Tuesday, 12 July 2011
How To Own PC Gaming: The Rise and Rise of Steam
If it's a fight, they're winning. And the majority are cheering Valve on.
They got in early. They set up their stall, and said that if you wanted the most anticipated game of all time, you would have to have Steam. But then they made it easy, simple to use, to do the things you wanted it to do, you just had to say yes. And then accept it. And know that it was through it, and it alone that you would get access to everything. A gateway you never knew you needed before. But you didn't have to leave your chair to play your games anymore. There were no disks involved, no physical act of any kind beyond running the program. Before long, every computer belonging to every person who wants to play PC games has it. You just needed an internet connection. In the wilds of online games sales, Steam rules the roost.
If anything can be said to be driving the digital download market, it's Steam. Valve Software's distribution platform, digital rights management software, games library, social network, and everything in between has been growing as the dominant force in games purchasing since its launch in 2003. But it's more than that - as with iTunes and music, Steam aims to be the only program you need to access all of your games collection. See everything you own at a glance, and, in these days of terabyte-sized hard drives, all installed and ready to play as well. It was a fantastic innovation. It probably wasn't, however, planned to be the thing it's turned into. Not entirely, anyway.
The key difference between Steam and prior services is that it came bundled with the expectation-laden Half-Life 2 at retail, and then forced Half-Life 2 to be played through it. As a simple log-in-based system, it wasn't too obtrusive, and as it got in first, years before any equivalent systems (Microsoft's Games For Windows Live, based on Xbox Live, or Rockstar's ill-fated Social Club, for example), it played its cards at a point at which competitors weren't cottoning onto the potential of what fast internet connections could mean for games distribution. But it's important to note that it wasn't until 2007 that major publishers started to put their games on Steam, and it was that year that saw the first Steam Christmas Sale, selling previously very expensive games at vastly reduced rates. The success of Steam was that it was already present on most PC users' systems, but this was down to the success and quality of Half-Life 2, coupled with the successful mod scene that went with it. Steam would not have dominated digital downloads if Half-Life 2 had not been one of the best games ever made.
It's important too that it came from Valve - a development studio which, at that point, had only released one self-made game, Half-Life, published by Sierra. This game had revolutionised the first-person shooter, had been met by universal acclaim, and still rides high in any best-games-ever lists. The studio had enormous goodwill already, and the sheer quality of Half-Life 2 (currently one of the highest scoring games ever on Metacritic), only increased that. With Steam, Valve suddenly became their own publisher, albeit online only. It's interesting to note that the boxed retail version of Half-Life 2 has Sierra branding on it, as by including Steam in the box, Valve were slowly doing away with their need for an external distributor.
Steam pre-dates Half-Life 2, slightly, as it was originally released for the massively popular multiplayer shooter Counter-Strike's beta testers as a way to automatically patch the game to the latest version. It is this aspect of Steam that was another fundamental pillar of its success. It was also, probably, it's original purpose.
PC gaming is a messy business. Games are constantly updated, problems and bugs found and fixed, and prior to Steam, the main way of updating a game had been to find the publisher's website and download the files which would install the update onto your system. This had been clunky, as quite often some updates wouldn't be able to install without all prior updates being applied afterwards (for example, update 1.4 might need updates 1.1, 1.2, and 1.3 to be downloaded and installed first). This was messy, frustrating and time-consuming for the consumer, and so many didn't bother. In the minds of Valve, this meant that many people would be playing a game of worse quality than those who did make the extra effort. What was even more frustrating, was that different versions of a multiplayer game wouldn't work with each other. This meant that either multiplayer gamers would have to constantly be searching for the updates and installing them manually, or they were stuck playing the base version without the majority of the players. So Valve automated the entire update process.
Games installed through Steam automatically update themselves. It was revolutionary, although not entirely new. While it wouldn't be until 2005 that Windows would auto-update, from Windows 98 Microsoft had put in place a program that alerted users to fresh updates on the Microsoft website, and other games had operated with a similar process. It was also somewhat frustrating, as Steam defaults to automatically downloading these updates the minute it finds them. This stops you playing until the game has updated itself, unless you force it not to. Even if it doesn't, you have to fiddle with the settings for it to let you play an earlier version. However, for most people, it is a massive convenience. Particularly for multiplayer games, there is no longer any worrying about which version to download, Steam does that for you.
Valve have massively cultivated this. Following the Orange Box release in 2007, Valve's other multiplayer shooter, Team Fortress 2, has been updated constantly, allowing Valve to keep tweaking the game, adding new content, microtransactions, and finally releasing the game free-to-play. TF2's release and constant support, with the game again requiring Steam in order to run at all, coincided with the capturing of deals with many major publishers, including id, Capcom and Eidos Interactive, signed up to sell their games through the Steam store. This had been taking place with third-party software since 2005, but this move by large competitors to throw their lot in with Valve was instructive.
This was massively important - for the third-party publishers as well as Valve. Valve were able to take a cut of sales of games they had no relationship to, but the publishers of those games could still make a much larger profit than they would with sales through a shop. With no manufacturing or distribution costs, the margins suddenly shot up. Combined with increased broadband penetration, suddenly there was a new way of selling games through a pre-existing service, that had been designed around providing new content to the consumer.
Steam's download servers too were fantastic - rarely down, and able to deliver fast download speeds. Selling modern games as digital downloads made this essential, as even Half-Life 2 was several gigabytes in size. But Steam's sales service was modelled on Amazon's ultra-convenient system. Card details are saved, games can be bought with but a couple of clicks of the mouse. As with Amazon, this removes any hurdles that might pop up between the consumer deciding that they want a game, and being able to get it.
The main frustration with Steam - that games require internet access to authorise, and that the Offline mode frequently didn't work - has, in the second instance, been largely resolved. For the first problem, while it hasn't gone away, the draconian digital rights software (DRM) implimented by other publishers (notably Ubisoft) has made Steam's requirement for internet access on installation seem relatively tame. Other competitors too, most notably Microsoft's Games For Windows Live, haven't been able to compete, even though it is required for some games of similar quality to Half-Life 2, Grand Theft Auto 4, and Batman: Arkham Asylum. This comes down, mainly, to convenience and goodwill. Having a second background program running at once is frustrating, and as many of these games will now be bought through Steam, Microsoft are in the unenviable position of having their program be that second irritant. Furthermore, the system itself is far less easy to use than Steam, in spite of flashier effects. Mircrosoft's attempts too to integrate it with its own Xbox Live paid service has chipped away at any goodwill towards it that might have existed, and when that is coupled with the program frustrating users in a manner that Steam has singularly managed to avoid, it is not surprising that gamers have chosen Steam in much greater numbers.
From 2007, Valve has instituted bi-annual sales, slashing the prices to ludicrously low levels, often by 75%. While their standard pricing does not vary much from retail (and can often be slightly more expensive), during sales the extent of the price-cuts leads to vast numbers of gamers buying titles on a whim, for the price of a pint. These games, however, can only ever be played through Steam, which further cement's Valve's position as the premier digital publisher, as gamers increasingly have to run Steam if they wish to play their ever-expanding library of games. Valve's success at this was such that at the launch of Fable III on PC, Microsoft were forced to launch the game across both its own Games For Windows Live service, and Steam. It could not be ignored, and for a publisher such as Microsoft, that is a firm demonstration of Steam's power and reach to consumers.
By developing multiplayer interaction by an overlay, allowing text and voice chat with friends even when in-game, Valve have promoted the social aspect of gaming further, the catch being that it has to be through Steam. People, and gamers in particular, want convenience. Steam gives it to them, to the extent that some gamers re-buy games they already own in order to have a digital copy with Steam. All this, yet Steam's terms and conditions still state that Valve have no obligation to ensure gamers can continue to play their games if Steam were to close. The goodwill gamers have for Valve is strong enough to withstand any worries that might cause.
Valve have, through Steam, been able to publish a great number of independent games - even saving some independent developers from bankruptcy through advertising their games with a sale, most notably Darwinia's developers, Introversion. Using their links with the independent games community, and Steam's auto-update service they were able to use independent developers to market Portal 2 with exclusive new potato-related content appearing in their games, as well as Valve's own Portal, creating a huge game out of playing all of the games involved which, even though it didn't amount to any great result, was a fantastic exercise in shaping the actions of the developer community to benefit both themselves, and Valve. It vastly increased sales of the titles involved through what was, essentially, an interactive advert for a Valve game.
Valve's modus operandi has been to provide convenience, justifiedly-hyped sales, and occasional experimental fun for the consumer, and a deal with publishers that allows them to make more of a profit than they would at retail. In the sales, they get to see their games bought by vast numbers of gamers who would not have bought them at full price, but who may buy their next game for £30 rather than £3.75 on the basis of the title they just bought. Valve, with their 25-30% cut from every sale, gain the most of all.
Realising this, EA's rebranded store and download manager, Origin, is designed to compete directly with Steam. Unlike Steam, its games don't require it to be running in the background (although whether Steam users mind that is another matter), but like Steam it is to be bundled with one of the most anticipated titles of recent years: Bioware's massively multiplayer online game, Star Wars: The Old Republic. EA, despite being the second-largest games publisher on the planet, will have one hell of a fight to establish Origin as a firm rival to Steam, however. Previous EA policy has shown a reluctance to drive prices as low as Steam's sales will push them (even on the time-limited basis of a day, as with Steam), means that gamers still have a reason to choose to run Steam, on top of the requirement of any games bought over that service to have the program running to play. Valve's head-start means that they too have had a growing catalogue of games, and, as stated earlier, gamers like convenience. Hence, their affection for Steam only grows through use, and that use has been going on since Half-Life 2, in 2004.
Yet there are one or two rumblings of discontent by other developers. Crysis 2 was recently pulled from Steam, as was Anno 1404, while the much-hyped Brink was removed from Steam before being reinstated. Valve's terms and conditions for other publishers, it is suggested, changed. The allegation behind this is that Valve wished to manage the purchase of additional downloadable content for the games, so that Valve could take a cut of any extra purchases made by the consumer for a product on Steam, but not owned by Valve. Alongside digital distribution, which have for some time overtaken retail sales for the PC market, downloadable content has become a mass market: to off-set the massive price drops regularly seen by PC games, additional paid-for content for pre-existing games allows extra money to feed back to the publishers for a game that may have been bought for less than the additional material. For Valve to demand of a cut of this is understandable, but for the publishers to want to deny Valve that cut, when DLC may be sold for relatively little, is also understandable.
The next key moment, then, for Steam and digital distribution as a whole, rests with the success of Star Wars: The Old Republic. If it works as EA's Half-Life 2, then EA will have a base from which to expand onto Valve's lawn. If it fails, Steam's dominance remains. If Origin has been streamlined, to provide the convenience of use present in Steam, then it comes down to, ultimately, a game, and whether that game can be enough of a success to nudge Steam off its perch. EA, it seems, have learnt Valve's lessons. It just remains to see whether they are too late to do anything about it.