Steam defines the modern video game industry
Children, gather together and let me tell you a story about the old bugaboo we used to call DRM.
Digital rights management was the beast under every gamer’s bed in the mid-2000s, an invisible piece of software embedded in game discs to control and track player behavior under the guise of preventing piracy. DRM software like SecuROM limited the number of game downloads and forced players to regularly connect to the Internet for authentication checks at a time when less than half of U.S. adults had reliable broadband connections. DRM features reduce the quality of distributions bioshock, Mass Effect and sporeby 2010, anti-piracy software had emerged Assassin’s Creed 2 and Splinter Cell: Conviction can not play. When Microsoft attempted to release an Xbox One with always-on DRM functionality in 2013, intense criticism from fans forced the company to change its plans at the 11th hour. There are lawsuits. DRM is a curse word.
Meanwhile, Valve is developing Steam.When it launched in 2003, the digital PC storefront was designed to streamline the patching process for games, e.g. counter strike Make it easier for Valve to implement anti-piracy and anti-cheating measures. Steam is designed to be a DRM machine. In 2004, with half life 2, Valve made Steam a requirement for every player, and even those who purchased a new physical copy of the game had to launch the launcher first.There are some low-level complaints, but computer gamers are used to being lab rats, and half life 2 Enough to drown out objections. Steam adoption has exploded. So, naturally, Valve turned it into a third-party game store.
While other publishers compete with players for DRM functionality in individual games and consoles, Steam is quietly adding dozens, then hundreds, then thousands of games every year. Today, Steam has 132 million monthly active users and approximately 103,000 games, more than any other major distribution service. Almost all of these games can only be played when connected to Steam – even after paying full price, even after downloading, and even in offline mode. But that doesn’t stop Steam from becoming more important to more players every year.
“Competition is good, but there is no competition in the PC market.” Super Meat Boy co-founder Tommy Refenes told Engadget in 2018. “Steam only.”
The widespread adoption of anti-piracy software marks an era in video gaming where players feel like they don’t actually own the products they buy. Then the practice became the norm. Broadband saturation continues to climb, the physical media market turns to pixelated dust, and streaming entertainment media finds its footing. Today, Xbox, PlayStation, Nintendo, Epic Games and most major publishers have their own digital stores with proprietary DRM capabilities. However, Steam is the largest DRM machine in the industry because it is the most popular digital game store. If the past 20 years are any indication, that’s not going to change anytime soon.
Did you hear it? It’s the sound of our collective Steam library, representing trillions of dollars’ worth of purchased games, that makes us breathe a sigh of relief. Because if Steam disappears, so will all our games.
It’s a chilling thought – Steam’s demise would cause immediate and catastrophic disruption throughout the video game industry, destroying players’ libraries and cutting off one of the most direct sales points for developers of all sizes. Steam feels too big to fail, and Valve runs it as such. Valve is a private company valued at $6.5 billion 2021, Chief executive Gabe Newell is a billionaire himself. The studio is similar to Nintendo in that it’s able to ignore gaming trends and continue to do whatever it wants at any given time, while Steam prints money and its most ardent fans cheer the studio on with friendly memes. Hooray, Gaben!
Steam promotes a 70/30 revenue split, giving developers on the platform 70% of the revenue generated by their games and pocketing the rest. Apple and Google have copied this formula in their mobile app stores. When it debuted in 2018, the Epic Games Store built its entire marketing campaign around challenging Steam and scrapping its revenue share ratio, claiming it was exploitative and unfair, especially for indie games. Epic offers an aggressive 88/12 split to each developer, and CEO Tim Sweeney dared Valve to match it.
Valve barely blinked. The studio has slightly changed Steam’s payment plans, offering a 75% discount on games that make more than $10 million, and an 80% discount on any game that makes more than $50 million. Epic eventually turned its attention away from Valve and toward a more vulnerable target in the revenue-sharing world: Apple.
“If you were running a store with no competition and making billions of dollars a year, how much time and effort would you put into making it better?” Refenes asked during the launch of the Epic Games Store in 2018. “If the end result was that you could make the same or maybe less money, how much would you spend to improve the experience for everyone who uses it? My answer is, minimal time, effort, and money.”
As Steam ages, Valve has no longer interfered with Steam. In the early days of the platform, developers would pitch their games to actual people at Valve, who would roll out items on the storefront every week to ensure each game got enough attention. For small studios, getting a game on Steam is like hitting the jackpot. That changed in 2012, when Valve implemented Greenlight, a process that allowed players to choose which games would come to Steam (after developers submitted a $100 entry fee). Greenlight eventually evolved into Early Access—a system that still exists today and is the standard on other platforms—and the number of games on Steam grew astronomically in just a few years.
According to Steamdb, 435 new games were added to Steam in 2013. In 2017, 6,947 new game models were added. It’s a tumultuous time for developers, especially those who started making when Steam was just a curation space, but ended up releasing their games into an unregulated and oversaturated market.
Indie developers Ben Ruiz and Matthew Wegner set out to create this stylish fighting game Aztez In 2010, it received a lot of hype ahead of its release. Aztez It was finally launched on Steam on August 1, 2017, but immediately disappeared from the crowd.
“There are 40 other games launching on August 1,” Wegner told Engadget in October 2017.
Ruiz added, “If I’d been paying attention to Steam, maybe I wouldn’t have been so blindsided by what happened, but I’m not necessarily sure what I would have done differently. If I’d known earlier, oh, the market is saturated now— — What the hell are you going to do? … There are a billion indie games released on Steam every day.”
Today, Steam is a self-sufficient game publishing machine, with over 100,000 games and counting. Getting onto Steam no longer means instant success for any developer, but it is a necessary part of most publishing plans.There are other options: GOG, by that wizard and Cyberpunk 2077 Publisher CD Projekt is one of the few digital publishers committed to purchasing DRM-free games; large publishers such as Ubisoft, EA, and Microsoft all have Steam-like storefronts, and the Epic Games Store provides developers with generous revenue shares. Still, giants like Microsoft and EA still find it necessary to simultaneously release their games on Steam, and in the process give Valve a cut of every purchase.
As a private company making tons of Steam cash, Valve has the freedom to operate on its own schedule. The company is known for its flat hierarchy with no strict management structure, encouraging developers to work on projects that they enjoy or just follow their passions.
So Valve is an extremely wealthy company that doesn’t produce much. Its games are legendary, but there’s a running joke in the industry: Valve can’t count to three: Half-Life 2: Episode 2 and Team Fortress 2 It came out in 2007. Left 4 dies 2 It came out in 2009. Portal 2 Coming out in 2011, VR game in 2020 Half-Life: Alyx The entry-level headset to Valve’s Index headset launched last year for $1,000.The studio is still ignoring a devastating robot invasion that begins to consume TF2 In 2020, despite the constant pleas for support from enthusiastic players. In December 2023, Valve replaced Counter-Strike Global Offensive and Counter-Strike 2interrupt one ESL Pro League In progress.
Meanwhile, many of the writers who helped create Valve’s most iconic franchises left the studio around 2017 after years of inactivity. In 2018, Valve hired all 12 developers firewatch Campo Santo Studio was working on a new game that looked really cool. In the Valley of the Gods. There have been no updates from the team since then.
Steam’s unwavering success has helped turn Valve into an exclusive resort community for computer science fans, where game developers can spend their final years in an unsupervised environment with excellent amenities. It’s a beautiful scene, really. It’s just not particularly efficient.
Matt T. Wood spent 17 years at Valve, helping to build left 4 Dead, Left 4 dies 2, Portal 2, Counter-Strike: Global Offensive and two episodes half life 2. He left in 2019 and is now preparing to release his first independent game, kitten, big city.
“Valve says a lot, like, you can do whatever you want,” Wood told Engadget in 2023. Valves have directions, and they also have trajectories. So, for me, I realized that the direction Valve was going in was not the direction I wanted to go in the long term. … They’re kind of stuck in their ways, like they’re not really challenging themselves or taking risks or anything. Steam makes a lot of money, so they don’t really have to. “
kitten, big city Of course, it’s coming to Steam soon.
Valve is very good at making money off other people’s work, and Steam is the epitome of this specialty. The company did the same thing with Steam machines back in 2014: Valve created a Steam controller, but it never actually built a Steam machine. Instead, Valve licensed its name to PC manufacturers, and those companies then built the boxes that delivered Steam into people’s living rooms. Valve lowered manufacturing costs while gathering market data on actual demand for quasi-PC and quasi-console hardware. Valve never ended up making its own box (unless you think of the Steam Deck as a Frankenstein hybrid of a Steam controller and a Steam machine, which I do).
The Steam Deck is Valve’s most exciting product in decades, largely because the company seems committed to improving and supporting it. After Index, Valve seemed to be giving up on VR hardware, but less than two years after the Steam Deck was released, Valve dropped an OLED version with a gorgeous screen and other improvements.
Of course, Steam Deck is all about Steam.like half life 2 Back in 2004, the Steam Deck was a clever strategy to get more people to sign up on Steam. The Steam Deck was positioned to dominate the handheld market by 2024, and it came with Steam.
Today, digital distribution is the backbone of the industry (which I guess makes DRM a spine), and Steam is the undisputed leader in the space.
Steam’s legacy is a vast and diverse gaming landscape, serving millions of individual libraries with thousands of games — all of which could disappear in an instant if Valve decided to discontinue, sell, or pivot. This is a store that has set the standard and refuses to stop growing. Entire studios of artists and writers were devoured, and beloved franchises were left to rot. This stranglehold allows Valve to ignore market pressures from consumers, creators, and competitors.
Behind the scenes of the video game industry, Steam is constantly stirring things up and powering everything.
celebrate Engadget’s 20th Anniversarywe take a look back at the products and services that have transformed the industry since March 2, 2004.
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