245: Steam: A Monopoly In the Making

[KiKiweaky]

Brrr thats a chilling thought alright. A valid argument, but the fact that they have done nothing wrong means nothing much can be done about it right now. The goal of most companies is to become a monopoly I would imagine, I mean why wouldn't they want that.

It becomes a problem when they start to inflate prices simply because they can. Steam is expensive enough as it is, they charge the exact same amount as most of the game stores, or a lot less when they have offers up. I use em because I just dont really want to get the game from ebay.

Just a question do Steam users in the states pay the same amount for their games that others are paying relative to exchange rates? Living in Ireland I had to for out 50 euro for the latest avp game(well 49.99) which would be $68.68.

 

[Flying Dagger]

I don't think it can be a monopoly when it will always have to compete with games retailers.

I've also spoken to industry analysts on a major GAMEs company here in the UK which I CAN'T name, some of the most trusted ones too, and they informed me that most people do not want to download a game over the internet, but prefer to dip in just before or after work, or on their lunch break. If you have a shop placed in a hub or nearby workplaces, it becomes less of a hassle to pick a game up then to download one.

The problem comes with where you lay your definition of market... Cadburys have a "monopoly" on selling the product "cadburys creme egg" but that isn't, by many peoples definitions a "monopoly" as there are still many alternatives.

 

[vshade]

I tried to use the direct2drive and the gametap, direct2drive couldn't sell the games I wanted here in Brazil and gametap didn't work well with my windowx 64

 

[fisk0]

It depends. If all digital games were cheaper, then there'd be no reason to produce physical ones. Monopoly again.

That depends on what they ship in the physical box. Once upon a time you used to get printed manuals and stuff in the boxes. Some games still do that, occasionally with other bonuses, like how you got a CD single with Mirror's Edge (and it only cost 10? in stores too). Persona 4 and Titan Quest also shipped with soundtrack CD's. That's added value that I think it's worth paying a little more for (but not much, not like those limited collector's editions which cost double the price of the regular game, but a few dollars more than a digital copy).

 

[iburns]

I love Steam. I can buy a game in a brick&mortar store (Modern Warfare 2 as my most recent example), enter the serial key into Steam and now I can play that game anywhere I want and on any computer I want as long as I have an internet connection.

Blizzard has gone a similar route with the new Battle.net, I can download all my Blizzard games anytime and anywhere.

I think these systems as they become increasingly intrusive will continue to provide reasons to avoid PC gaming at all costs. Console games are not a whole lot better, but at least if your console gets bricked you don't lose all of your personal data, essays, work info etc.

Huh?

 

[The_root_of_all_evil]

That depends on what they ship in the physical box. Once upon a time you used to get printed manuals and stuff in the boxes.

Agreed, and it's a shame that most of these have seen to drop to PDFs; but unless you're selling a reasonable quantity of physical games, then there's not much of a call for them. Look what's happened with the numerous game shops around the country where the PC section of the shops has dropped to one shelf. Physical PC games are being lost because they aren't keeping up with digital selling. Console physicals are still around because there ISN'T a system equal to Steam. (PSN, XBL don't allow for free DLC etc.)

I think these systems as they become increasingly intrusive will continue to provide reasons to avoid PC gaming at all costs. Console games are not a whole lot better, but at least if your console gets bricked you don't lose all of your personal data, essays, work info etc.

I'd have to echo the "huh?" on that one. If your console goes down, you lose everything on it. If my HD overheats, I can at least save some stuff, or back it out to GoogleDocs.

 

[Moriarty]

I think it's worth it.

Steam may form a monopoly in digital distribution, but at least it provides good service along with it. It keeps strange drm schemes at bay and provides many other benefits, which may help digital distribution gain a bigger share of the market.

 

[Earthmonger]

Thanks to my rather shitty and unreliable ADSL internet connection, Steam and other DD systems have never been a real option for me. No broadband provider wants to shell out the resources for this area, citing low pop density and poor returns. I'm a minority, I know, but I'm certainly fighting the move to DD and net-dependent systems. And I'm getting tired of having to locate hacks to bypass such measures on software I have legitimately paid for. (But oh yeah, I'm a pirate, keep calling me that you asshats.)

Digital Distro can burn in Hell. Internet connectivity for Single-Player games can burn with it.

I forgot my point. Ah well.

 

[fisk0]

Thanks to my rather shitty and unreliable ADSL internet connection, Steam and other DD systems have never been a real option for me. No broadband provider wants to shell out the resources for this area, citing low pop density and poor returns. I'm a minority, I know, but I'm certainly fighting the move to DD and net-dependent systems. And I'm getting tired of having to locate hacks to bypass such measures on software I have legitimately paid for. (But oh yeah, I'm a pirate, keep calling me that you asshats.)

Digital Distro can burn in Hell. Internet connectivity for Single-Player games can burn with it.

I forgot my point. Ah well.

Yeah, I can understand that viewpoint. My ISP is fairly unreliable, so I occasionally end up not being able to play _single player games_ because the connection is down.
I'm very interested to see what happens with many of my more recent game purchases in the future, given how seemingly unreliable Electronic Arts are, with giving up online support for games that are barely 2 years old, it will be interesting to see if there will be any legal way for me to install some of my EA games in 5 years, because they've taken down their authentication servers or something.
At least Steam has 'promised' that in the event their service goes down, they'll make sure that games you've bought through the service (at least have downloaded and installed) will get their Steam dependency patched out. EA has - to my knowledge - not made any such comments.

 

[Epitome]

I find myself constantly questioning anti-competitive law in this area, I understand that competition is good and brings benefits to the customers. But I can see an imaginary point where the company offering the best possible service to customers is then accused of being anti-competitive. Anybody who has ever played Sid Meiers Alpha Centuri may rememeber a quote that appeared when you advanced a certain economic tech. It was

"Of course we'll bundle our MorganNet software with the new network nodes! Our customers expect no less of us. We have never sought to become a monopoly. Our products are simply so good that no one feels the need to compete with us."

This to me seems to descibe the Steam situation, while I dont largely partake of digital distribution because I disagree with it fundamenatly from what I read Steam offer hands down the best service. So long as they are kept in check by law, but not punished by it then maybe its companies like Direct2Drive who are wrong. If i set up a lemonade stand but couldnt turn a profit I wouldnt be suing Club lemon now would I? If you chose to provide a service you must have a competitive advantage of some description, but dont ***** and moan because somebody can do it better than you.

 

[matrix3509]

I never really understood the whole "Microsoft evil empire" thing. Isn't it the desire of every business to dominate its respective market?

 

[Monshroud]

It delivers, it integrates into your games like a virus onto your PC and it keeps bugging you like one. start your game and steam activates and connects to the net, but when you quit your game, steam stays active and thinks it's fun to throw some adverts in your face while your at it. I dont know about you, but i usually buy stuff to get rid of advertising. Not get some extra. Not to mention, what happens when your internet connection goes down or resets itself? So much for playing your games off-line. And what if the steam-servers go down?

The advertisements you are seeing happen when you launch Steam, regardless of how it launches. If you just start the Steam client, it logs in and if there are any sales or new products being offered they pop up a window about it. You just click close if you don't want to see them. You're making that sound like a much bigger deal then it is. There are websites that have pop-up windows that show advertisements for their latest sales and offerings too. Just saying I think you are making a mountain out of an ant-hill.

As for what happens if your Internet connect is down or the Steam servers are down.. Well you launch the game and it runs... As long as the game has been previously authenticated, then it will launch. Now if you just installed a new game and your connection was down, it would not launch and I fully agree that would suck. Steam does have an offline mode. I use it on my laptop while on trips.

 

[jetsetlemming]

What exactly would you expect Valve to do? Undercut their business, which is already a far smaller portion of the overall market than any retail chain, in the idea of some vague future where digital distro is the norm? That's just stupid. If Valve limits themselves now just so Stardock and IGN can play catchup, that DD future may never come. Valve's in a position to try and draw purchases away from Gamestop. Direct2Drive isn't.

 

[Whispering Death]

Response: This Article Reflects an Extremely Poor Understanding of Monopolies.

First off, you need to look at the competitors. Steam may be a large digital distributor of gaming content but it is in competition not only with digital distributors but with all distributors of content. Steam competes with Wal*Mart, Gamestop, etc. Steam is a tiny tiny tiny spec of nothingness compared to the game sales of Wal*Mart. Not only is it not a monopoly, it's really not even significant in the scheme of game distribution.

But the article posits a fear about the future. In this future Wal*Mart won't exist and most of the gamging content will be delivered through the web. Possibly. So let's look at this future.

For a monopoly to exist it has to be sustainable. Just growing big doesn't work. If a big company's competitor is small but satisfies customers better than he does, the customers will switch to the competitor and then the competitor will grow large. The reason Microsoft is a monopoly is because you can't switch, you have no options. If you want to run the hundreds of thousands of computer programs out there you have to pay the monopolist Microsoft. Why doesn't another company make a better Windows? Well, because there's a barrier to entry. The barrier to entry is that it is virtually impossible to create an OS that can run all the programs that currently run on Windows just as well as Windows. Therefore, no new competitor can emerge. The monopoly is sustainable.

Now let's turn to Steam. Where are the barriers to entry in the digital distribution market? Well, a digital product is pretty easy to create - it's not a terribly complicated program: no barrier there. It's also very easy to distribute, gaming companies are tacking on "extra" software such as DRM in their games already.

So, we see that Steam's position in the market isn't infinately sustainable at all. If Steam starts behaving in such a way that make customers want to leave it, any publisher can create a neo-Steam of their own for little capital, distribute it through their games to easily penetrate the market, and capture the value that Steam has lost.

The only reason Steam is the market leader is because there are very few companies in the market and Steam has satisfied the customer's needs the best so customers choose and stay with Steam.

Not only do I predict that Steam will in no way ever be a monopoly, but I bet we will see the opposite. I bet that the digital distribution market becomes very profitible that every publisher will force their own version of Steam onto consumers and demand they instal Ubisoft-Steam and EA-Steam and run it in the background to make the game play. All the publishers will try to create their own product and force customers to instal it and use it in the hopes of capturing a share of the money for themselves.

If only customers could be so lucky as for Steam to be a monopolist...

 

[Heathrow]

It's not a monopoly, there's nothing preventing Impulse or D2D from creating the same style of service which Steam offers they just choose not to, likely because while the DD market is still growing it's more cost effective to fill a niche.

There's nothing about Steam which inherently hobbles competition it just seems that the market isn't big enough for another service of the same nature to go head to head with Steam at the moment. It is possible that it might be in a grey area further down the line but there's really no way to tell if it's going to be a problem until the majority of PC purchases are DD.

More to the point I don't see how games being locked to Steam is VALVe's decision. It's the developers who decide what serial keys unlock which games where, what's preventing developers from allowing their serial keys to unlock games on any DD platform? Quite a few games already allow you to use your store bought serial to unlock your game over Steam, I suspect in the future you will be able to take any of your serials and unlock games on Steam, Impulse, D2D or whatever other services end up being popular.


To the people complaining about having to be online to use Steam: You do know about offline mode don't you? You do know that Steam stays in offline mode until you put it back to online mode even if you restart right? There's nothing stopping you from playing offline as long as you were online once to authenticate and decrypt your game. So, yeah...

 

[Whispering Death]

I never really understood the whole "Microsoft evil empire" thing. Isn't it the desire of every business to dominate its respective market?

The desire of every business should be to service their market segment better than anyone else.

By contrast, Microsoft's strategy is to holds customers hostage.

 

[jamesworkshop]

I never really understood the whole "Microsoft evil empire" thing. Isn't it the desire of every business to dominate its respective market?

Yes but most companies also don't get sued by their own governments.

Offering Steamworks API for free is a real issue that will only be ignored for a time since they are not an important service like utilities

 

[raankh]

Very good article, some interesting responses above too.

The simple solution is to open source the Steamworks API; Valve could fork off a branch and tie that to their services while providing compatibility with the free (as in freedom) version.

 

[lkevil]

edit: I must say I love GOG.com though, there I get to pay the same amount as americans, and don't have to be connected to the internet when playing the games I've bought - but their library isn't very big at the moment.

Steam used to be like that where all the prices were in dollars, so who knows how long GOG will last with US prices. On the subject of GOG they face very little competition from steam as they only focus on old games and as I belive, make sure they work on new operating system, something which steam does not.

 

[Superlordbasil]

regardless the ethics and possible problems a round of applause to valve for perhaps grabbing what could be one of the biggest gaming money bags in its history. If the vast majority of PC gamers went steam wards valve would literally become the PC market and if there was anyway to replicate this in the console market one day then the skies the limit