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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?
There's nothing wrong with complaining about monopolies.
No, and I'm usually the one up on a soapbox railing against 'em. But Steam isn't a monopoly. There needs to be a special barrier to entry for a company or industry to be one, and I just don't see it. There's no legal bar, like with government-granted monopolies or Google books. There's no incredible infrastructure needed, just reasonable bandwidth and servers. There's not a "desktop" barrier in which users only benefit from one similar product. There's not even an "I wanted to be the car" barrier that caused so much consternation in my youth. Nobody's accusing 'em of coercion. Popularity alone doesn't a monopoly make.
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%).
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.