The Power of Steam

Written by Scraps
Dec 02 2011, 9:17 AM EST

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The Power of Steam

I hate viewing advertisements more than anyone I've ever met. When Steam first came out, I expected it to be a simple DRM / advertising platform by a large video game corporation that would ultimately slow down my computer's gaming performance. Prior to Steam, most of what I saw large corporations doing was not in an end user's best interest.

Why would I expect anything different from Valve? I really didn't know too much about Valve other than it was founded by two Microsoft millionaires. I also didn't know that Valve's approach to developing Steam has been to "make it the best content delivery platform a content delivery platform could be." Maybe that's not a real quote, but it should be.

It turns out that at least one of those Microsoft millionaire Valve founders, Gabe Newell, prefers to do things correctly or not at all - a philosophy I appreciate. Over time, while using Steam, Valve began to show me that they respected the relationship between a game delivery service and its end user by improving the platform on the end user's side instead of simply for their own profit.

When I first started using Steam in September of 2007 (when Orange Box came out), the software was a resource hog at a time when few people had even 4GB of RAM. It was sort of sad to see software that was designed to keep me connected to my friends be such a burden on my simple gaming computer to the point that I couldn't bear to keep the service running.

In 2010, they launched an update to their client, bringing the installer package down to 1.5MB, fundamentally making it easier to launch, run, and keep running. I was afraid they would fall back into the trap of cramming on more resource-hogging features all over again, but they have kept it clean and simple. Today, in December 2011, the client remains a 1.5MB download.

Steam is also very smart about how it supports it's developers. It began allowing free-to-play games for download on its service in addition to an endless supply of games under $5 and $10 in the past few years. Steam passes on much more of the profit from the sale of each game to the developer than retail stores offer, and they offer a much stronger marketing tool: a simple and consistent “Store Page” that allows players to search for games by name, genre, or price. This “Store Page” also enables potential customers to quickly find and browse screenshots and videos of the game. "Under $5" and "Under $10" buttons are also found on the front page of the Steam application (and website), and I know I've clicked them on more than one payday Friday. This is leaps and bounds better than the services anyone will get from a random visit to a local retail chain, and I don’t even have to get out of my chair.

To me, Steam offers many things but nothing as impressive as reducing the piracy of video games by offering a more convenient alternative. This is also the iTunes model, where for the average, non computer-savvy user, going to iTunes to buy and download a song or album is easier and more convenient than pirating it. While Steam is technically DRM, it is also lenient - most games allow you to play in an 'offline mode' that allows you to play the game without an internet connection. This is a rarity among digital distribution services and the type of step that Valve is willing to take where it’s competitors are not - the kind of bold new action taken because is the right thing to do for the customer and builds trust.

Steam also revealed to the world how discounts on games can be taken to extreme levels and end up returning such incredible profits that it outweighs the discount by insane levels. Gabe Newell himself explained a bit of this during his DICE keynote in 2009, (http://goo.gl/YucHj):

During the Holiday sales: 10% sale => 35% increase in sales (real dollars,> not units shipped) 25% sale = 245% increase in sales 50% sale = 320% increase in sales 75% sale = 1470% increase in sales

I’m not clear which game or games he’s talking about in this example, but from a business perspective I found this incredibly interesting because I don’t feel retail chains have ever really tried this sort of approach, and clearly, they should. I mean, Valve decided to literally experiment with pricing of a game they had launched 6 months prior, Left 4 Dead. Here’s the quote, from the very same article:

“Last weekend, Valve decided to do an experiment with Left 4 Dead. Last weekend's sale resulted in a 3000% increase over relatively flat numbers. It sold more last weekend than when it launched the game. WOW. That is unheard of in this industry. Valve beat its launch sales. Also, it snagged a 1600% increase in new customers to Steam over the baseline.”

Granted this text is from a G4TV liveblogger ‘bleahy’ whose work here I am grateful for, they are not exact quotes from Gabe Newell.

Both the “Friends List” and the “Shift-Tab” feature have certainly grown on me as my friends list has expanded throughout the years. I rarely use AIM anymore, and I have no way to contact a bunch of friends I've met through playing various online games except Steam, and it's allowed me to keep in touch and join up with them to play new games. I’ve moved around a lot over the years, and my online friends are an important part of my social life. Steam allowed me to prevent losing touch with many of them that I really didn’t know too well, until a game came out that one or two of us were all really into and had a chance to really hang out a lot more online as a result.

It's also been a nice touch to allow Steam users to see what games their friends are playing. I often fire up a chat with a friend to ask how a game is - sometimes I'll even buy the game based on a good friend's positive review. I have even found myself buying games for friends through Steam just because I liked the game so much and I wanted them to have a similar experience. Games like Braid and The Binding of Isaac aren't for everyone, but for the friends I know that will love them, dishing out $5 or $10 and sending the games directly to their accounts through Steam makes it impossible for them to ignore.

Adding Steam Cloud functionality to the service was also a welcome addition. Screenshots and game information is available from any computer I log into Steam with, and many games even support saving the game's progress directly into the Steam Cloud. It seems like the Steam service is filled with an endless supply of incredibly powerful services, all without charging anything. They even added support for Apple operating systems recently.

Overall, Steam feels like a universal law of business - give the customer what they want. The brilliance behind Steam specifically, is that it also gives developers what they want as well. Win-win business propositions always impress me, and having such incredible success on what also happens to be my favorite gaming platform (the PC) makes Steam probably my favorite software product ever written. Even if Steam was originally designed to prevent piracy and ensure smooth patching of games, after considering all the features Steam continues to add over the years, it starts to feel like we're the ones stealing from them.

Fun Facts: In preparation for this article, I decided to count how many games I own on my Steam account. The answer is 72. I was also curious what the first game I bought on Steam was. It was The Orange Box on September 18, 2007.

Please let me know your experiences about Steam below. Anyone can add me, I'm wpScraps on Steam. Cheers!