Despite facing increased competition in the space, not least from the Epic Games Store, Valve’s platform is synonymous with PC gaming. The service is estimated to have made $10.8 billion in revenue during 2024, a new record for the Half-Life giant. Since it entered the PC distribution space back in 2018, the rival Epic Games Store has been making headway – and $1.09 billion last year – but Steam is still undeniably dominant within the space.
Valve earns a large part of its money from taking a 20-30% cut of sales revenue from developers and publishers. Despite other storefronts opening with lower overheads, Steam has stuck with taking this slice of sales revenue, and in doing so, it has been argued that Valve is unfairly taking a decent chunk of the profits of developers and publishers.
This might change, depending on how an ongoing class-action lawsuit initiated by Wolfire Games goes, but for the time being, Valve is making money hand over fist selling games on Steam. The platform boasts over 132 million users, so it’s perfectly reasonable that developers and publishers feel they have to use Steam – and give away a slice of their revenue – in order to reach the largest audience possible.
It was proposed, but Blizzard rejected it:
Battle.net basically approached the same problem as Steam but from the multiplayer side, whereas Steam approached from the distribution side.
I wouldn’t put it like that. They support Linux to safeguard against Microsoft pushing their monopoly, and they did seem to be gearing up to do just that. Epic had similar concerns, hence the lawsuits against Google and Apple.
How is Linux support pointless? Having more options to play your games is a good thing! I don’t think Heroic would’ve had as much of an impact w/o Valve’s investment into Proton/WINE, and that gives customers a choice on which platform to buy and play their games on. It also allowed for the Steam OS market, and competitors are absolutely welcome to create their own spin with their own store, they just don’t for whatever reason.
Downloading and updating games, for me, is actually the least important part of what Steam offers. I care far more about Linux support (I was a Linux user before I was a Steam user), Steam Input (Steam Deck, and I prefer controller on PC), and consolidating sales to one store. Whether I need to launch it separately or whatever isn’t a big deal.
So because Battle.net failed to predict market correctly 100% of PC gamers are stuck with Steam until the end of the world. That doesn’t change the fact that Valve lucked into the position they are in and was paid billions for this already.
PC gamers aren’t “stuck with Steam,” they very much have options. And Steam is likely way better than whatever Battle.net would’ve become, so I’m quite happy with how things turned out.
And yeah, Valve was quite lucky in nailing the timing, however, that was also a very conscious choice since they filled a need they saw. Valve is perhaps the best company you could ask for to have such a dominant position, pretty much any other company would’ve resulted in a way worse situation for gamers.
PC gamers are stuck because Steam is a self-perpetuating monopoly. If your entire library is on Steam, and Steam has almost all of the games you’ll just keep on buying there for convenience (and that’s what happens, analysts estimate 90% market share). Alan Wake 2 wasn’t profitable until EGS exclusivity expired because gamers opted to wait rather than buy this gem of a game on a different platform (that gives away games like candy).
Even if you think that Valve are just the best, aren’t you worried that having one good option is being one good option away from having no good options?
Well yeah, because EGS sucks.
If you look at Steam’s competitors, none of them are really developing their feature set. So even if customers were dissatisfied w/ Steam, who is actively trying to earn their business?
Sure, I’d love it if another platform stepped up to actually compete w/ Steam.
My expectations are fairly low: it needs to work well on Linux. Heroic largely resolves that for EGS and GOG, but I’m not particularly interested in supporting a platform that only works because some community project has done the work for them. So if GOG supported Galaxy on Linux as a first class citizen, I’d probably still use Heroic, but I’d buy a lot more games from them. But as it stands, GOG is one update away from blocking access to my games through a launcher, and dealing w/ WINE/Proton directly is a pain. EGS is so far away from what I care about that I don’t think they could ever earn my business, but who knows, maybe they’ll surprise me.
But the fact that we’re even having this discussion is a testament to Steam’s success. Heroic probably wouldn’t be a thing w/o Valve’s investment into Proton/WINE, so GOG/EGS wouldn’t even be a consideration for me at all. But since that work was done, I now have more options. I’ve played some GOG and EGS games through Heroic, so it’s not even theoretical, they are realistic alternatives.
It’s important to note that at every turn, Valve has earned my trust. When games are pulled from their store, owners of those games still have access (e.g. I bought Rocket League on Steam, and when they went EGS exclusive, I still had the old version of the game). They have a solid refund policy, and they have gone out of their way to make things more pleasant for their customers. Even if they didn’t have a dominant market position, I’d probably still choose them just based on the user experience. So yeah, not having a realistic alternative isn’t great, but I don’t think it’s because of anything nefarious Valve has done, but instead lack of interest by their competitors.
Your requirements are extremely niche, most gamers don’t care about Linux. Maybe they should have an option of a store that doesn’t charge 30% but is Windows only.
Again, it doesn’t matter if Valve got into a monopoly position fair and square. The moment their monopoly is self perpetuating is the moment we no longer are in a free market where quality and price are main considerations for consumers.
A store charging 30% has zero impact on the end user if the price is the same, which it is in many cases. And popular titles pay 20%, not 30%.
That depends on your definition of “self-perpetuating”.
To me, it’s only problematic if Valve is anticompetitive, such as paying for exclusives (like Epic does), preventing cross-play, or charging a subscription or something for users to keep having access to their games.
Just having a better product isn’t anticompetitive though. I’ve laid out my requirements for a viable competitor, and I’m sure other gamers have their own. If a competitor wants our business, they need to meet our requirements.
I’m glad big game publishers managed to bring it down to 20%, they need all the money they can get after all. Any monopoly, unless it’s a state monopoly in charge of a limited resource, is a bad time for consumers because there is no competition.
But there is competition in PC gaming, GOGA, EGS, and Prime (and others) exist. One player being dominant isn’t an issue if that player isn’t being anticompetitive.
The closest thing I’ve seen is the policy that you can’t sell for less than on Steam, while allowing for sales to happen separately from on Steam. Publishers can even generate keys for free and sell them without any profit sharing elsewhere, and customers can still use those keys on Steam.
EGS is acting more like a monopoly than Steam and undercuts Steam on fees, Prime bundles its services, and Microsoft has an inexpensive subscription for unlimited games, yet Steam is still more popular. Why? People prefer Steam’s service, and publishers are willing to pay a premium to sell on Steam, all without anticompetitive behavior.
Valve is a shining example of how to handle having a commanding market share: they invest in their products so customers want to stay.