GamesBrief ran a piece last week with the somewhat hysterical title “Five Reasons why Steam will Destroy the PC Games Industry.”
In a word: it’s a monopoly. Or it’s fast becoming one. And monopolies, historically, are dangerous, regardless of industry.
Is Steam a monopoly? Well… depends on your definition of the word. It’s definitely close. Services like GameTap, Direct2Drive, Impulse and so forth make up a minute fraction of the digital distribution business, while Steam completely dominates the space. The key question is whether it can count as a monopoly when it still competes with retail, and/or whether it’s possible to monopolize a subsegment of distribution – i.e., does the fact that Steam is in digital distribution mean that it monopolizes that and does not compete with boxed retail? I have no idea.
I love Steam. I really do. I mean, I disliked the whole idea of it when it came along, and the service was kind of a joke for about a year after launch, serving as nothing more than a Half Life 2 reseller. Then all of a sudden it went crazy and you can get practically anything on it. It does auto-patching, so my games are always up to date; it supports mods, so titles like STALKER and Oblivion are easily tinkered with; it has outrageous sales; it’s easy to use. I’ve never had a problem with it. And Valve’s behavior isn’t very monopolistic. Prices are fair, developers get a far greater percentage from Steam than they do from traditional retail publishing contracts, and indies have the opportunity to put their game in front of 25 million subscribers.
But just because Valve hasn’t acted like a monopoly so far doesn’t mean it can’t or it won’t. As the GamesBrief article points out, there’s nothing to stop the company from refusing to carry a game that’s too much like Half Life, for example; or arbitrarily cutting the revenue percentage it offers developers. Heck, there’s no reason that Valve couldn’t double the prices of all its games, or establish some horrifying DRM scheme, or announce that for every game it sells, it will donate a dollar to the Extinction for Puppies or Breast Cancer Is Really A Good Thing movement. I don’t really expect this, but just as the implied invasion that is Ubisoft’s DRM makes it unpalatable, so too there is a bit of discomfort associated with the fact that Valve could do these things.
Call me hopelessly tenderhearted, but despite all lessons from history I really like to believe that it’s theoretically possible for companies to behave decently, even when they monopolize something. Google and Valve both seem – so far – to be organizations that want to do right by people. It’s as if they recognize that they already have enough money, and that doing something nice won’t hurt them. And I also like to believe that if some companies start behaving this way, others will follow suit. Sort of a kinder, gentler capitalism. After all, Valve has never, never ignored the will of its customers, to the point of even talking openly with those fools who wanted to boycott L4D2. Most other companies don’t do that. And while I’d very much like to see Valve take a stand against draconian DRM – like refusing to carry Ubi games – I don’t really fault them for not doing so. There’s being good to consumers and there’s simply going too far.
Is Steam a monopoly? By the letter of the law, I really don’t know. In reality, almost certainly. After all, it controls something like 88% of the digital market, and while not every publisher distributes its games on Steam, those that don’t are cutting themselves off from a critical channel.
Steam was not first to market for digital distribution; Direct2Drive and GameTap were both years ahead. And it’s not a monopoly because of underhanded practices. As far as I can tell, Valve has never done anything unethical in its handling of Steam. No, the service is a monopoly because it’s the easiest to use, it has the widest selection and the best prices, and, frankly, people trust Valve.
Don’t get me wrong, I trust Stardock too – but I don’t use Impulse. Not because I’m pro-Steam, but simply because it’s a pain in the ass to use, and its library doesn’t contain much that, well, that I can’t get on Steam.
Steam has competition – retail, of course; all the other digital services, plus PSN and XBLA, GoG, the App Store, and Google’s strongly-hinted-at platform. What it’s done for the industry has, in my opinion, so far easily outweighed any possible evil it can commit. While that perception may change in the years to come, I tend to think that alarmist claims about how a service is going to destroy an entire segment of the industry are a bit much. After all, so far Steam’s given the PC games industry a needed shot in the arm. I hope that never changes.
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