Wal-mart can price lower than the MSRP because Wal-mart is a retail outlet: they're making a calculated price based on their game supply, perceived game demand, and a desire to undercut their competitors. Valve, meanwhile, is contractually obligated to price according to Vivendi's MSRP so as to not undercut retailers, thus screwing over the retailers, from who 98% of HL2's sales revenue will come from.
There's a difference between a game maker undercutting the people who are selling its games, and a retailer undercutting its competition.
So Walmart can screw other retailers by lowering their price...
I understand that it's a contract, I just don't understand why anyone would agree to it. I should have said that instead.
The point is Valve should be able to lower their price because they don't offer a physical copy. I'm not going to buy it from Steam because I will be able to get the physical copy for less.