Digital Distribution: Can Anyone Top Steam?

Digital Distribution: Can Anyone Top Steam?

When people think digital game distribution and online game downloads on the PC, “Steam” is the first word on people’s lips. The service that Valve built is popular, but would people ditch the dependable veteran distributor for something newer, something a little smaller and sleeker? Theo Bergquist, the CEO of GamersGate, believes the time is coming when his distribution service–and others–will nip at Steam’s heels and give the giant a few things to worry about at night.

“To be honest, we’re not afraid of Steam,” Bergquist said in an interview with IndustryGamers. “We think they are peaking now while the market is still very hardcore. In fact, we know from the feedback we receive from customers, one of the reasons we have such great growth is because many gamers out there don’t like Steam and see GamersGate as a better alternative. Once digital sales are superior to physical sales, we believe Steam will have a harder time remaining #1.”

The rest of the interview touches on what Bergquist hopes will draw PC owners from Steam to GamersGate: Loyalty programs that offer discounts to long-term members, bundles, and an ever-widening game catalogue. Pretty standard stuff that’s not unfamiliar for Steam’s users. Nevertheless, Bergquist is confident that Steam has reached its full potential, and it’s time for GamersGate to show the PC world that there are alternatives to Steam. How will the market for digital distributors look within the next couple of years? Will we be saying “GamersGate” in the same breath as “Steam?”

Bergquist does cite a major boost for GamersGate over the holiday season, wherein “our major partners’ sales were up between 120-150% for the year.” That’s good; that means there is room for competition alongside Steam, and people are interested in alternatives. But Bergquist also says that Steam will really lose (ahem) steam once “digital sales are superior to physical sales.” It’s not wholly clear if he’s referring exclusively to the PC market, or the PC and console market. If he’s talking about the latter, then yes, console retail is still pretty robust–though that matters little as far as Steam is concerned. If Bergquist means that Steam will start to struggle when the physical game market for the PC disappears completely, that statement is going to raise a few eyebrows. PC CD games aren’t impossible to find by any means, but digital distribution has withered the market to a husk–and Steam has played a huge part in the transition.

Another interesting statement from Bergquist is the declaration that Steam is peaking because the market right now is “very hardcore.” This is true: Steam users want their shooters, their real-time strategy games, their deathmatches, and their adventure titles. But Bergquist insinuates that the PC games market will eventually become less hardcore, and when that time comes, gamers who lean more on the casual side will find services like GamersGate to be much more welcoming than Steam.

So does Bergquist aim to develop a download service that will attract players from all skill levels? Not a bad idea. Casual games are distributed through Steam too, though if a mom wants Bejeweled or Plants vs Zombies, she’s much more likely to buy through PopCap’s site, or she might even find a CD at GameStop. If Bergquist can give mom a reason to grab all her favorites through GamersGate, he might be on to something.

However, if that’s his intent, he already has a big, big competitor. Casual gamers do exist on the PC, and the Internet is holding them fast. Not only will Bergquist have to get the hardcore audience away from Steam, but he’ll also have to get everyone else away from FarmVille and thousands of free-to-play massive online browser-based games.

Still, Bergquist seems driven to take on Steam with everything he has, and his energy is admirable. Confidence is no small contributor to success when you’re up against a huge opponent. Even if GamersGate doesn’t hobble Steam within the next few years, its efforts might make Valve turn around and realize that there are competitors lurking nearby, and they’re ready to fight for their piece of the future.

About Nadia Oxford
Nadia is a freelance writer living in Toronto. She played her first game at four, decided games were awesome, and has maintained her position since. She writes for 1UP.com, Slide to Play, GamePro and other publications, and is About.com’s Guide to the Nintendo DS.

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