Challenging Steam

What is Steam?

No, I’m not talking about gaseous water.

For those unfamiliar, Steam is an online platform where gamers can talk about and purchase their favorite games. Steam has been one of the dominant marketplaces for buying games since 2007/2008.

This dominance is much different than it’s humble origins. When Steam was first released in 2003, the main purpose was to serve as a platform to update Counter-Strike.

Steam quickly went from a nice extra for updating, to a requirement for all Valve games in 2005. Despite a disastrous initial launch with Half-Life 2, the company quickly recovered.

By 2007, Valve convinced enough other major companies, like Activision and Capcom, that hosting games on steam make sense. By this point, hosting games on Steam became a PC standard.

Today, Steam is well known for it’s numerous and plentiful sales. This is especially true around the holiday season. As many PC gamers know, Gabe Newell just loves to drain your wallet, especially during the holidays.

Thanks, Gabe, my wallet cries every time.

There are other places to buy games?

Until recently, I was woefully unaware of other platforms which hosted games from other developers. I only recently stumbled upon an article which discussed itch.io.

I like Itch’s platform. The platform is intentionally simplistic. Itch makes it clear that it’s a platform for buying games to support developers. I respect this single, focused intention.

Itch’s no-frills approach is fitting given its strong focus on indie games. I personally love the attention and care Itch gives to small indie developers. Many of the games hosted here are peculiar and break the standard mold.

Large game developers have also noticed the potential money and are trying to get skin in the game. Some developers have made independent launchers, but only to host their games.

Some developers are starting to challenge Steam’s monolithic dominance.

At the time of writing, Epic Software has recently announced their intention to launch a game hosting platform of their own. More importantly, it seems Epic is trying hard to pull people away from Steam.

Epic’s approach is two-fold.

First, Epic is challengin steam through their profit sharing model. Epic intends to take a smaller percentage (only around 12%) from sales revenue. A lower platform commission would be a big shakeup.

Since Steam is the primary game in town, they take a relatively large commision of 20–30% of game sale revenue. For small game studios, the 8–18% difference could mean life and death.

Epic is also trying to challenge Steam by directly integrating influencers and streamers. Epic’s launcher will directly connect game developers with those who can promote their game.

Epic’s platform also incentives influencers and streamers. Streamers will usually receive the game free. They will also earn a commission based on attributable game sales.

These two features are set to strongly contend with the Goliath of Steam.

Discord, a voice chatting platform, also announced its intention to explore a similar move. Discord intends to leverage its position as a social hub for gamers to more directly challenge Steam.

Given the new competition, Steam’s seemingly secure position as the go-to host for PC games is looking shaky.

What has made Steam so enduring?

Although Steam is now being challenged, it has been dominant for so long. Here is my take on why it has taken so long for developers to challenge Valve.

Honestly, Steam had a first-mover advantage for a long time. Valve created the infrastructure to host games, and drove traffic to their platform through several hit games like Portal, Left 4 Dead, and Half-Life.

Valve’s efforts paid off. When developers saw how difficult developing this infrastructure was, but all the potential financial upside, they wanted in.

Valve also did a decent job of integrating social aspects into their platform. This made the platform more of an experience and less of a virtual game store.

Lastly, Steam has always been a hands-off platform. Until recently, this has been viewed positively. Only now are they experiencing any real, consistent backlash for this approach.

What’s next?

I think it’s going to be an interesting time for games and gamers. While Steam has been the defacto place to go get new PC games for a while (I’m purposefully omitting sites like g2a since I don’t agree with their ethics) this seems set to change.

Overall, I think Steam was and still is a good platform for developers. It grants smaller games more exposure (after the recent patches anyways.) Steam also lets smaller developers focus less on developing certain types of infrastructure and more on their game.

However, I believe the competition benefits gamers and developers. While Steam has been generally good, it does take a steep portion of revenue. Further, since Steam was the only game in town, there wasn’t much you could do if you disagreed with their policies.

I’m excited to see how different companies re-imagine a game hosting platform. Steam is just one of a nearly limitless amount of possibilities.

I look forward to one of these companies creating a new aesthetic or feature that revolutionizes the gaming experience.

I can’t wait to try all these new platforms and hopefully sample the new wave of games they enable and nurture.