Slashdot Mirror
Is Valve's Steam Anti-Competitive?
Absolut187 writes "Gearbox Software CEO Randy Pitchford says Steam's domination of digital distribution is 'dangerous,' and exploits small developers. 'Steam helps us as customers, but it's also a money grab, and Valve is exploiting a lot of people in a way that's not totally fair. ... Valve is taking a larger share than it should for the service it's providing. ... There's so much conflict of interest there that it's horrid.' Pitchford's comments came as part of an interview with Maximum PC, and he thinks Valve should spin off Steam to its own company. Is he right? Is there a better answer?"
Update: 10/10 at 02:00 GMT by SS: Randy has clarified his remarks in a comment here at Slashdot. He makes it clear that he likes Steam a lot, and for several reasons, but thinks stronger competition would benefit the industry as a whole.
Steam gives you an easy way to reach customers, and takes a cut of the profit in return. You think they're taking too much, don't put your game on Steam. Where's the problem here?
Valve is exploiting a lot of people in a way that's not totally fair
So start a competitor with policies you consider to be fair.
And stop whining, btw.
A company creates a digital content distribution service that is (almost) single handedly keeping pc gaming alive and we speculate how unfair it is. To great things go great rewards...losing sight of that simple principle shows just how into twilight we have gone.
How on earth is a voluntary service exploitative?
In the same way I guess that a story exploits people who voluntarily buy from them.
Is there something I'm missing here?
valve made a problem that takes all the crap of needing to keep disc's around that can get scratched. plus they made a system of drm that works and don't treat everyone like pirates. Also don't crash machines and cause more headaches for the legit customer then the pirates.
It's worth noting that for Valve's exclusive games, when you buy bundle packs containing copies you already have, you get more copies which can be given to friends.
Unfortunately, the same doesn't apply for third-party games.
I can understand the publisher's desire to lock a game to every customer. It ensures every sale gives you profit. I also understand that in the case of Steam, that's giving us much lower prices. Unlike most other platforms, Steam is flooded with quality games that go on sale for between $5 to $15.
When's the last time you got an XBox360 game brand new for $10? You can take your rights of sale and shove them... somewhere. I'll lose at least that much money trying to sell a game I picked up new, so resale doesn't really concern me much. Plus, after I sell it and lose $10+, I don't have it anymore.
One thing I would like to see is Valve not allowing non-Steam DRM in games. I hate it when games have double-protection(like Universe At War), and then it doesn't work because of the non-Steam DRM.
Has Valve somehow managed to erect barriers to entry into the market, or in any way block competitors from starting a competing service? Is there in fact anything unethical or unfair going on?
Valve pioneered this area. Now they are reaping the rewards. Anyone who doesn't like it is welcome to start up their own, competing service.
But hey, he's entitled to complain about it if it makes him feel better. That's less work that trying to compete with Valve.
steveha
lf(1): it's like ls(1) but sorts filenames by extension, tersely
So Impulse (http://www.impulsedriven.com/) is like steam, but run by Stardock. Games you buy on impulse don't require it to be running ala games on steam. I don't know how their pricing is for game developers, but they sure seem nicer and friendlier than the big behemoth to me, and I'll always buy a given game on impulse over steam if they have it.
Well with digital distribution you cut out the publisher/distributor, and you can either turn that cost into profit or cut ti out of the cost of the game.
And of course since it costs mere pennies to distribute, once you make up the cost of producing a game you can set the price point wherever you want and it's pure profit.
I've bought games from gamersgate, direct2drive, impulse.net, gog.com and steam. Steam doesn't quite have a monopoly yet.
But the only service from this list I like more then steam is gog.com. Steam offers a great service which offers very fast downloads, an easy to use steam app, weekend deals, plenty of community features, achievements... The only thing they seriously fuck up is their price ranges. Direct dollar to euro conversions make me feel ripped of. It also means that new games are always cheaper to get at a retail store. Steam is only useful for weekend deals.
If you offer a service with non intrusive drm, a good community and cheaper prices I'll be glad to buy at your shop. Direct2drive is an example of how not do it. It offers very little community interaction. Their games are country restricted. A £5 game seems cheap at first until you see that others pay $5, it's 40% cheaper and again makes me feel ripped of. And needing both serial codes and activation codes makes things a mess to install. I received 4(!) serials when installing titan quest. Compare that to gog.com where a game plus expansion is offered in one bundle with no DRM. Those games are guaranteed to work with xp & vista. They offer user reviews, fora for each games, advised mods to use... And a game costs $6 even if I live in Europe.
There's room for competition but you need to offer a better service. Not just throw your DRM protected crap at your customers. And while steam is a nice platform there's definately room for improvement.
Wow... who would imagine.
WOW isn't on steam.
signature is pants
I completely disagree. The prices are often cheaper - new releases often have specials (10-20% off), and they have specials all the time - specials I wouldn't normally see since I don't go to a gamestop/best buy every week. Add to that the ability to preinstall games and be available from any computer (you log into), I think it's brilliant.
He might have a point if Valve really had a monopoly. If they because the only way to do digital distribution, ok maybe a problem. However, that's not the case. My personal favourite for digital games is Stardock's Impulse (impulsedriven.com). Same idea basic as Steam. What I like about it is it is better on DRM. They don't apply their own DRM to all games, so some have none at all. Others use Impulse GOO, which is kinda like Steamworks but you don't have to be logged in or run the client, others use 3rd party DRM like on Steam.
Yet another option is Direct2Drive. I'm not such a fan of this one, but it works. I've bought a couple of titles from it.
So if a publisher/developer doesn't like Steam, well then don't use them, use one of the others. Nobody is making you use Steam. Or, for that matter, you could always use Steam but offer a better deal to the others if you like them better. Have your game for $50 on Steam and $40 on Impulse. That way you still get sales from Steam, but you can point customers to the platform you like better.
The other funny thing about the whining is that though the digital distributors take a cut, it is way less than retail. Retail is about a 50% markup. So if you buy a game at Target for $50 the publisher sees $25. Digital distributors don't take nearly that large a cut (it is more like 20%).
I'm seeing a lot of comments discussing various flaws of Steam, but nothing which I recognize as anti-competitiveness. Now I'm not terribly well informed on what constitutes anti-competitive practices, so I did what any random Joe Slashdot on the street would do, which is look it up on WP.
http://en.wikipedia.org/wiki/Anti-competitive_practices
Looking at the list of typical anti-competitive practices, I see none which I can imagine applying to Valve's Steam, so I'd imagine that their high popularity with publishers given their high cut of the price is simply due to a lack of good competition rather than Valve pushing all their competitors in online game distribution off the market.
If Steam wasn't ultimately providing a profitable service, I'm sure publishers would simply stick with the physical retail market.
As a guy who reads, trusts and respects slashdot and the community here, I figured I'd take the time to clarify my position since my intent has been construed out of context. As a gamer, I *love* Valve's games. Hell, I've *made* some of Valve's games! As a customer, I love Steam. I like owning a credential that I can use from any terminal and I like the software. There are other things I like, too. As a businessman, I appreciate the access to Valve's customers that they are providing with Steam. I think there's value to that access. I'm really happy that the Brothers in Arms games are available on Steam and I think Steam customers are really going to dig Borderlands. I have been and hope to be a partner to Valve for many years. From an industry perspective of digital distribution on the PC, I think Steam is doing it the best right now. They're in front and they're really getting value out of their leadership position with digital distribution on the PC. From an industry perspective, I believe that Steam would be even better off if it were a separate company. Trust issues that result from conflict of interest could be mitigated if Steam were a separate company. Take that only as analysis. It doesn't matter how much I trust Valve or how trustworthy Valve actually is - it's just perception within segments of the publishing and development community that, I guess, no one is really talking about. I'm on record in this article saying how I personally trust Valve. I was attempting to comment on perception from some angles of the industry. I also believe that gamers and customers and anyone making games using 3rd party digital distribution systems would be greatly benefited if Steam had some viable competitors. Competition generally drives higher quality products and services at lower prices. I can't see how anyone could argue against that point. If we love Steam, we should hope that as competition appears that it prompts the Steam folks to go faster and better towards improving the service and the pricing. In spite of the implication made in the original source article, I do not want Microsoft to control digital distribution on PC, but believe they (and others) could enter the space if they wanted to and help the competitive landscape and even, perhaps, help to standardize the landscape a bit. I believe that because Valve is a game maker that generally "gets it" I think there's a lot of value to the position they have and I'm really excited about the risk they took and the foresight Valve showed in paving the way there. These are not mutually exclusive feelings and they are all honest and forthright.
Note that there's already been some counterpoints against this story posted elsewhere on the internet:
Counterpoint from John Gibson
Counterpoint from Derek Smart
You think that if I pay money for a product that can be altered at an any time through the distributor or where the distributor can revoke my right to use the product at any time is somehow bad? I can not believe what I am hearing! Here I was thinking that it was totally awesome to buy a product which I could never resell nor would I have any control over. I personally think that Steam is an awesome platform and am very happy that all these DRM practices strayed far away from it.
As someone who has an upcoming indie game appearing on Steam, here are my thoughts.
First of all, there is no shortage of competition for Steam. Steam is definitely the biggest, but they are not doing anything anti-competitve.
Unlike the console market, it is not uncommon to see a game sold on Steam, D2D, Impulse, and the 15+ other contendors simultaneously, from day one, in addition to being sold by the creator directly. In fact, even earlier than day one, due to the trend of preorders.
If Steam pressured developers into exclusive deals (which they could easily do, due to their size), then sure, I would be kind of pissed. The fact of the matter is that Valve isn't doing that -- they are simply acting like a big, friendly store where developers can put their game for sale. They have been great dudes so far.
There are other digital distribution systems which are still common names and the market is still developing. Off the top of my head I know of direct2drive and I use Stardock's Impulse system when I can to buy games. It's a lot better than steam, not always cheaper for big games but you can add physical copies of any games you own to it, have it manage updates, your keys, reinstallation when you want without using the physical media. Has a lot less DRM, doesn't need to be running for you to run it's games. Not that i'm hugely against steam, it does some things I don't like (automatically updates games - not an issue now that steam is unmetered with my isp but it used to be, restricts by country when certain publishers demand it).Though being Australian and having been ripped off by publishers through retail (90 to 110 $AUD for a new game, 1 AUD averages 0.8 USD but it varies a lot - 0.9 at the moment, dipped into the low 0.6's at one point), having $50-$60 games from most publishers is great, though there is one which kicked up a stink and made steam charge more to Australians so it wasn't cheaper than retail anymore).
If you've signed an exclusive contract, then obviously you would be in breach of contract if you sold somewhere else. Duh.
That's actually you (the developer) creating an incentive for Valve to promote your software more than they would promote non-exclusive software. It's a business decision, and the company that has to live with it is the one that made the decision.
Re-selling is an entirely different beast. If you want to own a physical copy of a game you can sell to someone else, you should buy a physical copy. What you are doing with Steam is effectively purchasing a subscription to the game, rather than buying a copy. You can tell by the fact that you can download the game on any computer and play it, and have it installed on multiple computers at once. This is not possible with purchased copies, as you are violating copyright every time you install the game on a new computer. Of course you can break the law if you want, but I'm assuming you are an honest person.
There are competing services, by the way, which allow you to purchase digital copies of the software. If you don't like Steam, go with one of them. There is nothing limiting you to Steam except yourself.
Security is mostly a superstition... Avoiding danger is no safer in the long run than outright exposure. - Helen Keller
Wow it looks like if a company is not MS or google then nobody should even question the conflict of interests they have here on slashdot!? The guy has some good points, agree/disagree but give me a break on all the "they have competitors"/"build your own nobody is stopping you!" posts, I mean most of those posts are just repeating previous ones, of 109 posts (most of them "they have competitors",etc) only 1 has any real analysis/content!
IranAir Flight 655 never forget!
It's not at all uncommon for newly-released (and thus not-on-sale) games to be available cheaper at traditional retailers, as you can usually find at least one that is running a sale on the brand new game.
The most notable recent example I can think of is Left 4 Dead (a Valve-made game, even!) which was available at some major retail chain (I forget which) for $40 at launch, vs. the Steam price of $50. Buy it at the store, put in your code et viola, legit Steam copy of the game for $40. Buy it from Steam (and therefore Valve) directly, pay $10 more. Weird.
I pretty much only buy Steam games when they're on sale, these days. I still don't get why they aren't undercutting normal retail prices by 5-10%, what with the much, much lower distribution costs they have. Their specials, though--especially the multi-title bundles--are fantastic.
Well, for customers of Steam (read : anyone who might has a game he wants to market) it might be. But for customers of those customers (read : those who buy those games) its far from that.
I recently bought a copy of Fear 2. Alas, when I tried to install it I got a "Fear.dll missing" error-message, maybe because my game-machine is simple not connected to the 'Net ?
And pardon me, but there is, for me, absolutily no way I'm going to put money down for a DVD contaning some software I can't even use, everytime I want to install it (and maybe even more often ?), without contacting some far-away server from whom I can beg to please give me the content I allready payed for. Especially not when I'm known to enjoy games of yester-decade as much (or maybe even more) as the current games -- It would (most likely) be impossible for me to re-install games of a few years old onto my machine (and not because of hardware incompatibilities). Either the game will not be supported by Steam anymore (licence-to-play expired ?), I would have to prove I'm the first buyer probably by sending the origional bill to them, or even Steam has ceased to exist, leaving me with a "bought" game that has become worthless without me even knowing when it happens/has happened (throw a standard dice, divide by 2 or even 3 and add 2 to 3 years. That is, if you're lucky, as it could happen next week).
Oh yeah, I recently (last week) bought Fear I (the origional, first version) too (I allready played part of it on a friends computer). Too bad that it suddenly cried that there "is an update available", a message which won't go away (pops up every time I want to continue playing).
The funny thing is that an update will invalidate any saved-games you allready have. To add to this monkey business the site where the update should be gotten from is non-existant anymore. If this company can't even support its own product a few years (or, in my case, a week after I bought it (from a store) ) I allready have bad feelings about an external party like Steam ....
You must not be European, at the least, then.
Ever since the product pricing in Steam adopted the traditional "USD = EUR! bend over, lol" method of currency conversion, Steam games have been bloody expensive for Europeans.
No, it's not just taxes. Highest tax in Europe is some ridiculous 25% in Sweden, Denmark and Hungary (most are around the 19% mark). Now check the going rate for EUR/USD: 1.47501.
It really is very often much cheaper to just buy retail in Europe.
While I agree that Valve is hardly a monopoly, companies like Electronic Arts, 2K Games, UbiSoft, Rockstar Games, LucasArts, and iD Software are hardly indies.
GLaDOS for President 2016! "Well here we are again. It's always such a pleasure." -- GLaDOS, 2011
This is an interesting observation. It parallels something I have been considering in regards to the Rock Band and Guitar Hero series, in fact anything which fundamentally is not different from it's predecessor but which is continuously released. For example, the Rock Band franchise illustrates my point nicely. The fundamental game from RB to RB2 to RB:Beatles has not changed. Sure they updated the software with some tweaks (isn't that really just a patch) but the way the game is played stayed pretty much the same. The only thing that has changed is the music available. For those of us that play any of the music based games this is what really maters. I could care less if I am playing RB or GH, I just want to play the songs. I look at this observation about Steam in a similar way, all we really want to do is play the games. We could care less if it is Steam, XBLA, or any other service (as long as it works of course). Why not treat Steam (or the RB or GH franchise) more like a piece of hardware than software or service. Also, if Steam is just the most popular, and by that I mean most user friendly, way to distribute games digitally why not license the technology out to other companies which can then offer their own service with their own selection of games. Personally I used to do a lot of gaming on PC but not much ever online so maybe I am a little out of touch with the online gaming community but when I look around the gaming business, as well as the entire business world for that mater, I see old business models and outdated technology. Isn't it time for us to embrace these new technologies and start thinking outside of the box again? Digital distribution is the wave of the future and just as Netflix is streaming movies directly to a TV set with a little box, Steam will be doing the same eventually (PC or otherwise). In response to another point that someone made about conflict of interest, the conflict of interest is a good reason to spin off Steam into it's own company.
First, saying that steam is a money grab is as asinine as saying that physical media publishing is a money grab. Of course it is. It no more exploits small developers than 2K Games, Ubisoft, EA, or any other software publisher does. Which is to say, yes they all do. Attacking Valve specifically because Gabe and Doug had the foresight and vision to get a foothold in the digital distribution market before it became popular is just plain whiny. Valve's domination over the digital distribution realm is not due to anti-competitive behavior. It's due to a superior service which adapted to the market long before traditional publishers' white haired executives realized they were losing sales to steam. By then, the best option was to publish under steam. Does steam take a larger share than they should? Probably not, given the service they provide. Using physical media presented problems for consumers. Publishers, already wary of online piracy saw digital distribution as counter-intuitive. Valve presented steam as both an answer to piracy and a solution to issues with physical media. But for Valve it was much more than that. By publishing their own games, they effectively avoided issues with traditional publishers. Consumers wanted to get their games online. Traditional publishers wouldn't provide them. Blaming Valve for steam's popularity is both a compliment and ludicrous. The consumers wanted the service.
Second, there is plenty of competition out there for digital distribution. None of it provides quite the same value as steam. Traditional publishers tried their own flavor of digital distribution. Some were very difficult to use and offered only one download of the game. None offered the community features that steam did at the time. Steam continues to improve the service at no additional cost to either consumers or developers. Only Stardock is coming close to Valve. Stardock was offering community services long before their Impulse DD store launched. Other DD game stores are web-based and don't even come close to the services and value that steam provides. So forgive me if I don't share your disdain for steam.
I thought the idea was stupid when I first heard about steam in 2002. I didn't see the potential.
That being said, the only dangerous part is the faith we place in the service after investing thousands of dollars on games on steam. If steam shuts down or becomes defunct, our games go poof. Granted, we have the option to backup our games, though they only work if connecting to the steam service. So the dangerous part is also the most valuable part.
They're using their grammar skills there.
I buy my games ate physical game stores for a very simple reason:
- If they don't work or they're not what's advertised I can bring them back and get a refund.
This is true for any game I buy: there's no need to investigate the Software License of a game before I buy it (like in Steam) to make sure I can get a refund
Try doing that with digital distribution or even online stores.
Microsoft launched Games On Demand (Downloadable versions of full Xbox/Xbox 360 games you could buy in stores) a few months ago, so I don't expect that they'd put any games on sale through it quite yet.
Having said that, the Xbox 360 titles on it are usually $19.99-$29.99, cheaper than you find them in stores. They also have the old Xbox original titles on it for $15 or so.
GLaDOS for President 2016! "Well here we are again. It's always such a pleasure." -- GLaDOS, 2011