By John Walker on November 11th, 2010 at 2:53 pm.
As the trend for PC sales leans increasingly toward digital distribution, with retail stores feeling their age, there are increasing rumblings about the prominence and dominance of Valve’s Steam. Today’s MCV reports, from unnamed sources, that retailers and online rivals are beginning to get a little cross with the requirement to install Steam in games they’re selling, and threatening to boycott Steam-infused games entirely. Games, they say, that require you to install some software that makes their own stores redundant. But are their arguments sound? What’s the real reason publishers are choosing Steam?
MCV claims that “key retailers will drop titles that integrate the popular Steam service as fears mount that the service has a ‘monopoly’ on the download market.” While they don’t identify their sources, the quotes, they say, come from “the digital boss at one of the biggest UK games retailers.” Which means either HMV or Game, basically. “If we have a digital service,” this mystery boss says, “then I don’t want to start selling a rival in-store.” He continues, “Publishers are creating a monster – we are telling suppliers to stop using Steam in their games.”
Equating Steam with iTunes, industry types are expressing concern that Valve’s distribution system will have a monopoly on the market, and thus be able to start controlling pricing. Estimates (which are poorly evidenced) suggest that Steam dominates the market with 80% of sales, putting them in a powerful position of control. Of course, Valve has always maintained that the prices on Steam are set by the publishers, not by themselves.
The key issue is, if you sell a copy of, say, COD:BLOPS from anywhere other than Steam, be it in a bricks-and-cardboard-cut-outs-of-men-with-guns shop, or a rival digi-distributor, you’re selling something that installs Steam on the customer’s computer, and requires that the game be run through Steam. They’re saying they’re forced into selling their rival. This, at first glance, seems a reasonable complaint.
But what’s not being acknowledged here is the reason why games are requiring Steam, and it’s something none of those apparently complaining are offering: Steamworks. Activision or 2K has no commercial advantage in forcing players onto one source for their games, but they certainly do gain an advantage by using the DRM, multiplayer, update system, achievements, etc, that come with running their game through Valve’s grey window.
So when a rival digital distribution boss says to MCV, “At the moment the big digital distributors need to stock games with Steam. But the power resides with bricks and mortar retailers, they can refuse to stock these titles. Publishers are hesitant, but retail must put pressure on them,” he completely fails to acknowledge not only why publishers are picking Steam, but also where his own software is lacking.
More extraordinary is a quote tucked away in a boxout of the print edition of MCV, again from the unnamed digital rival, stating,
“Steam is killing the PC market and it is no wonder digital retailers are failing. Steam is locking down the market.”
Steam, if anything, is surely boosting the PC market, if it’s selling the huge quantities of games its enemies are claiming? Surely no one would make the argument that iTunes is killing music sales? It may be all manners of problematic, and utterly unfair competition, but it’s sure selling a shitload of songs. Steam may well be locking it down, and that’s an enormous issue, but what is the argument for killing it?
Clearly it would be disadvantageous to all (but Valve) if Steam were to take pricing control of distribution, to become something as obtuse and behemothic as iTunes, and there’s reason for analysts and rivals to watch it extremely carefully in that regard. But the arguments being made and widely reported today simply don’t hold up. Unless these shops and rivals can create software that competes with Steamworks, then their demands of unfairness don’t make sense. (And it’s perhaps hard to engage with the high street shops crying foul over PC games, after the derisory treatment they’ve received over the last ten years.) When the alternatives are the widely loathed Games For Windows Live, or the young and unproven Impulse Reactor, it’s no wonder the big publishers are requiring a Steam install to run their games.