Steam monopoly accusations and pushback from PC gamers
Let’s start off with the obvious. Steam is not a monopoly. In no way, shape or form is Steam a monopoly. It is by far the market leader and has market dominance for sure, and that is a conversation that needs to be had, but calling Steam a monopoly is the dumbest thing I have ever heard. A monopoly is where there is no choice for whatever reason. I can right now go buy a game on GOG, Epic, the various storefronts of independent companies (EA, Ubisoft, RockStar and so on) and I can even go to secondary web storefronts and buy Steam Keys for a game to activate on Steam, which Valve not only allows but actively generates Steam Keys for developers games when asked. Steam makes no money on these keys. Steam’s dominance is not due to a monopoly, but rather inactive or downright useless opposition. There is not one storefront that actively tries to beat Steam at its own game.
The only reason Steam has market dominance and remains the market leader is it does things with the customer in mind. I would like to highlight that Steam is in no way perfect, and anyone who uses the storefront will have gripes, but on the whole, they tend to do things that benefit most of their customers and developers. This is not altruistic in any nature, but rather an understanding that if you do things that make the customers experience better, they will use your storefront and therefore you will make money. Steam operates at a profit of an estimated $10Bil to Microsoft’s $18Bil and Sony’s $30Bil but their profit to staff ratio is $3.5M per staff member, with the next closest being Facebook at $750K per staff member. It is really simple. A fact that the other launchers don’t seem to get at all.
There was an article a little while ago detailing the LinkedIn post by Ethan Evans, the Vice President of Prime Gaming and it just shows exactly what is wrong with toppling Steam at the top. Like the article in PC Gamer says the basic theme was ‘we will just throw money at it.’ This has kind of been the mantra of all Stream’s competitors. They feel that all they need to do is create it and they will come, like Jim Morrison says in Wayne’s World 2. The issue is they don’t really create a competing storefront. They create a barebones version of Steam and think that little incentives will drive customers to them. Both Amazon and Epic used free games, which people promptly activated and then left. Some stayed but overall, they both became synonymous with free games and not a storefront. I think many people probably didn’t even realise that Amazon Gaming was a storefront! When you type ‘Epic Games Storefront’ in Google search bar the first option is ‘free games’.
I always use Epic as the best example of what the competition does wrong when trying to imitate Steam and Valve mainly because they are their closest competitor but still miles away. Epic is still, after 7 years, not a storefront worth speaking about. People have spoken ad nauseum about the reasons Epic is not a viable competitor to Valve. They took ages to get a shopping cart, the storefront is difficult to navigate, games are difficult to find, the UI is terrible and counterintuitive, your library is just odd and they didn’t even have ways to search it for specific games, there were no sorting options for your game for ages, you cannot set your games into groupings, and the list goes on and I haven’t even started on the social aspects of Steam. I find the Epic Games Store a hinderance rather than a pleasing experience. The same cannot be said for Steam.
I really don’t want to hate on Epic. When Epic revealed they were making a digital games storefront, I thought that out of everyone who has tried they had the best shot of shaking Steam up, I was quietly cheering them on, and in essence they did, but not because they were good but rather because they woke the beast that is Gabe Newall. There is a saying that ‘Steam does nothing and still wins’ but this is not exactly true. They are constantly innovating, but it is often forgotten as they are small incremental changes that can easily go unnoticed but as soon as you mention it to someone, they realise the difference it makes.
The initial release of the Epic storefront was abysmal. It reminded me of when I entered a programming competition in 1988 or so. We created a basic menu system that we were very proud of, and it took a lot of work (I was only 11-12yrs old). The competition did something similar but when we compared the two, ours looked like a couple of three-year-old had bashed a keyboard until something passible came out whereas their program was slick and useable. This is Steam and Epic. Epic Game Store’s release was like someone placing a market stall with a couple of shelves and an awning outside of Hamley’s Toy Store in London. Sure, people will take your free toy and then promptly go into Hamley’s to look around. Epic did not seem to make an effort. Now I don’t know what Tim Sweeny did or what he told his staff working on this, but Epic had almost infinite Fortnite money. I feel he should have said to his staff to take $1000 each and go and break Steam for a month. Buy games, speak on the forums, get involved as with their creator pages as a customer and create a creator page, release games on it, refund games (many and few), speak to customer services, read and write reviews basically do everything you can to understand what it is that Steam users like so much about the Storefront and as importantly, what they don’t like. Secondly, don’t release a half arsed, buggy, unfinished, difficult to use product and think that will not be remembered. Don’t bring console exclusive nonsense to the PC, people hate that. Give them a reason to download your launcher and use it. Free games are great solution to bring people’s libraries to your storefront (especially games they don’t have) as this is one of the drawbacks of a new launcher, but they are not a long-term solution but rather a jumpstart for your launcher.
The initial details of what Tim Sweeny envisioned for the store were admirable. Bigger profit cuts to the developers, no fees for using Unreal Engine for smaller developers until the sold $1M of their game and a few other perks for the customer and developers. Overall people were all for this and they wanted Epic to do well as it would be a kick up the arse for Steam and at that time that is exactly what Steam needed. I was one of these people. Valve had been resting on their laurels a bit too much at that time. As I said Valve has been shaken up by these launchers, but not because they were a threat but rather because they seemed to come out of their slumber and add to the storefront. Since then, there have been numerous updates to Steam and Big Picture, Valve released the Steam Deck and there are rumours about another go at the console space and a new controller. They have created Steam OS which seems to be universally loved by many people wanting to remove themselves from Microsoft’s domination of the OS market and Windows infinite bloatware. People are installing Steam OS on any device they can, from handhelds (removing Microsoft’s new paired down Windows in favour of Steam OS on the Xbox Ally devices) to their daily driver PC. They are praising its paired down, bloat free system that is lean and less resource intensive and this is something Microsoft is now trying to emulate. The fact that Valve has taken Lynix and created an OS that rivals Microsoft’s Windows (in the gaming space at least) should tell you something about Valve’s ethos. Basically, they woke the beast that is Valve.
What amazes me every time something like this comes up, people almost universally defend Valve and Steam. This brings criticism of fanboyism towards steam, but my experience is people on PC want competition and want Valve to be pressed. The harder the better. If this is Valve’s response to half-baked useless storefronts, imagine what would happen if they had some actual serious competition? This is why PC gamers do not understand console fanboyism. This should be what you want. PlayStation fans should want Xbox to do well, and Xbox fans should want PlayStation to do well. This is the end result of good, hard competition.
They recently released a beta where new releases are displayed on a calendar, so new games are easier to spot. There are different ways to sort these releases, and they can be tailored to you individually based on past games you have played and games you have wish listed. Last year 18 965 games were release on Steam with over 14 000 released so far this year. Although indie titles dominate these numbers the discoverability of any game on Steam has fast become an issue. With so many good games not doing well only for people to find them later and bemoan its loss this is something Valve has been working on. This is an example of Valve innovating, not for their sake, but for the sake of the developers and the consumers. Sure they could end up with more sales, and indie devs are more likely to use them, but in essence it is beneficial for the developer’s discoverability and customers being able to find great games. They do need to do something about the slop that can appear on the storefront, but I believe there are metrics behind the scenes that filter this out in time. Not perfect, but a solution and there is after all a game for everyone and a someone for every game.
Back to Ethan Evan’s and his LinkedIn post. He stated that Steam dominates even as a small company (Valve has an estimated staff of 350 or so with only around 80 working directly on Steam itself). He also stated that ‘we underestimated what made consumers use Steam. It was store, a social network, a library and a trophy case all in one. And it worked well.’ ‘The truth is that gamers already had the solution to their problems, and they were not going to switch platforms just because a new one was available.’ Whereas the last statement has some truth to it, I still think it missed the point and again C-level execs not understanding the consumer needs. People will switch platforms, or at the very least use another platform at the same time, but that platform has to be, at the bare minimum, equal to the platform they currently use. People flip flop between PlayStation and Xbox all the time (agreed less and less these days) and they go where they are offered what they want. All these other competitors to Steam don’t even offer the same service and quality as Steam and expect people to use them. Like he said, gamers already had the solution so why would they go anywhere else? This is where the Epic Game Store offering developers a bigger profit split was a selling point. These are the incentives that will entice people to use your storefront. You should not try to compete with Steam on the whole but win incremental battles on individual titles. When Alan Wake 2 came out, offer Alan Wake in the bundle for free. Don’t make it an exclusive as you are cutting off your nose to spite your face.
Sony recently said that PC was an important part of their plan (one ex-exec stating it was like printing money). They even stated that they had ‘high hopes’ of enticing people away from Steam and have repeatedly said they will entice them away from their PC to the PlayStation ecosystem. Speak to any PC gamer and they will tell you this will not happen. I think (and hope really) what they meant was they would entice the PC gamer to buy a PlayStation as well as their PC, but I have my doubts. There is a certain arrogance to C-level executives of gaming companies that they know what people want and this is regularly shown up (Concord anyone?). This seems to be the case here as well with all the launchers that try to emulate and surpass Steam as a platform. This of course leads to the accusations of Steam having a monopoly. And as usual Gabe and Valve have been quiet while he sits on his yachts, and they plug away at Steam and Valve products. In a way they remind me of Nintendo. Hear me out! They just don’t follow what everyone else does. They lead by ignoring what others are doing and do the things they know people want. No one would have seen the switch coming and being a success and the same can be said for the Steam Deck. When it came out people laughed and repeatedly said ‘who is this for’ and now people suggest it over the more expensive and more powerful devices. It is seen as the leader in the PC handheld space and the Switch is outselling all the consoles hands down with the Switch 2 is outselling that.
Post-Gabe Valve and thereby Steam is a worry, but I believe that he would sort it. It seems Gabe has a plan for everything. It wouldn’t surprise me if he has a successor lined up (they are already probably running the company). Most valve employees tend to hang around. The average stay as an employee at Valve is 10+ years way above the average in the tech world with many core developers being there since the late 1990s. But I think people’s concerns are that at some point someone will take over and open the company up to the stock market and investors and that would be its downfall. I think Valve has proved the benefit of the flat structure they use for employees, higher than average wages including profit sharing as well as a small stable workforce.
To end I would like to say that I hope someone comes and actually competes with Valve. There is nothing but benefit for us as consumers if this happens. Valve has market dominance and market share due to being the storefront people want to use and ensuring they have the tools necessary to buy games and play them and mostly because the competition is appalling and suffers from hubris. Valve has built its reliability on years of hard work, innovation and iteration. Any company who wants to compete with them, has all this available to them to work off of. All they need to do is put in the extra work to innovate on Valve’s blueprint.