It’s just a larger risk pool made up of other insurance companies. When you have a home insurance policy, you’re entering into a risk pool with everyone else in your policy that’s essentially a hedge against some catastrophic loss, everyone in the pool pays for each loss and it spreads the burden out, rather than a single member losing their home or going bankrupt.

For the home insurance example, when you have insurance companies that cover risk pools in one geographical area, especially smaller agencies that are regional, they have to hedge against the risk of a catastrophic loss so large the risk pool can’t cover it (like California wildfires) So they enter into an even large risk pool with other insurance companies.

This chain can actually go on for a while with several layers of reinsurance.

So while you do hire a company to manage the risk pool, really the risk is divided amongst the members/policy holders in the pool.

Yes, it’s called reinsurance.

Storage and bandwidth definitely weren’t cheap in 2003. Additionally Steam provides features that a brick and mortar store could never even think of providing, including updates, DRM, instant access to global consumers, community features, in-depth data analytics, and the ability to adjust pricing in real time.

While a lot of the work Valve has put in Steam seems both obvious and ubiquitous today, these were features they pioneered for both developers and consumers.

I’d also like to point out that the only digital marketplace I’m aware of that charges less than 30% by default (Epic) is famous for losing billions of dollars in the endeavor.

Before steam, digital sales of games wasn’t really a thing outside of a few niche examples. The 30% cut was the same percentage that retail stores were taking.

More like low below (the surface)

I did a few years in a Security Architecture role at a large enterprise. The amount of times I had to explain basic stuff to Enterprise Architects, Principal Engineers, and Principal developers with decades of experience was truly mind numbing.