Steam: The Friendly Monopoly?
Steam: The Friendly Monopoly?
When discussing the current gaming climate for the online PC market, the word monopoly is tossed around a lot, and in most cases you’ll hear Steam follow suit. Discussions surrounding the topic usually focus on the presence of the monopoly rather than how the monopoly came to be, especially when it comes to examining Steam’s place in the gaming market. A monopoly by definition is the exclusive possession or control of the supply or trade in a commodity or service. Valve by no means holds exclusive possession of the online PC market, but it certainly holds a hefty presence in terms of sales. On average, the number of concurrent Steam users per day is 3-4 million; by these statistics we can determine Valve is the market leader, but for the sake of brevity I’m going use the term monopoly. As I progress through the article I hope your initial impression of the word will change, especially when it comes to understanding Steam’s place in the gaming world.
In the words of Lawrence Lessig:
Before the monopoly should be permitted, there must be reason to believe it will do some good – for society, and not just for monopoly holders.
So is Steam good for the gaming world? I’m somewhat iffy on the answer to the question. After all, how did Steam reach its position as market leader? It found its place through customer loyalty, distribution coverage, image, pricing, profit, and promotional spending. Yet it also grounded itself through the consumers loyalty to the very platform the store is based. To put it simply, as Steam remains loyal to the customer, the customer is more inclined to stay loyal to Steam. With time, a growing library and reassurance of good service, the customer holds a fervent loyalty to the platform which houses all their entertainment in an easily accessible manner. Eventually we reach a stage where some customers will deny other services and products unless it commits to the central hub of entertainment which the customer has become so accustomed to.
This phenomenon fascinates me in that the supplier/hub now holds an inherent value which adds weight to a customer’s decision of purchase. When a PC community sees a product, we sometimes hear the powerful and equally terrifying term “No Steam, no buy”. Powerful in that it demands a quality of service the customer needs in order to buy the product, terrifying in that it shuns smaller competitors who offer the same product with equal if not better service. Take for example the PC release of Dark Souls. When hinting a possible PC version there was a resounding “yes” from the community. When revealed it would require GFWL, there was an uproar of tremendous proportions over the platform rather than the actual product itself. While I agree with the community in this instance, it shows that a quality of service has been set and made mandatory, one which Valve continually improved on and Microsoft ignored (an ignorance they certainly regret today). This set bar benefits all customers and will always benefit the same company who implemented it. We the customer gain from it, but could the bar be higher?
To my earlier point pertaining to competitors offering equal if not better service, let’s take GOG for example. GOG’s products are arguably better, as without DRM you hold full ownership of the downloaded product without the need to stay online compared to Steam’s quasi offline mode (or rather online-then-offline mode). While offering the same product DRM free, a customer used to Steam (not all, I should add) will disregard GOG’s product based on its lack of Steamworks, even though they could still add it to their library. The seasonal sales back the Steam user in this decision, offering the same title at the same if not a lower cost, promising the same title will eventually be added to the hub of entertainment. It’s an effect which in due course traps the customer in a stasis of acceptable service when better service is available; we’re likely to see this change with time, however. Last week, when CD Projekt RED announced they’d be expanding their GOG catalogue, I saw the start of a real competitor to Steam; their one major flaw being their loyalty to old titles. Should they incorporate newer games, I believe they could be a force to be reckoned with, but against the monolith which is Steam I don’t see that happening too soon. Valve is the ultimate first come-first served, and now everyone wants a piece of the pie. It’s the customer who put Valve in this position for their virtue as a private-company bent on pleasing, rather than a money hungry board of directors bent on using the consumer.
So we’ve had a look at the consumer, but what about the developer? I’ve talked to many a developer, and many agree that Steam is one of the better places to publish your game. Though details vary, Steam charges developers around 30%-40% of the profit made on a game, but this rate is unique for each game published on the platform. It also aids new IPs in the gaming world by providing an easy route for indie developers to release their product. With an understandably low-budget, Steam offers an escape from the terrible percentage takes of other publishers such as XBLA. An astounding example of this can be seen with the indie title “Cthulhu Saves The World”. Shortly after releasing their title on Steam, Zeboyd Games announced “Cthulhu Saves The World” made more money in six days on Steam compared to what the Xbox version made in a year. This easy route, while giving us great titles, has subjected the PC community to some god awful games made by developers looking for an easy buck. Take “Revelations 2012” for example, a game with no redeemable features. How Revelations met the criteria and quality to get into the Steam store is a mystery, and a sad one at that when far better indie games are refused publishing for the same position.
Back to the main question I’ve put forward, is Steam good for the gaming world? Yes. Could it be better? Yes. It’s good for the gaming world as it’s found a position (monopoly or not) which doesn’t require bullying your competitors. Instead, its foundation is built on pleasing the customer who in turn won’t abandon them for a better alternative. Though my earlier point still stands, should Valve decide to significantly lower the quality of their service, their large user base will shift to a better service. For this very reason we’re seeing a lot of “friendly monopoly” companies like Google. Either they adhere to the expected standard or we leave. It’s not that “Steam is a monopoly and monopolies are always bad for customers”; it’s “Steam is the market leader by keeping customer satisfaction high via ease-of-use and low prices”. We put Steam on this pedestal of power for a reason, and should it start to neglect us we can just as easily usurp their place with another platform who will arise to the occasion.