That's wrong though.
Saying that Valve didnt invest their profits into developpers is blatantly wrong. They just didnt do moneyhats. Because they dont believe in such an outdated and anticompetitive practice.
They invested inside tools. Tools that made the PC platform more open. Software to make developpement easier for devs. Features to aleviate developers work. Giving them ALL equal chances.
They did things so that developers making games, whenever AAA or indie, could support any VR hardware without them medling into that. They did things so that ALL developers could support any controler without them doing it. They're doing things so that ALL developers can release games playable on Linux and soon MacOS, without them working on it.
Valve doesnt believe in exclusives. In a sane industry, people would champion that. But here we have a bunch of hypocrites on this very forum. How do you I know that ?
Pretty simple: Valve bought Campo Santo, which is now part of Valve. Firewatch is still sold on PS4/One. Firewatch is still coming to Switch. Their next game, Valley of the Gods, is still coming to consoles. According to some people in this thread, Valve isnt doing anything.
So I'm asking these people, how honestly they would have react to the following news ?
"Valve bought Campo Santo. Firewatch cancelled on Switch. Valley of the Gods now Steam only, console versions cancelled."
I can tell you, no one here would say "Well done ! Valve investing in games ! Competition at full work ! Your move now Nintendo/Sony/Microsoft !".
In fact, I can tell you users here who are Switch fans (there's no accusation or bad thing here, it's nice to like things) would ve rightfully pissed at this news.
Valve has been investing to make the market grow as a whole. Not Steam only. The whole platform. They made the digital market on PC far better and competitive thanks to free steam key generation, cultivating a shiton of storefronts.
They made Windows better by making gaming easier and more convenient thanks to various tools and features.
They made Linux and MacOS better by pushing gaming on these platforms.
They made the PC VR market better with a wide vendor agnostic support of VR headsets.
Epic is working to make Epic bigger. That's all.
So like the console manufacturers, they invested in development tools, networks, infrastructures, hardware.
But at the end, because there are three companies competing for the market share in consoles, they were forced to offer additional incentives to developers.
The thing is that in the PC space, Valve obtained a situation of dominance.
For its own merits, because as you have said, they did a lot of good things in the PC space.
But when their benefice grew, and Steam started to be really BIG, they didn't invest the same amount of resources than console manufactures in reverting part of this benefice to developers, because of course, they were dominating the market.
In consoles, we have seen this: every time than a new company appeared in the market, the rest of companies were forced to push their investment in developers.
Before the success of Sony, with the first Playstation conquering the Japanese home market, Nintendo was only a developer of games. And in N64/Gamecube, for the first time, we saw Nintendo funding products of third party companies, imitating the same strategy used by Sony.
Until this year, Valve was in a confortable position, like Nintendo in the 80s and to a lesser extent, Nintendo in the early 90s.
Like in the NES era, Steam was the only option in the PC market, with the other ones being marginal and irrelevant, in the same way as the main competitor of NES, the PC Engine, was a niche product.
And now than Epic has appeared like Sony in the mid-90s, offering marketing deals and better conditions to the developers, Valve will be forced to react.
Indeed,
they have already reacted, by reducing their cut in the price of a game until a 20%, for the most successful games.
This is a reaction to Epic, and it's thanks to a new agent in the market.
So as I said, this is positive for the industry.