Baseline Price Rigidity and Promotional Adjustment in Digital Distribution Platforms: Empirical Evidence from the Steam-Epic Rivalry

Abstract

This paper asks why Epic Games Store's 18-percentage-point commission advantage over Steam did not produce durable pass-through into Steam's current list prices, and how identity-bound ecosystem assets sustain this rigidity. Using a monthly panel of 547,518 Steam RPG title observations from January 2020 to March 2026, the study combines matched-sample staggered PSM-DID, lifecycle controls, price-margin decomposition, event-study evidence, and a 1,000-iteration permutation placebo test. Three results stand out. First, Steam's current list price does not respond significantly once lifecycle dynamics are modeled (β = 0.0238, SE = 0.0194, p = 0.2205), while the effective transaction price declines significantly (β = −0.1194, SE = 0.0215). Second, this decline operates through the promotional margin: discount depth increases by 6.46 percentage points (SE = 0.0081), and promotion probability increases by 5.12 percentage points (SE = 0.0113). Third, achievement-based lock-in emerges as the primary mechanism sustaining list-price rigidity: the achievement interaction is positive and significant (β = 0.0269, p = 0.0016), whereas workshop and playtime dimensions are not. These findings imply that lowering platform commission fees is insufficient to discipline an incumbent whose pricing power rests on non-portable identity assets rather than cost structure alone.