 and delivered a handful [14]. Its online shooter Concord was pulled two weeks after launch; other projects were cancelled and studios closed [14]. The bet meant to fund the future kept producing write-offs instead.

The other side: people still buying, and a different model that worked

For all the contraction, more people play than ever. The US industry body reported 212.3 million Americans — 67% of those aged 5 to 90 — play at least an hour a week, up 7.2 million on last year, even after console and PC price rises [24][31].

And a counter-example to the live-service squeeze: Mina the Hollower, a single-purchase action game from a small studio, sold 300,000 copies in three days at $20 [29][19]. One game, bought once, no years-long server bill. It reportedly secured the studio’s finances in a week [19]. The demand is there; the question every studio is now testing is which way of charging for it survives.

Where the contraction shows up: AI and jobs

Underneath all of it is cost. Development budgets keep rising, and studios are reaching for two levers: layoffs and AI. The US tech sector announced 38,242 job cuts in May, the most since August 2024, and 123,653 so far this year — up more than 65% on the same period in 2025 [52]. Games studios are part of that wave; mobile developer Metacore cut 159 staff and closed offices this week [10].

The AI lever drew open conflict. The new Tomb Raider: Legacy of Atlantis disclosed “AI-assisted assets” later “refined by humans,” to cut development cost [3][2]. The voice actor Jennifer Hale, who played the lead in Mass Effect, called on studios to own the choice: “Ain’t nobody making you do it” [1]. The mechanism is plain — AI is a way to make games with fewer people, which is exactly why it lands hardest on the people who make them.