Alright, how many of you have played Half-life 2? Let's see some hands here, guys...oh, look - just about everybody. Now, how many of you went to a retail store and purchased that copy on CD or DVD? Again, many of you. But since that time, how many of you have bought further games from the Steam network?

The Steam network, and digital distribution in general, has certainly been under fire lately. In the recent credit card debacle, many people worried about exactly how much information Steam really kept. Of course, we found out after that incident that it wasn't Steam's service that was hacked at all, but instead the credit card processing company hired by Valve. The break-in didn't even really affect the bulk of Steam's consumer base - it was a Cyber Cafe problem that impacted only a tiny fraction of the service's users.

Still, the questions were raised, and answers were needed. Are we safe with digital distribution? How well does it really work? These questions then started other questions - what role do developers and publishers play in the process? And what happens when a company is all three, like Valve is today?

A couple emails and phone calls later, and I had the answers straight from the horse's mouth. Valve's own Doug Lombardi gave me some time and some leeway to answer a few tough questions about what digital distribution (and Steam in particular) means to gamers and to Valve.

Understanding Digital Distribution

Digital distribution is certainly an interesting concept, and one that many gamers aren't entirely happy with. But why? Some are annoyed that it's not cheaper. Others don't like the concept of not having physical media. And still others are worried (sensibly) about privacy concerns: account theft, identity theft, or worse yet - selling personal info to marketing companies. The credit card debacle has only been the first of such concerns that have truly manifested.

On top of the fear aspect, it seems that we as a culture are stuck on the concept of holding things in our hands. Many people are wary of the concept of the "cashless society" that I illustrated in the technology of money. The same thing goes for what people receive for that money - we don't like paying with real pounds or dollars and receiving nothing in return.

This is doubly true for media. If you've bought a game but receive no discs, did you really buy the game? Or did you buy a license to download and play the game until that license is revoked? How about your $600 software the next time your computer crashes? All of these things are easy when you have a physical disc. You can put it in, reinstall and you're right back on track. But when you're dealing with downloaded media, what is the proof you even own the game?

Running on Steam Opening the Valve Running on Steam Opening the Valve
Both Windows XP and Adobe Photoshop CS3 require both an activation key and internet activation.

If we think back, it's easy to see where the ball started really rolling - Windows XP. The first company to really bridge the gap between physical ownership and digital rights was Microsoft with its Windows XP activation. Even if you had a fully valid license key, the software required activation afterwards. If you had activated it too many times before, a phone call to Microsoft was in your future. Trust me, I know - with the amount of time my system has been reinstalled thanks to various bit-tech testing procedures, I'm practically on a first name basis with those guys in India.

It was the first time that Joe Consumer found out that he didn't own the software, but instead owned the license to run the software - and it was met with some pretty harsh criticism. That slippery slope has done nothing but continue thanks to the joys of DRM, but it's also provided some great steps forward.

Nowadays, you can get everything online, eschewing the physical media entirely. Full versions of games, software, movies and music can stream to your hard drive day and night, just waiting for the right unlock codes. But how are they protected? Why do we want it this way? And what benefits does it give to Joe Consumer when he could go to the store and buy it for just slightly more?

Let's take a look...
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