You’ve Heard of the Streaming Wars, But What About the Launcher Wars?
There’s a major shakeup in PC gaming happening right now: Last December, Epic Games, the developer of Fortnite and the popular suite of game-making tools Unreal Engine, opened its digital game store, challenging the monopoly of Valve’s Steam, a platform for purchasing and playing games, over the online gaming marketplace.
This is a huge deal—Steam has dominated the massive PC market for more than 15 years. Just how much money is at stake in the world of PC game distribution? Steam is estimated to have generated $4.3 billion in revenue last year, up from $3.5 billion in 2016, making it a record-breaking year for Valve.
How did Steam get so big? You can thank the platform’s anti-piracy, security, and anti-cheat measures in the pop-up spam-ridden era of the early 2000s. Steam made it easier for developers to break into notoriously pirated markets like Eastern Europe.
If you’re a developer, though, the drawback to releasing your game on Steam is that the company has traditionally taken a bigger cut of revenue: 30 percent. Epic, on the other hand, announced a revenue split of 88/12, causing Steam to offer 80/20 to compete. Another concern developers have in regards to Steam is discoverability, or, in other words, having their game get lost in the algorithm.
Sound familiar? In many ways, games are going through the same fights over visibility, profits, and distribution that lots of other media are encountering. For example, when the music streaming service Tidal debuted, it was touted as “owned by artists,” and the company claimed that the compensation rates for artists would be higher than services that have free subscriptions supported by advertising, such as Spotify. Netflix has also lured away hit-making showrunners like Ryan Murphy and Shonda Rhimes away from TV networks with multimillion-dollar deals, heating up the battle of ownership in Hollywood.
Consumers stand to benefit more from the competition ramping up, which could drive down prices and encourage better exclusives for each store. But also expect bidding wars to heat up for exclusivity for your favorite game developers’ titles like Metro Exodus.
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What’s your early access insight? Competition in digital game distribution doesn’t start and end with Steam any more than it starts and ends with Netflix. Like streaming platforms, Steam’s long-held monopoly over PC gaming is being threatened by newcomers that offer desirable content, which is really what consumers care about, not services themselves.