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Valve has 70 percent of digi distribution market

Published on 23rd November 2009 by Joe Martin

Valve has cornered at least 70 percent of the digital distribution market, says Stardock boss Brad Wardell.

Stardock CEO Brad Wardell reckons that Valve has cornered at least 70 percent of the digital distribution market in an annual customer report filled with estimates of Steam's success.

Stardock itself is, as well as a games developer and conventional publisher, also a competitor to Valve's Steam through it's own Impulse service. Impulse has the second largest share of the market, says Wardell, at around 10 percent. The figures are estimations based on discussions with publishers and analysis of available figures.

Discussing why Steam is so successful, Wardell says it isn't so much to do with Valve's early entrance into the market place as it is about the exclusive games Valve has access too, namely the Half-Life and Left 4 Dead games. Valve also has a monopoly on all games using the free Steamworks DRM and community backend, which includes Modern Warfare 2.

Impulse by comparison has it's own Sins of a Solar Empire and Demigod games and has, along with other companies, moved to boycott Modern Warfare 2 and other Steamworks titles.

"Once a game requires Steamworks, it is effectively cut off from us, which limits our content," he explains. "The problem is that it is not practical for us to install a game that in turn requires the installation of a competitor's store and platform in order to play it."

Stardock is working on a competing product, dubbed Impulse Reactor, which will offer similar functions to Steamworks. Stardock also already has Goo, a DRM solution which allows second hand sales.

"Digital distribution will represent approximately 25% of the revenue for a typical PC game publisher on a new title,[/i]" Wardell estimated.

Stardock recently asked customers how they prefer to purchase their games and found that the number of users who prefer a digital sale was up by 50 percent compared to last year to 61 percent.

Let us know your thoughts in the forums.

39 Comments

Discuss in the forums Reply

ChaosDefinesOrder 23rd November 2009, 11:33

um... maybe there's a reason that developers use Steamworks?

It's like people who complain that Google has a monopoly over internet services without actually considering WHY it does (Google.com being good and simple, GMail being fantastic etc)

AshT 23rd November 2009, 11:42

"Impulse by comparison has it's own Sins of a Solar Empire and Demigod games and has, along with other companies, moved to boycott Modern Warfare 2 and other Steamworks titles."

Erm ... seeing as Impulse can't even serve Steamworks games why does Brad bother mentioning a boycott of Steamworks?! Thats like me saying "I aint EVER buying one of dem Ferraris because I don't like them" ... and never being able to afford one anyway.

Nice PR/Marketing here for Brad, he got some publicity for Impulse. Not sure his market share is 10%, would love to see the official figures done by an independent

Silver51 23rd November 2009, 11:58

TBH, I'm unwilling to clog up my machine with more than one copy of digital distribution software. Steam just works, so I use that.

Installing five or six different game management systems because everybody wants to do it differently is not something I'm willing to do.

dire_wolf 23rd November 2009, 12:01

This guy needs a slap

V3ctor 23rd November 2009, 12:15

Quote:

Originally Posted by Silver51
TBH, I'm unwilling to clog up my machine with more than one copy of digital distribution software. Steam just works, so I use that.

Installing five or six different game management systems because everybody wants to do it differently is not something I'm willing to do.

That is my main reason too... I have steam, and had EADM (for C&C3)... It's clunking the pc, i want to play a game, I'll go to just one place (not 2-3 different icons in the taskbar)

feedayeen 23rd November 2009, 12:22

If Steam has a 70% market share and Impulse only has 10%, why should we risk our purchases with a system that may go bust in just a few years? Valve on the other hand is nearly guaranteed to last for years and possibly decades so long that they don't get greedy and cash in with EA or MS.

Tokukachi 23rd November 2009, 12:24

This isn't a good thing in the long term, as we move closer and closer to full scale digital distribution.

Valve have defended its ludicrous steam prices stating that people are prepared to pay for the convenience, do you really think they will charge you less when it's the only option?

We need competition the digital distribution market or we'll all end up paying whatever the developer sets the "RRP" at :(

ChaosDefinesOrder 23rd November 2009, 12:42

Quote:

Originally Posted by Neat69
This isn't a good thing in the long term, as we move closer and closer to full scale digital distribution.

Valve have defended its ludicrous steam prices stating that people are prepared to pay for the convenience, do you really think they will charge you less when it's the only option?

We need competition the digital distribution market or we'll all end up paying whatever the developer sets the "RRP" at :(

but at the same time, Valve have showed time and time again that if they reduce a price in a "sale" then the sales go through the roof and make more profit in that sale period than the total game sales to date.

Put simply, their own data and their own press release of their own data shows that lower prices (if only for a limited period) makes more money than high retail costs...

I'm just waiting until distributors realise that the supply and demand loop results in high price -> low volume -> low profit whilst on the other end you have low price -> very high volume -> high profit. Something Infinity Ward completely missed with Modern Warware 2's RRP. Granted this was undercut by everywhere because even the shops realised that £55 for a game was a huge commercial suicide!

I still maintain that £25 is the sweet spot for new games

crazyceo 23rd November 2009, 12:42

You can understand the sour grapes from this guy but Steam does work and it works pretty damn well.

Grimloon 23rd November 2009, 13:05

It does definitely sound like sour grapes. Not only are they beaten on the digital distribution front but they lose on copy protection as well. Steam provides both far more effectively. OK, a monopoly is not a good thing but basically if others could provide the same combination of functionality and simplicity (i.e. it just works in 99.9% of all cases, minimal overheads and no fiddling required) then they'd be in a position to comment and be taken seriously. At present they don't even appear on the radar (I'd never even heard of Impulse until about 6 months ago, I've been using Steam for over a decade).

Rkiver 23rd November 2009, 13:08

Steam controls 70% of online distribution.
In other news the sky is blue.

/me facepalm

deanbsfx 23rd November 2009, 13:17

Valve have L4D n HL series to help with the success of Steam, just as Stardock have their own games on Impulse. And also complains at Steamworks being tied with games, but they are working on a similar service. And they sold Demigod as a GFW title, so really it's hypocrisy all around.
I still find the boycott on MW2 odd, considering I picked up Defence Grid in the 5-year sale on D2D and it was a Steam game.
Make a comparable service, (cos Impulse is as useful as EADM really) and maybe more folks will use you.

Digi 23rd November 2009, 13:55

Quote:

Originally Posted by Grimloon
(I'd never even heard of Impulse until about 6 months ago, I've been using Steam for over a decade).

Steam was released in September 2003. That is 6 years ago.

ON TOPIC: I can only echo what everyone else has said. If you put up a peice of software that works as well as Steam and then work your arse off to get companies to throw their chips in with you then all the best. Otherwise this is akin to being a corporate cry-baby.

TreeDude 23rd November 2009, 14:04

Quote:

Originally Posted by Neat69
This isn't a good thing in the long term, as we move closer and closer to full scale digital distribution.

Valve have defended its ludicrous steam prices stating that people are prepared to pay for the convenience, do you really think they will charge you less when it's the only option?

We need competition the digital distribution market or we'll all end up paying whatever the developer sets the "RRP" at :(

I live in the US, so I only have US prices to go by. But they have always been the same as retail here.

Should Valve be punished for having the best product?

Rkiver 23rd November 2009, 14:14

Well here in Ireland Steam is more then retail. For example Left 4 Dead 2 is €49.99 on Steam. In my local Gamestop it was €35.

That being said sometimes the weekend or midweek offers are great value, but depending on what I want I go Steam, Impulse, or for old stuff, Gog.com

DriftCarl 23rd November 2009, 14:15

steam is a good product, I have been using it since it started and have gone through the troubles it has had in the past, they have worked hard to get steam where it is now. It is at the point now where it is popular enough that alot of my friends use it, and that I can chat to them while ingame and also join their game.
Stardock though, never heard of them..

B1GBUD 23rd November 2009, 14:21

I smell an anti-competitive law suit

Grimloon 23rd November 2009, 14:24

Quote:

Originally Posted by Digi
Steam was released in September 2003. That is 6 years ago.

See, this is what happens when you get older! :o I'm probably confusing it with CS. However, it does give a good indication of the effect that Steam has on many of us in that we wouldn't be able to say when they started using it.

Stardock I remember for entirely different reasons, those being primarily to do with their copy protection and how it was occasionally a serious PITA.

HappyThoughts 23rd November 2009, 14:29

Quote:

Originally Posted by B1GBUD
I smell an anti-competitive law suit

Valve don't force people to use Steamworks, however it will not work with another companies system. That is not anti-competitive.

Silver51 23rd November 2009, 14:42

Quote:

Originally Posted by Grimloon
... Stardock I remember for entirely different reasons, those being primarily to do with their copy protection and how it was occasionally a serious PITA.

Are you sure you're not getting Stardock confused with Starforce there?

Mcmonopoly 23rd November 2009, 14:44

I tallied up my video game (PC) buying habits for the last 8-9 years and the results speak for themselves:

+/- 52 games bought in total over 9 years
19 are from brick and mortar retail and the other 33 are from Steam.

I registered with Steam when they released HL2 in 2004, so in roughly the same amount of time (+/- 4.5 years) I bought twice as many digital games than retail ones.

What does it for me is the weekly sales, sometimes it's just a steal.!!

Psy-UK 23rd November 2009, 15:16

A game with Steamworks doesn't necessarily have to be bought of Steam. Case in point; MW2.

yakyb 23rd November 2009, 15:21

tbh i dont want 3-4 digital download packages running on my computer and because i only want 1 i'm going with the largest steam

AshT 23rd November 2009, 15:24

Quote:

Originally Posted by yakyb
tbh i dont want 3-4 digital download packages running on my computer and because i only want 1 i'm going with the largest steam

See this just adds to my bullsheep meter, I reckon Brad was way off in his press release, he's suggesting 1 in 10 buy digital from his company ... more like 1 in 100.

Javerh 23rd November 2009, 15:45

Quote:

Originally Posted by Grimloon
See, this is what happens when you get older! :o I'm probably confusing it with CS. However, it does give a good indication of the effect that Steam has on many of us in that we wouldn't be able to say when they started using it.

January 13th 2008.

Although you might say my point is invalid because I'm such a late bloomer

SBS 23rd November 2009, 15:51

Steamworks /= Steam. God love uninformed comment :P

Stardock are simply building up the case for Steamworks to opened up, an inevitable move being endlessly delayed (presumably) for the obvious business reasons. When it eventually happens, Steam's insane pricing for certain titles will be curtailed for fear of losing market share - how any of you can have a problem with this is beyond me?

Much as Impulse is a crock of ****, the one man PR machine giving Valve another little nudge won't hurt.

HourBeforeDawn 23rd November 2009, 16:56

I have impulse and steam and well frankly impulse sucks in comparison.

cheeriokilla 23rd November 2009, 17:52

Steam is da shyt!

Thedarkrage 23rd November 2009, 19:40

You have to realize that steam not in control of publishers and there the ones who set the prices Steam is a online store that publishers have direct control over what it wants to do with its pricing it just pays valve a fee. Steam works is there multiplayer systems and integration for the online steam community and they give this to publishers FREE

Whats wrong with that

Adnoctum 24th November 2009, 04:04

[QUOTE=TreeDude;2155143]I live in the US, so I only have US prices to go by. But they have always been the same as retail here. [QUOTE]

Why don't I buy from Steam, or new games?
Current MW2 price on Steam for me is US$81 (this includes ~US$8 in local taxes). Retail is $10 more expensive.
Sheer publisher rip off.

I'll always wait for the price drop. Or buy from India.
This is why priracy is the still best choice.

Orothe 24th November 2009, 07:08

Ok.. Why is "Monopoly" always viewed as a bad thing? Power Corrupts, but there's also an exception to every rule. What if there was one company that was nice and fare? That just wanted to stay in business and pay off it's workers, as well as help the community? That'd be bad?

Valve seems to want to make a profit, but isn't gouging anybody. There's no hidden fee's, T&C's, fine print. So far, they have power, and they're being fair and honest. They're growing and not showing any difference in morale values. As far as I'm concerned, they'll eventually control the digital distribution market and do exactly what they're doing now.

If you think them being a monopoly is a bad thing, then don't use it. You obviously have no faith in them. -.-

Orothe 24th November 2009, 07:11

Quote:

Originally Posted by Orothe
Ok.. Why is "Monopoly" always viewed as a bad thing? Power Corrupts, but there's also an exception to every rule. What if there was one company that was nice and fair? That they just wanted to stay in business and pay off it's workers, as well as help the community? That would be bad?

Valve seems to want to make a profit, but isn't gouging anybody. There's no hidden fee's, wordy T&C's, fine print, ect. So far, they have power, and they're being fair and honest. They're growing and not showing any difference in morale values. As far as I'm concerned, they'll eventually control the digital distribution market and do exactly what they're doing now.

If you think them being a monopoly is a bad thing, then don't use it. You obviously have no faith in them. -.-

Orothe 24th November 2009, 07:12

Ok.. Why is "Monopoly" always viewed as a bad thing? Power Corrupts, but there's also an exception to every rule. What if there was one company that was nice and fair? That they just wanted to stay in business and pay off it's workers, as well as help the community? That would be bad?

Valve seems to want to make a profit, but isn't gouging anybody. There's no hidden fee's, wordy T&C's, fine print, ect. So far, they have power, and they're being fair and honest. They're growing and not showing any difference in morale values. As far as I'm concerned, they'll eventually control the digital distribution market and do exactly what they're doing now.

If you think them being a monopoly is a bad thing, then don't use it. You obviously have no faith in them. -.-

AshT 24th November 2009, 07:52

Quote:

Originally Posted by Orothe
Valve seems to want to make a profit, but isn't gouging anybody. There's no hidden fee's, wordy T&C's, fine print, ect. So far, they have power, and they're being fair and honest. They're growing and not showing any difference in morale values. As far as I'm concerned, they'll eventually control the digital distribution market and do exactly what they're doing now.

Well said ... 3 times! ;)

Javerh 24th November 2009, 14:49

Quote:

Originally Posted by Orothe
Ok.. Why is "Monopoly" always viewed as a bad thing? Power Corrupts, but there's also an exception to every rule. What if there was one company that was nice and fare? That just wanted to stay in business and pay off it's workers, as well as help the community? That'd be bad?

Valve seems to want to make a profit, but isn't gouging anybody. There's no hidden fee's, T&C's, fine print. So far, they have power, and they're being fair and honest. They're growing and not showing any difference in morale values. As far as I'm concerned, they'll eventually control the digital distribution market and do exactly what they're doing now.

If you think them being a monopoly is a bad thing, then don't use it. You obviously have no faith in them. -.-

http://en.wikipedia.org/wiki/Monopoly#Monopoly_and_efficiency

Monopolies tend to be slow, inefficient mammoths. Society would be better off with more competition, better products and more sales.

AshT 24th November 2009, 16:32

Disagree. All you need is the right people in any business to make it great. You don't need competition fighting on every front to steal your customers, including bringing prices down (ie, less R&D budget, less to spend on great people). Lower prices is great for consumers, not for future tech.

Saivert 25th November 2009, 01:40

well.. sometimes competition just brings everyone down on a mediocre level. That is not great for the customers.

In the push for profit they do whatever they can to squeeze every little penny out of the customer and forget the core values.

Also I don't see why Stardock can't sell Steamworks games if Valve removed it's tie in with the Steam client. The store section really should be separate in this case.

I'm perfectly fine with having ONE PC games management and community system (akin to XBOX Live and PSN) but having separate stores. This would of course require tons of cooperation between games developers and everyone using one unified and standardized system. tl;dr never gonna happen

SexyHyde 25th November 2009, 09:39

i've used Steam from the beginning, you know the beginning when it didn't work, everyone was moaning about it and everyone said it would never work. look at it now! there is a reason it is way out in front as the market leader - they put the time in, listened to the people moaning about it and gave them what they wanted, unlike most, if not all, other companies that push their way of doing it and not listening to customers.

Orothe 27th November 2009, 04:57

Quote:

Originally Posted by Javerh
Quote:
Originally Posted by Orothe
Ok.. Why is "Monopoly" always viewed as a bad thing? Power Corrupts, but there's also an exception to every rule. What if there was one company that was nice and fare? That just wanted to stay in business and pay off it's workers, as well as help the community? That'd be bad?

Valve seems to want to make a profit, but isn't gouging anybody. There's no hidden fee's, T&C's, fine print. So far, they have power, and they're being fair and honest. They're growing and not showing any difference in morale values. As far as I'm concerned, they'll eventually control the digital distribution market and do exactly what they're doing now.

If you think them being a monopoly is a bad thing, then don't use it. You obviously have no faith in them. -.-

http://en.wikipedia.org/wiki/Monopoly#Monopoly_and_efficiency

Monopolies tend to be slow, inefficient mammoths. Society would be better off with more competition, better products and more sales.

"According to the standard model,[citation needed] in which a monopolist sets a single price for all consumers, the monopolist will sell a lower quantity of goods at a higher price than would firms under perfect competition."

Uh, the weekend sales. Isn't that doing the opposite? Selling a large quantity of goods at a low price? And without any competition? The point you try to make, my friend, just became invalid. =)