Sometimes it’s hard being right.
Back in 2010, before I realized there wasn’t much money in writing about video games, I penned an opinion piece for The Escapist. The topic? Steam, and it’s current and/or impending monopoly status.
My point, in essence, was that what people think of Steam and Valve right now is irrelevant because, once the platform dominates, it’ll be free to disregard what’s in the best interests of consumers and developers.There will be nothing stopping Valve from making bone headed moves out of ignorance, greed or stubborn idealism.
And so here we are. No one knows exactly how much money Steam makes, or how much of the market it dominates. Valve, being privately owned, is not obligated to share any information about its health, and it volunteers nothing.
But we do know that since I wrote that article two major competitors, Direct2Drive and Impulse (now owned by Gamestop) have effectively faded into irrelevance, leaving only GOG.com and the new Humble Store as strong competitors (I suppose some might count Green Man Game, though it mostly sells Steam keys). We also know that many developers see the majority of their sales occur through Steam, and that digital downloads now make up a shocking 92% of the market.
In short, Valve as achieved dominance of the PC market. If you’re not on Steam, you don’t matter.
That might be okay if Valve was behaving properly but, predictably, the growth of its position in the market has resulted in a corresponding decrease in quality. Numerous critics, such as YouTube commentator Total Biscuit, have complained over the last year of a swarm of sub-par titles, mis-leading release dates and downright deceptive descriptions.
In part this has been enabled by Greenlight and Early Access, both of which let half-baked games on the service through a process that can be frustratingly opaque. But it’s also been enabled by a lazy attitude towards correct marketing on Valve’s part. It’s not clear if the company does any quality control prior to a game’s Steam release; errors seem to be fixed only of the Reddit mobs start demanding blood.
At best Valve’s behavior is sloppy. At worst it’s downright anti-consumer. It’s like going to the store to buy toothpaste, but when you open the box you instead find mouthwash. Oh, and the only way to exchange the item or receive customer support is to fire off an email and cross your fingers.
But the problem goes way beyond consumers. Developers, too, are being damaged. Puppygames developer Cas recently wrote an excellent piece pointing out that Steam (and others, like The Humble Bundle) has created a race to the bottom by developing a digital retail platform that competes almost exclusively on price. Gamers don’t like Steam for its great customer support, or its curation, or its excellent interface. Gamers flock to Steam because it promises insane deals.
That’s a problem. Why? Because it makes each individual person worthless to the developers and makes developers worthless to gamers. Selling more units means more support and more call for patches, but with many devs (particularly small studios) making a few dollars per unit, they simply can’t afford to provide either. Gamers, meanwhile, have rosters of hundreds of un-played games, allowing them to drift from title to title at the slightest whim. This breakdown in the relationship between developers and gamers has created a toxic environment that encourages games to sell on hype and promise rather than features and long-term support.
But that’s not the worse of it. Ohhhh no – the rabbit hole goes deeper. I felt Cas was very frank so I’vekept tabs on what he’s said elsewhere, to see if he would reveal more. And he has. To quote from his post on the Quarter To Three forums.
When we released Revenge of the Titans, it was at $27.72. It did in fact sell for $27.72. Valve, however, were having none of it, and insisted we price it at $14.95. And then a bit later, they suggested we price it at $9.95. Being somewhat naive back then I trusted their judgement. With great resistance I got them to change the price back to $14.95. Then Valve changed the control panel so we could automatically “suggest” price changes to all our products. I put the rest of our games up to $14.95, in the entirely reasonable theory that the more something costs, the more worth it’s perceived to have, the more likely people are to actually play it, the less customers we’d need to support, and the more room we’d have to manoeuvre when it did finally come to doing a sale. Valve vetoed the changes. I think it’s against the flimsy NDA that Valve have you agree to to say this, but, fuck it, it’s one of the very central aspects of this whole debate given Valve’s utter monopoly over the majority of game types on desktops. You should know about this. The race to the bottom was not started by developers. We were pushed.
Emphasis courtesy of Cas.
So there you have it, folks. Valve is helpfully “suggesting” that developers lower prices, and while Valve doesn’t explicitly tell developers what the price should be at the outset, it does hold veto power.
Oh, and in case you’re wondering why you rarely hear of this, it’s because this statement is probably in violation of Steam’s NDA. Whether it is or isn’t hard to say, because even the terms of the developer NDA are not published for public access. A dev might be able to shed light on that, but I could find absolutely nothing in my search.
There’s a common talking point among gamers at the moment concerning the “flooded market.” To eek out a meager success a studio must make exceptionally good games, benefit from exceptionally good press, and enjoy a bit of luck, too. We still have success stories like Shovel Knight or Rogue Legacy, but they’re the exception to the rule. Indeed, Cas has revealed that the most successfully Puppygames title has sold almost 700,000 copies, but his studio merely gets by. According to the flooded market theory this has occurred because there are too many game developers for too few gamers.
The truth, though, is a bit different. We’re experiencing a seemingly flooded market not because that’s the natural state of PC gaming but because Steam (and to a lesser extent, other digital stores like Humble Bundle) has purposely pushed pricing downwards while simultaneously removing quality control. Valve does this because it’s good for their store; it provides only the bare minimum of support, so more sales equals more profits with (almost) no increase in costs.
What this means is you don’t have hundreds of games in your Steam library because you wanted them. You have hundreds of games because that’s what makes Valve the most money. The real cost, of course, is a sorry trail of broken developers that leads to our one true free-to-play future. And don’t you just love F2P games?
Think about the next time you open your wallet for a Steam sale.