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Valve, the gaming giant behind Steam, is reportedly generating an astounding $3.5 million in profit per employee from Steam commissions alone. This figure dwarfs tech behemoths like Apple and Facebook, making them seem like small businesses.
Leaked documents from a court case revealed the staggering statistic, initially highlighted by The Financial Times. The documents, though quickly removed, allegedly showed Steam’s commission revenues soaring from approximately $100 million in 2009 to an estimated $2 billion in 2021.
Steam’s operating profit margins also saw a significant increase, climbing from 30% to nearly 60% during the same period.
How Does Valve Achieve Such High Profitability?
The key lies in Valve’s relatively small workforce. With only 336 employees in 2021, according to the leaked documents, the revenue generated by Steam commissions is spread across a much smaller team compared to companies like Facebook or Apple.
This calculation puts Valve’s profit per employee at a staggering $3.5 million.
Even more impressively, The Financial Times calculates an operating profit of $11.4 million per employee when considering the 79 employees directly working on Steam and the 35 in administrative roles.
Comparing Valve to Other Tech Giants
In 2018, data scientist Kristian Miller calculated Facebook’s net income per employee at $780,400, significantly lower than Valve’s reported $3.5 million per employee from Steam commissions in 2021.
While these figures are from different years, the sheer magnitude of the difference highlights Valve’s exceptional profitability. This is considering that the comparison is against just one portion of Valve’s income.
Why This Matters
These numbers demonstrate the power of Steam’s platform and Valve’s efficient business model. The company’s ability to generate such high profits with a relatively small team underscores its dominance in the PC gaming market.
While the leaked documents should be approached with caution, the figures align with the general perception of Steam as a highly lucrative platform. The data paints a picture of Valve as a profit-generating powerhouse, far exceeding many of its tech industry peers in terms of revenue per employee.
The future looks promising for Valve, as Steam continues to be a central hub for PC gamers worldwide.
Source: The Financial Times, SteamDB