Santa Ragione co-founder Pietro Righi Riva on Horses, Steam, and possible closure of the studio

Milan-based indie studio Santa Ragione announced that its upcoming first-person horror game Horses — slated for a December 2, 2025 release — was permanently barred from Steam after a 2023 content review, a decision Valve reiterated on Nov. 26, 2025. The ban blocked publisher support and access to the dominant PC storefront, leaving the studio with roughly €50,000 already invested, an estimated additional development need of about $100,000, ad‑hoc loans from friends and staff side‑jobs to finish the title, and plans to wind down operations after launch with a high risk of closure.

Analysis

Market structure: Valve’s permanent gatekeeping in this case reconfirms Steam’s de‑facto PC storefront dominance (~70–80% share). Winners are alternative distribution owners and platform-owners with multi-channel reach (Microsoft/Xbox, Epic/GOG/CD Projekt); losers are indie studios and mid‑tier publishers that rely on Steam for discoverability and wishlists. The choke point amplifies pricing/distribution power for platform owners and lowers expected supply of experimental content over the next 12–24 months.

Risk assessment: Tail risks include (1) regulatory action (EU/US antitrust) forcing new onboarding rules within 6–24 months; (2) a cascade of studio closures that reduce new IP supply by 10–30% in 1–2 years; and (3) reputational or legal shocks if more removals trigger coordinated lawsuits. Near term (days–weeks) the story is idiosyncratic; medium (months) publisher risk aversion rises; long term (1–3 years) distribution diversification or M&A will reshape economics.

Trade implications: Favor platform owners and diversified monetizers: overweight Microsoft (MSFT) and Tencent (TCEHY, as Epic proxy) for 6–18 months; underweight/trim high‑beta, Steam‑dependent small caps (Embracer EMRBF/EMBRAC‑B, Frontier FDEV) by 30–50%. Use 6–12 month call spreads on MSFT for asymmetric upside; buy 3–6 month put spreads on selected smallcaps to hedge a closure wave.

Contrarian angle: Consensus understates indie resilience — developers can monetize via DRM‑free direct sales, itch.io, console ports and patronage, capping downside for acquirers. Historical analog: Apple/Epic store fights created alternative distribution and accelerated M&A over 18–36 months; similar dynamics could create buying opportunities for well‑capitalized publishers and platform owners.

Key Decisions for Investors

• Establish a 2–3% portfolio long position in Microsoft (MSFT) over 6–12 months; implement via buying a 6–12 month ATM call and selling a 15% OTM call (call spread) to limit cost while capturing Game Pass/PC distribution upside if Steam share erodes.
• Establish a 1–1.5% position in Tencent (TCEHY) as an indirect Epic/Gaming ecosystem play, horizon 9–18 months; sell 20% OTM covered calls (30–90 day cycles) to generate yield while awaiting growth from alternative PC distribution.
• Trim exposure to Steam‑dependent small/mid cap gaming stocks by 30–50% immediately—examples: Embracer (EMBRAC‑B / EMBRF OTC), Frontier (FDEV.L). Reallocate proceeds to MSFT/TCEHY and keep 5–10% cash for opportunistic M&A-related dips.
• Buy protective 3–6 month put spreads (limit cost) equal to ~1–2% portfolio on a basket of smallcap game stocks (EMBRF, FDEV, small public indies) to hedge a 20%+ downside if more studio closures or a funding freeze occurs.