Valve has an arguably better platform but is more expensive

Yes, I think everyone would agree that Steam is the best PC games platform

doesn’t have some exclusives

Well yeah, that's the definition of exclusive. Sony, Epic, and Microsoft pay to have games not available on other platforms. First parties don't release their games on other platforms to increase the attractiveness of their platform. Valve does this with their first party titles as well (CS:GO, Half Life, etc), but they release very few games.

Exclusives are the definition of anti-competitive behavior. Valve only does this for their first party titles, and other than that is very competition friendly, since they allow devs to release on any other store, as well as make free keys to sell elsewhere.

As a platform, they behave much better than pretty much everyone else, with maybe only GOG beating them due to license transfers and DRM-free commitment. Steam arguably has the best customer service in the industry (or if not best, very close to it), so it's less of a concern.

Valve didn’t figure out how to port Steam to ARM

Why would they? Windows on ARM is pretty much nonexistent, emulating x86 on ARM on Linux has severe performance issues, and the best platform support for ARM is from Apple, where there's even less game selection.

Most games don't work on ARM, so there's little point in supporting it. But Steam does work on macOS on ARM (I think it uses Rosetta still?), where devs are actually going to port their games to ARM. Windows and Linux on ARM are incredibly niche and games just aren't ported for those platforms. I guess they could do a compat layer like Rosetta, but it'll be a terrible experience running a game through a compat layer.

AFAIK, EGS and GOG don't support ARM on anything other than macOS (and phones for EGS), and why would they?

dragged their feet on x86-64

Why does that matter? The main reason to port to x86_64 is to access more memory. Even while Steam was x86, games could still absolutely be x86_64. During the transition, they still needed to support 32-bit, so why do extra work when the benefits don't really apply?

I've helped update to 64-bit, and it can be a lot of work. Why prioritize that?

I'm not sure where that money goes

• Steam features like Steam Input (i.e. all that stuff that makes them stand out)
• Linux support - tons of investment into WINE/Proton, drivers, etc; this is huge for Steam Deck
• hardware development - Steam Deck, Valve Index, etc
• marketing - both their products and other devs' games
• employee salaries - Valve employees are paid very well
• legal fights - e.g. patent lawsuits
• Gabe's yachts - similar to how Unreal Engine profits are used by Tim Sweeney

They're not public, but it's not hard to estimate since they publish a lot of data about the platform.