An anonymous reader writes: Last week Valve made an interesting but seemingly innocuous announcement: they're giving developers control of their own sales on Steam. Nichols Lovell now claims that this has effectively kicked off a race to zero for PC game pricing. He says what's starting to happen now will mirror what's happened to mobile gaming over the past several years. Quoting: 'Free is the dominant price point on mobile platforms. Why? Because the two main players don’t care much about making money from the sale of software, or even In-App Purchases (IAPs). The Appstore is less than 1% of Apple’s revenue. Apple has become one of the most valuable companies in the world on the strength of making high-margin, well-designed, highly-desirable hardware.
... Google didn't create Android to sell software. It built Android to create an economic moat. ... In the case of both iOS and Android, keeping prices high for software would have been in direct opposition to the core businesses of Apple (hardware) and Google (search-related advertising). The only reason that ebooks are not yet free is that Amazon’s core business is retail, not hardware. ...Which brings me to Steam. The Steambox is a competitor to consoles, created by Valve. It is supposed to provide an out-of-the-box PC gaming experience, although it struggles to compete on either price or on marketing with the consoles. It doesn’t seem as if Steam is keen to subsidise the costs of the box, not to the level that Microsoft and Sony are. But what if Steam’s USP was thousands or tens of thousands of games for free?'