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If both me and my friend are sharing each others libraries, can I play a game from his library while he is playing one from mine?

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With Steam Family Sharing, you're sharing your entire library at once, meaning that if someone is playing a game from your library, nobody else can access any game from that same library. If you're playing a game from your friend's library, your friend is free to play any games from your library, as your library is not in use while playing your friend's game.

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    Did you test this? From my experience the sharing was blocked from my friend when I was playing -any- steam game.
    – Inferno IV
    Commented Aug 6, 2019 at 15:07
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    I've had the same experience as @InfernoIV.
    – Old Gamer
    Commented Aug 6, 2019 at 15:07
  • Yes, this has always worked for me. Commented Aug 6, 2019 at 15:17

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