Well, that’s what you get reading between the lines of Gabe Newell’s keynote at this year’s DICE Summit, which featured the Valve boss speaking about his company’s experience with Steam and how digital-download direct sales are an enormous success. G4 liveblogged the event in loving detail while Gamasutra did an overview of the whole thing. I’d read the whole G4 thing if I were you, if only to have a chuckle at the comment thread at the bottom full of PS3 owners who just won’t let go. However, I’ll pick out the key points – and some exciting percentages – beneath the cut.
The top level trends will be familiar to RPS readers. Direct Download closes the distance between the creators and the audience. Plain DRM actually seems to encourage piracy. (Though Steam is a DRM system – just one which offers a enough bonuses which makes the pill easier to swallow for the customer) Pirates are actually customers who aren’t being served – and arguably the pirates are actually providing a better, more convenient service than actual retailers.
Some fun facts? Well, try these:
- There’s twenty million people on Steam now. That’s 100% year on year growth since 2004. Which sounds like some good year on year growth to me.
- The TF2 updates really pay off, with sale spikes after every update. 106% increase in sales. The ability to gift accounts has lead to a 71% increase in sales. It also helped retail, with revenue increase 28%. Also, a 75% increase in new users of Steam generally. The point I’d take from that is that Valve’s policy of offering more to consumers is actually the smart commerical thing to do, assuming the increase in revenue is enough.
- The sales are having an enormous effect. The recent Left 4 Dead sale lead to a 3000% increase over the previous numbers. That is, more than in the weekend it was released. Plus, another 1600% in new customers to Steam. None of this effected retail numbers.
- One third party game – annoyingly, they don’t say which one – saw increases of 36,000% in a weekend sale.
- The holiday sales lead to interesting numbers. A 10% reduction lead to 35% increase in amount of money which came in (i.e. Not just sales). 25% lead to a 245% increase. 50% lead to 320% increase. And 75% lead to 1470%. Which is an interesting one to interpret in a few ways.
- The people who made the TF2 videos are going to make TF2 comics. Interestink!
- And bloggers are important, apparently. Thanks, Gabe! We think you’re pretty important too.
As I said, it’s worth reading the whole liveblog but lots to think about, if only it’s “I wish I had a lot of money”.
Man, I wish I had a lot of money.
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Yes.
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I didn’t realize Gabe was so ugly and just ugly. But he is rich. I’d rather be not ugly.
@Robin
I’d say that Valve develop for the PC firstly and consoles secondly (other developers choose the reverse) because the PC as platform offers them the widest scope for making the innovative games they want to make without having to curb their ambitions over technical constraints early in the process. The 360 is not a distant leap from the PC in terms of development, so porting is relatively straight forward, where as the PS3 is a completely different architecture, and that requires code to be rewritten. I’m sure Valve could do it, but clearly they’d rather devote their internal resources to developing new content instead.
Feel free to carry on hating on Steam, but be aware that given this is a PC gaming enthusiasts site PS3 fanboy rage tends to fall on unsympathetic ears for the most part.
@Gap Gen
Valve don’t set the price of third party games on Steam, the games respective publishers do (Steam is a game store). Publishers face a challenge over what they can set their prices at that won’t necessarily upset their high street retailers. If there is an issue over their Steam pricing, it’s something you need to bring up with them. Personally I go where the best price is, whether that’s Steam, Play or GAME.
@redrain: Indeed. MS’s consolation prize is that Steam (and its associated games) keeps people tethered to Windows. If the client and all of the games could magically run in Linux, Windows would never again grace my HD.
“As for Steam’s 20m users – how many of those users spend as much through Steam as they would to buy games for a console?”
I conceded that the Xbox’s revenue probably exceeds Steam’s by an oder of magnitude. What’s significant is that Steam accomplishes the same thing as the Xbox but for a fraction of the cost.
Ooooh. Trials2 + Multiwinia+Eeets+Ifluid+Gravitron for £6 something. Good old weekend deals.
To all those talking about the PS3 I will say this: It sucks. A lot. In fact, having worked on the XBox, PS2, Wii, 360, PS3, PC, I can tell you that, by far, the PS3 is the worst of the whole bunch.
The fact I would rather use the 360 devkits (which at my last job failed once a month, every month, for three in a row — the length of my contract there) over the PS3 says a lot.
Come on now, that’s an exaggeration. Yeah, the 360 is a lot easier to develop for, but Nintendo’s tools for the Wii are absolutely horrid. Even hooking up the dev kit is pain in the ass.
Personally, I think people are just too resistant to learning how the PS3 works. Yeah, it’s a very different architecture from previous systems, and using it well requires abandoning some commonly-used programming conventions, but it has a ton of potential when used correctly.
Unfortunately, nearly everything is developed cross-platform nowadays, and the PS3 has the weakest user base. Which means it often ends up not being the lead console, and ends up getting the shaft.
“and the PS3 has the weakest user base. Which means it often ends up not being the lead console, and ends up getting the shaft.”
Good. That’s justice for Sony being massive c*cks about it: “It’s not too expensive – you will want to work more hours to earn one”
C*CKS, I tell you.
Agreed on the Sony are dicks front. The only reason we had the whole Blu-ray Vs HD-DVD format war was because Sony weren’t prepared to play ball with the rest of the electronic manufacturers and agree a common strategy as occurred with DVD. The PS3 was far more valuable to Sony as a means of market leverage (look at our user base) when it came to convincing the film studios to abandon HD-DVD for Blu-ray than anything else at the time of it’s release.
Good. That’s justice for Sony being massive c*cks about it: “It’s not too expensive – you will want to work more hours to earn one”
Trying to ascribe a singular personality to a company as huge as Sony just doesn’t make sense. Hell, one of their major flaws is their inability to have their many divisions work together effectively. Yeah, the system costs too much right now, and that’s definitely part of the reason for their lackluster sales, but saying that they deserve to fail because of one exec’s stupid comment is silly.
Before anyone gets too giddy, just remember that Gabe Newell have been hinting to sell his business to the likes of EA.
@hishadow: [citation needed]
@redrain85
Those numbers are PHYSICAL consoles sold, and not counting wii.
“Feature-length” console games are still sold on discs, and they sells A LOT. It’s more like the traditional PC game sales mode. LIVE provides multiplayer experience (and other things), it does not generated major profits per se, but serves as an incentive to persuade people buy the games. (Actually LIVE does this well, dare I say- even more steamlined than Steam. It’s a major reason why 360 is doing better than PS3). A PC analog would be Blizzard’s Battle.net
LIVE does require US$50 a year if you want to do anything useful with it, which I assume is not too expensive since I’m a 20ish ordinary guy from China and i can afford it
And there is no online DRM on console, you can play a console for its lifetime without connect to ‘net once. Though I worry this may not be the case for future consoles… seen that everything goes online now.
I believe that as long as the business can break even, PC (or console, as it matters..) gaming won’t die, because people do not do everything for EPIC Moneyz, people do things for love, and people love games.
@redrain85
Those numbers are PHYSICAL consoles sold, and not counting wii.
“Feature-length” console games are still sold on discs, and they sells A LOT. It’s more like the traditional PC game sales mode. LIVE provides multiplayer experience (and other things), it does not generated major profits per se, but serves as an incentive to persuade people buy the games. (Actually LIVE does this well, dare I say- even more steamlined than Steam. It’s a major reason why 360 is doing better than PS3). A PC analog would be Blizzard’s Battle.net
LIVE does require US$50 a year if you want to do anything useful with it, which I assume is not too expensive since I’m a 20ish ordinary guy from China and i can afford it
And there is no online DRM on console, you can play a console for its lifetime without connect to ‘net once. Though I worry this may not be the case for future consoles… seen that everything goes online now.
I believe that as long as the business can break even, PC (or console, as it matters..) gaming won’t die, because people do not do everything for EPIC Moneyz, people do things for love, and people love games.
@Gravatar Jante:
http://www.vg247.com/2008/08/21/gc08-one-on-one-with-valves-gabe-newell/
He’s not dismissive of the idea of selling, stating that as long as he is happy they won’t sell. I read that as saying the company has not reached it’s true potential (moneywize).
@YBFELIX
I know. I was considering the fact that every one of those consoles sold is now online capable. Which is precisely why, if Microsoft and Sony wanted to, they could play the numbers games with that. Making the claims that there are 27 million active Live accounts and 21 million active PSN accounts. When we know that’s not going to be the case.
Anyway, it doesn’t matter. My main point still stands. Even if not everyone uses Steam on a regular basis: Valve’s user base rivals each console, easily.
And they probably haven’t even begun to tap their full market potential, yet. Even if a measly 1% of PCs in the entire world are up-to-date and capable enough to play Valve’s latest games, that’s 1% of billions.
Glad to see the return of scary eyes for this article.
20 million steam users is hardly impressive when you realize that anyone can have an account for free and most people have multiple accounts. The reason Valve talks in percentages and vague marketing jargon is to distract people from the fact that they have never released steam sales statistics. And there is a reason for that: they are not good.
People bringing up the consoles are missing an important fact, Steam from the beginning has been playing catchup to Xbox live. Both as a distribution channel (games, patches, etc) and as a community software (friends lists, achivements). It probably never will though because the nature of pc games being open and not standardized means it’ll never have full integration into every piece of software on the system the way xbox live does.
@catska
Most people have multiple Steam accounts? what on earth do you base that on? I don’t know anyone with multiple Steam accounts and I highly doubt most people have them.