Historically Steam hasn't run on multi-user system so there hasn't been a need. It also would be unusual for two different users to be running a game on the same computer, so there hasn't been a user request for this kind of thing.
People already do this in a way (idling in TF2, which is actually what I'm trying to accomplish here). On Windows, via Sandboxie, Steam is willing to run multiple instances from a single installation, and in fact it works, as long as they don't all try to access the same Steam data files at the same time.
On Linux, this isn't an issue, as each user has their own copy of the Steam files (e.g. ClientRegistry.blob) in ~/.local/share/Steam. So in theory, that issue is completely sidestepped, so the only thing preventing this from actually happening is Steam finding another instance already running, even if that instance is owned by another user.
There's more to it than just the local file content, but it's definitely possible in theory to support multi-user access. We've made a few fixes in this area but right now we aren't promising multi-user support.
I am affected by this issue. The error message is as above. Currently I'm running a system with an i7 processor and two Nvidia Geforce GTX 570 GPUs, each running its own X server and user session.
This setup should well be able to handle two instances of Team Fortress 2 at the same time, but this issue is setting me back.
I could imagine a temporary workaround being to hide processes from other users, but I didn't try this yet.
This is also an issue I am facing. I have a triple-seat system on Arch Linux 64-bit. I would love to play the same game with my wife who would sit next to me running a different X session, but I am faced with the same error above. Other games not using steam will run two instances just fine. I don't see why this should be a problem
One workaround that I am not proud of is to run steam under wine on the second X session. You should not have to do this.
I've tried to separate process access for users and copy all libs to start second steam. Users don't see steam running and uses their own copy of steam files, but "A Steam Engine instance already exists".
Nothing extracted yet.
Apparently Steam does not support multiple users running Steam simultaneously. Running Steam as normal in one X session works fine, but starting another X session as another user and trying to run Steam does not, failing with the error "Fatal Error: Steam failed to load: *SteamStartEngine(0xff8c31a0) failed with error 1: A Steam Engine Instance already exists".
Same behavior occurs using gksu/kdesudo. Should Steam not support running separate instances for separate users?