245: Steam: A Monopoly In the Making

[ThrobbingEgo]

I despise steam, it is everything a digital delivery service should be and should NOT be.
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?

You know you can close Steam and set it so it doesn't launch at startup, right? You can also close it. Right-click on the little tray icon and click "exit." The platform behaves just like your IM client. It lives in your tray.

As for the advertisements, they have nothing to do with how many recent purchases you made. If you didn't buy games recently, it's not going to bug you any more than usual to buy it. It's not ransomware. Steam just, by default, alerts you to new games and sales. I could be wrong, but I think the dialogs aren't even present in the beta GUI.

 

[Worgen]

I really like steam but its definatly one of thoes things I worry about, if valve was run by other people then it could easily go bad, really consumers are lucky that so far its run by people who understand consumers and at least on the outside dont seem to think of us as just giant cows to be milked of money

 

[nonW00t]

Monopoly, eh? Good, more games for me! LOL It's my money anyway. HA

 

[Steve the Pocket]

Considering how few of Steam's games actually use Steamworks right now, that must be 70% of a very small market. Heck, one of my big problems with Steam is that they openly allow third party DRM systems, including the absurdly restrictive ones. On the other hand, it also means I could theoretically move some of my non-Valve games (such as Bioshock) over to a Steam-free machine and still play them. So it's give-and-take.

I like Dizko's comment about Steam as a platform. We're already starting to see the beginnings of this concept -- Steam is going cross-platform, and Games for Windows Live is technically Xbox Live for PC. I could see this being taken to its logical conclusion, with the same game being sold in two versions for the same system: the Steam-free retail version that uses maybe Games for Windows Live for multiplayer and achievements, and the Steam version that uses Steam's multiplayer and achievement system, has no third-party DRM, and is only available from the Steam Store. I sure wish Bioshock 2 had come out that way!

Also, technical error. Half-Life 2 didn't come out in 2003 "alongside" Steam; it came out a year later. I don't know what Steam was used for in the meantime, since I wasn't in the gaming scene back then.

 

[BrianDawg]

Pure Bollocks. Modern Warfare 2 didn't have to use Steamworks, they did because it's an excellent product/service (and from a lesser point, it was less work they had to put into the PC version themselves). You can release a Steam version of a game and a non-steam version if a publisher wants (Torchlight, for example).

Politicians are stupid and run by whoever is bankrolling them, and they'll attack Steam even though they offer a completely OPTIONAL service of Steamworks. In the end, it's up to the developer/publisher if they force Steam on a consumer, not Valve.

 

[Dom Camus]

At the start of this article I was really hoping it would turn out to be about Steam's extreme discounting policy. Remember when "the long tail" was going to revolutionise gaming because all those niche games nobody could afford to write would suddenly become profitable? I look at Steam and see the death of that dream.

Maybe we can have that article next time?

 

[otakucode]

I've always been surprised at how shortsighted people are when it comes to Steam. Other than the fact that you don't have to go to a retail store to pick up a game, can you think of any instance in which Valve chose to pass along the advantages of digital distribution on to gamers? There are none. They could have done great things to bring the massive advantages of digital distro to the gaming industry, but instead they chose at every single step to protect publishers and retailers over the interests of gamers. Why can't you transfer licenses? Why are publishers allowed to implement DRM over and above Steams protection? Why do games cost the same, or often more, than retail? Why did Valve spend thousands of dollars developing a "preloading" system that downloads the game to a paid customers PC and then actively PREVENTS them from playing it until retailers can get their shelves stocked? Why does distributing a game through Steam require negotiating with Valve?

People that think Valve had no choice in these matters, and that they HAD to bend over for the publishers, consider what Apple did with iTunes. Apple told publishers they could not charge more than 99 cents a track. They told publishers they had to sell tracks individually and could not force customers to buy multiple tracks packaged together. They told publishers they could not implement extra DRM. Apple stepped up and forced the publishers to actually take advantage of digital distribution and pass along the advantages to the consumer. Of course, Apple is not perfect by any stretch of the imagination, I am only pointing out their actions to prove beyond a shadow of a doubt that Valve absolutely DID have a choice when they made the decisions affecting the design of Steam.

Because of the presence and success of Steam, if a digital distribution company were to start up which forced publishers to take advantage of digital distributions advantages, they would have a very hard time getting any support. Gamers would likely prefer the service, but if publishers refuse to distribute their games through it, it won't matter. Gamers have shown, time and time again, that they will endure any hardship, bear any burden, and take any insult served out by the game publishers and pay high prices for the privilege of doing so.

Digitally distributed games should be cheap. VERY cheap. Consider what they don't have to do for digital games. They don't have to buy the materials for a box, or cut the materials for a box, or fold them for a box, or glue them for a box, or print the box, or pay to design the box artwork, or buy the materials for a manual, cut the materials for a manual, bind the materials for a manual, staple the manual, design the manual, print the manual, stuff the box, buy the jewel case, buy the covers for the jewel case, press the disc, put the disc in the jewel case, put the manual and case in the box, shrink-wrap the box, load the box on a truck, pay for the gas and driver for hundreds or thousands of trucks, pay for the retail workers to unload the truck, to stock the box on the shelves, to stand around for days and sell the game, to maintain the whole preorder architecture of computers, credit card processing, bonus item stocking and distribution, the marketing materials littering the store. Handling all of this is the domain of publishers and retailers. And none of it is necessary with digital distribution. Retailers are completely unnecessary in digital distribution, and the responsibilities of a publishing house decrease dramatically. And, yet, gamers and Valve are making it so that publishers make monumental profits off of selling digital licenses. And gamers receive far less product when they buy a license, also. They give up the ability to transfer the game to another person, either through selling it used or simply giving it to a friend. They lose the ability to ever alter the files delivered through the service, so in the future when the servers funded by the game house or publisher are closed, the game will become worthless and cannot be adapted.

Retailers try to strong-arm publishers in order to maintain this artificial protection from digital distribution. A digital distribution company SHOULD force a publisher to choose. Either step into the future, or remain mired in the past. Steam offers the devil's deal, though. It allows publishers to get the benefits of digital distribution while not having to threaten their deals with the retailers. They agree to not sell their games digitally for a lower price than retail price, so that the retailer will not be undersold (since a retailer can never compete honestly with digital distribution). They agree to artificially delay the release of their game because it takes so long to produce all of the useless materials, ship them to stores, and put them on the shelves. This greatly amplifies piracy and puts the publishers in an absolutely absurd state where unpaid pirates are able to deliver their product to the fans better than the publisher themselves can, a situation which I think really ought to drive the game creation houses to sue the publishers for breach of contract (but that's another story).

If gamers don't quit buying AAA $49.99 titles from Steam, they will suffer greatly compared to the market they could have if they could only exercise a little restraint. Gamers need to realize what they are missing out on and refuse to accept the overpriced underfeatured situation they are offered, or it will only get worse. Publishers would do well to realize that retail will soon be dead, and go ahead and cancel their contracts with the retailers, embrace digital distribution, insist that Valve implement a system whereby users can transfer licenses amongst themselves, and drop their prices considerably. Right now, they would see doing such a thing as flat out giving up money, which is very shortsighted and ignorant. The performance of other markets show that if they do this and increase the frequency with which gamers acquire new games, they will get a multiplicative increase in their business. If piracy was unable to offer a week to two week head start on distribution and the publisher were the first place to get the newest game from, they would reap huge benefits. The same with making a used games market possible digitally. They see used games as a "lost sale" which is patently stupid. A used game sale is the best possible advertisement encouraging purchase of sequels, similar games, and more games in general. That purchaser of the used game will likely tell their friends about it, leading to more sales. Cutting out the used games market doesn't increase sales, it massively decreases them. When videogame publishers look back in 10 years on the situation today, they will slap their foreheads at how stupid they were. Hopefully they won't be doing that in the presence of a completely collapsed games market, which is where they are headed.

 

[CaptainStupid]

I'm not in danger of becoming disillusioned with Steam in the future, because I'm disgusted with them now. Sure, their sale prices are great, but their customer service seems more like passive aggression. Where's the instruction manual for my new game? "Not our problem," says Steam. Many (perhaps most) games on Steam do not get automatic patching, so when you try to install a patch, it turns out that generic update is incomptible with the proprietary Steam version of your game. Usually the patch will say you don't have the game installed. Meanwhile, that unpatched game is occupying 8GB of space in your Steam directory. I've lost count of the hours I've wasted searching user forums for workarounds to make Steam games work right. Contact Steam with a technical problem, and their response inevitably amounts to, "Not our problem."

 

[carpathic]

They're just games...That was the point.

I lose a game booohooo. But man, my tax returns, photos etc...that stings!

 

[Infinatex]

Direct2Drive... Impulse? I've never even heard of these! I'm not the biggest PC gamer (mainly because my computer just isn't that good) but Steam works fine for me. I've been using it since CS: Source was released and have no intention of moving to another platform (especially now that there will be Mac support!). Things such as creating a Mac version of their client is just one of many successful steps forward in gaming as a whole, a move that will be completely realized by Steam. The fact is that these other companies will eventually decide to push the law in their favor to try to take down Steam, a company that is doing far better then they are through good business practices and smart development. It's pretty sad that we live in a world where people can be punished for success, especially when this punishment is spearheaded by ones who are looking for the easy option, rather then paying the dues and putting that extra effort to make their product unique.

 

[Whispering Death]

Why are publishers allowed to implement DRM over and above Steams protection? Why do games cost the same, or often more, than retail? Why did Valve spend thousands of dollars developing a "preloading" system that downloads the game to a paid customers PC and then actively PREVENTS them from playing it until retailers can get their shelves stocked? Why does distributing a game through Steam require negotiating with Valve?

Along with the writer you seriously overvalue the power of Steam. Steam has to bargain with publishers who might rather just make their own programs just to get the games distributed. Then they have to bargain alongside the retailers that sell the games.

Imagine you are Ubisoft and you decide to let Steam sell the game for $10 less than retailers can profitably charge. What are you going to do when you have Wal*Mart on the phone thretening to pull all your games off its shelves which will cost the company millions and you your job because you'll be fired! What do you do then? Do you think Wal*Mart and Gamestop will just sit by and get undersold by this tiny Valve company?

Valve would be overjoyed to release games before Wal*Mart gets them! Valve would be overjoyed to undersell Gamestop! Valve would kill to be as massive and powerful as Apple and demand publishers bow to their whims. Do you know how much more money they'd make if they got every gamer to buy games from them instead of other retailers? If they even made a $.05 profit on every game sold and be rich beyond their wildest fantasies.

Business is a collaboration. When one party does something that seems odd you need to look at the other parties (publishers, other retailers) to see why the party in question doesn't do things they would seemingly want to do.

People that think Valve had no choice in these matters, and that they HAD to bend over for the publishers, consider what Apple did with iTunes. Apple told publishers they could not charge more than 99 cents a track. They told publishers they had to sell tracks individually and could not force customers to buy multiple tracks packaged together. They told publishers they could not implement extra DRM. Apple stepped up and forced the publishers to actually take advantage of digital distribution and pass along the advantages to the consumer. Of course, Apple is not perfect by any stretch of the imagination, I am only pointing out their actions to prove beyond a shadow of a doubt that Valve absolutely DID have a choice when they made the decisions affecting the design of Steam

Revenues

Valve - $70,000,000
Apple - $49,910,000,000

Apple brings in 715x Valve in money every year.

To put that in perspective:

If Valve was a person, a typical person making $40,000 a year
Apple would be making $28 million every year - which would make Apple of one of highest-paid athletes or CEOs of a Fortune 500 company in the world.

That's the difference in bargaining power.

 

[SaintWaldo]

Mostly repeating what's been said, but this is how I'd say the words my way:

This article really needed to point out that Gabe Newell is a 13-year MS veteran ('83-'96), was a vested MS-Millionaire, and was involved in the first three releases of Windows, so he knows something about not only how IE got wedged into Netscape's craw, but also Look and Feel (the Chicago way!), the Stacker snafu, and probably even the Sekret DRDOBBS DOS Repelling Team. He's got more than enough public ire on display to show intent to monopolize in at least someone's face. We just, at this date, can't quite determine who that would be, and seemingly, neither can Newell. Other than that, nice piece, Mr. Smith.

Also, kudos to and hearty agreement with those pointing towards GoG.com. I love those guys.

 

[Walking_Target]

The problem with considering steam as anti-competitive is that Steam (aka Valve) is not engaging in anti-competitive practices. As it has been stated before, they just provide a better service than their competition.

Not only do you get a way to track 'achievements' and other stats, you have access to game and publisher specific forums, a technical help line and of course, one-stop shopping. Steam also encorporates support for both P2P multiplayer and traditional dedicated and semi-dedicated game servers. Not only this, but there's also automatic patch detection and downloads for multiplayer games (no looking for patches!) and they have done a wonderful job supporting Indie games and the mod community for their own games. Then there's the big benefit - as long as your account remains secure, you never have to worry about lost disks, keys or other problems. They're all stored to your account profile.

This makes for a service that makes sense for most gamers, as most gamers have an active internet connection and there is an offline support mode for those that don't.

Direct2Drive and others just don't have this kind of support, they have not spent the money or time developing that level of support either. It's hard to say that they're being anti-competitive when other services are not offering a product that is on-par with Steam.

There is an argument in that by offering games at a steep discount, they are putting pressure on other services and even traditional retailers - but that's par and for the course. They can offer products at a lower price point simply because they do not have the overhead that traditional retailers do - they also sell a much larger volume enabling them to make profit by volume instead of on a per-piece basis. So even though they offer a game at 66% off, they sell 300%-1000% more units than they otherwise would - especially on older titles - thus making it more profitable for them and offering a better value to the customer

That's capitalism, pure and simple. They have found a way to provide 'the same' product at a better price than other companies in the market, and the unique nature of their offering has attracted publishers to them instead of other companies whose offerings do not stack up.


TLR They are able to offer more to us as customers because they offer a 'better' service. This in turn attracts developers who offer more for sale to us through that service, causing Valve to invest more and make an even better service. They got in first with more and better. Other companies who want to compete have to invest more heavily to bite into that market share.

 

[JakeOfRavenclaw]

Steam and steamlike services have the future, but instead of giving users more control over their games i feel that they are taking it away from us, more and more and all for $$.

This. (Your entire post is great, but I feel that this sums up the situation nicely).

I have a lot of problems with Steam. It's essentially online-required DRM, which, as someone who's family only recently got high-speed internet, I don't consider to be a good thing. (Oh, and I have to connected the internet to switch to offline mode? Does that make any kind of sense?) But more importantly, Steam requires me to run games that I bought the physical versions of using third party software that I don't want. I don't care how good it is, if I don't want to use it's features I shouldn't have to. Compare this to D2D or GOG, which allow you to do whatever you want to your games once you've downloaded them. You need a client to download, but that's a part of buying games digitally. What shouldn't be a part of this is mandatory third party software...

Someone made an interesting comment about Steam essentially being a console. That's a good point. If we accept it as true, it means that Modern Warfare 2 hasn't actually been released for PC. Interesting. Personally, I'd rather play PC games than Steam games. Steaworks denies me that choice.

Gah, I'm probably not even being coherent. I never post here, but Steam really annoys me. Peace.

 

[JakeOfRavenclaw]

Not only do you get a way to track 'achievements' and other stats, you have access to game and publisher specific forums, a technical help line and of course, one-stop shopping. Steam also encorporates support for both P2P multiplayer and traditional dedicated and semi-dedicated game servers. Not only this, but there's also automatic patch detection and downloads for multiplayer games (no looking for patches!) and they have done a wonderful job supporting Indie games and the mod community for their own games. Then there's the big benefit - as long as your account remains secure, you never have to worry about lost disks, keys or other problems. They're all stored to your account profile.

The problem is not with the service that Steam offers (although I have a number of gripes with their service...) The problem is that it's a service which users are forced to accept in order to play certain PC games, whether they want to or not. The problem is that regardless of how good the service is, it's still being installed on my machine against my will. If I don't want to use it's features while playing my games, I shouldn't have to.

 

[Tommy_Dizzle]

I can see how this might be annoying or daunting to anyone that doesnt have steam, but I cant see anything wrong with it from my point. If I buy a game that isnt from the steam store, I normally add it to my list anyway because I love the interface.

 

[Walking_Target]

"Service Against Your Will" is a red herring. You have the choice to buy the game or not, moreover it is not Valve who decides what 3rd party publishers use for DRM or other copy protection. The onus is not on Valve/Steam, it is on the 3rd party publishers to offer a game through other services.

In concert with this, Valve produces its own games that use the Steam service as a form of copy protection. Disagreeing with them using Steam for this is like telling Blizzard not to run their own servers for WoW; if you don't like what they're using to provide the game then don't buy into it.

Again, it's not like Valve is telling Activision/Infinity Ward that they have to use Steam. Those companies chose to go with Steam on their own.

That's not to say that there are not problems with Steam, however that's neither here nor there. They're not activly trying to discourage competition.

 

[the_carrot]

So after reading this I decided to write Gabe Newell. This is what I wrote, sans my signature:

Hi, I don't write you that often, but I was curious if this guys claim is true. That once you choose to use steamworks you cannot use other digital distribution services to provide dlc, updates, etc. I have to say if it is true, you guys have dipped into the realm of being shitheads. Being anti-competitive, especially when prior to this I've been pretty happy with your behavior as a company, makes me feel like I'm seeing the dark side of your company. Though that's probably a good thing in the long run.

I've been using steam for a while now for almost all my game purchases, and have been really happy with the service. And I do think you provide a good and useful service with steam. I've rarely had a problem playing when my connection is down, though it is rare for my connection to be down I admit. I'm glad to get updates through your service, it's a hell of a lot more convenient and preferable to hunting them down and subscribing to a file host. But that stuff isn't the issue. I'm pretty sure that digital distribution is going to be the way this is done in the future, and I'm all for that. And you really are a pioneer in this field. But taking advantage of the relative lack of attention it gets from any sort of enforcement body is fucking lame. And being pioneering in this field doesn't give you that right. You are not entitled to all of the cake. You already enjoy a lot of it, and though it isn't the predominant method of distribution...yet, I think you need to think about it. Before you do something evil.

I sort of doubt you will reply to this. But I sort of hope you do. I'm hoping even more that what he printed in his article is incorrect.

link to article


and his subsequent reply:

I haven?t read it yet, but that doesn?t sound accurate. I?ll check it out.

We?re huge fans of open. We love the PC; we love the Internet; and it?s why the Mac is attractive.

We are the same people we have always been.

Gabe

For the moment, I'm giving them the benefit of the doubt, though I get suspicious too when the possibility for something like this to happen comes up.

Edit: I scoured the valvesoftware site for the steamworks agreement, couldn't find it. I think you have to be a developer that they are considering helping with distribution to get a look.

2nd edit: Surprised given the articles claims and tone that you didn't mention the steamworks/epic software deal.

 

[Overlord59]

It does seem as though the market is heading towards a Steam based monopoly. While I like Steam and use it (very) regularly I do use Impulse as well. I feel it is a shame that it seems as though Steam (and Valve) will control this because in my opinion Impulse and Stardock provide an excellent service which is just as good. Although, as shown from the article, this does not apply to the publishing side of things but the fact that this is a deciding factor for digital downloads to everyday people seems unfair to Valve's competitors.

 

[Miral]

The problem isn't with Steam, it's with the publishers who are choosing to use Steamworks for games not distributed over Steam.

These things should really be regarded as platform-specific -- you buy a game over Steam, it uses Steamworks. You buy it from GFWL, it uses GFWL (shudder). You buy it from Impulse, it uses Impulse. You buy it on disc, it uses Safedisc or something like that. You should never ever have a game bought over Steam that uses GFWL or Safedisc, or one on disc that uses Steamworks. If that happens then it's just a sign of lazy publishers.

Of course, this'd be a lot easier if the people creating these platforms got together and created a common interface library, to make it easier to plug each individual platform library in. (Heck, another advantage of that might be to simultaneously -- but optionally -- link games to all the platforms at once: buy a game on disc, it doesn't install or require any other platforms, but if you *already* have Steam or GFWL then it registers itself with them and lets you save games to the Cloud or get achievements recorded against both of them simultaneously. Uninstall GFWL and it goes back to only updating Steam; uninstall that and it just records the info locally; reinstall Steam and it re-registers. Etc.)