Steam

Steam is a digital distribution platform for personal-computer games developed and operated by the American studio Valve, through which users buy, download, update, and discuss games, along with a store, a personal library, community hubs, and user profiles.¹³ It is the largest digital distributor of PC games, and an estimate by IHS Screen Digest credited it with roughly 75 percent of the global market for digital PC games.⁵ As of the late 2010s and early 2020s, the platform supported users running it in 26 languages and counted, by various accounts, over 120 to 125 million monthly or active users and more than 50,000 listed games on its storefront.⁷¹³

Valve first unveiled Steam at the Game Developers Conference in San Jose, California, on March 21, 2002, presenting it as a “broadband software delivery technology” that would let consumers purchase and start applications faster than installing them from a CD, while eliminating the hassle of downloadable patches and the overhead of physical distribution.⁸ Valve described the technology as something that could be implemented in any software application, offering developers an integrated package of direct content publishing, flexible billing, version control, and antipiracy.⁸ At the time of the announcement Valve was running a beta test with more than 75,000 testers and planned to expand to over a million later that spring, and managing director Gabe Newell framed the platform as a response to the rapid spread of broadband connectivity.⁸ According to a Valve poll of more than a million of its active online consumers, over 75 percent already had broadband access.⁸ The company demonstrated the technology at the conference with a test version of Microsoft’s real-time strategy game Impossible Creatures, developed by Relic Entertainment.⁸ Development on the platform had begun in 2002.³⁹

Origins and the Half-Life 2 launch

The service grew out of Valve’s struggle to keep its multiplayer shooter Counter-Strike? patched and ahead of cheaters; the idea was to create a service that would handle updating and anti-cheat protection automatically, baked into the game so that running it through the service would provide consistent and reliable support.³⁹ After a successful beta, Steam launched on September 12, 2003.³⁹¹⁰ At first it was not mandatory for all Valve games and was useful chiefly to players of titles or mods such as Counter-Strike and Day of Defeat.³⁹ Its beginnings were inauspicious: many gamers saw it as a threat to PC gaming because it required a constant internet connection at a time when only about 20 percent of American households had broadband, and its authentication servers regularly locked players out of games they had purchased, compounded by slow download speeds and a clunky interface.¹¹⁰

The release of Half-Life 2 in 2004 transformed Steam from an optional extra into a necessity, since the game required a Steam account and an internet connection for authentication even for buyers of the boxed retail version.³⁹¹⁰ The shift marked a transition from the old model of digital ownership built on CDs and CD keys to a new one in which game licenses were tied to online accounts.¹ Once authentication was completed, owners of either the retail or the Steam version could play the game in single-player offline mode.³⁹ When the long-awaited sequel launched, Steam’s servers buckled under demand, locking players out for days — a failure conspicuous enough to draw BBC coverage.³⁹ The idea that a single-player experience had to be “unlocked” remotely, even when buyers held the discs in hand, struck many at the time as an unnecessary intrusion, and forum complaints predicting that the service would ruin PC gaming lingered for years.³⁹

Valve’s Doug Lombardi later argued that the Steam authentication tied to Half-Life 2 also eliminated “Day Zero” piracy — the window between a game going gold and reaching store shelves — noting that pirated final versions of Doom 3, Halo 2, and a Grand Theft Auto title circulated before their store releases in 2004 while Half-Life 2 did not.²⁴ Valve’s approach was to tell buyers to pre-load the game regardless of where they purchased it, with the shipped disc rendered useless until activated on launch day.²⁴ Lombardi also pointed to Steam, alongside Xbox Live, as having displaced the old server-browser model of multiplayer gaming with friends lists that grouped players of similar skill and mindset.²⁴

From client to storefront

From 2003 to 2005 Steam remained relevant mainly to Valve’s own games, functioning as a launcher, updater, and server browser rather than a store.³⁹ That changed in 2005, when Ragdoll Kung Fu and Darwinia became the first non-Valve games sold on Steam, marking its shift to a fully-fledged storefront.¹¹⁰ By 2007 Valve had signed major publishers including id Software, Activision, Eidos, and Capcom, and had quietly improved the service to the point of near-reliability; where Half-Life 2’s launch had been a disaster, by 2007 a comparable failure for a major release seemed implausible.³⁹ Lombardi noted that Valve sold more copies of Half-Life 2: Episode Two on Steam than of Episode One, even as retail PC sales declined, and presented the platform’s growth as evidence that PC gaming was healthier than commonly reported.²⁴

The platform accreted features through the late 2000s. In 2006 it introduced digital sales, free demos, and HD videos, and with nearly 100 games available the question of catalogue visibility began to emerge.¹⁰ In 2007 it added search, integration of Metacritic ratings, Top Sellers and New Releases filters, community forums, and the Steam Community client features such as stat-tracking, friends lists, community groups, and voice chat.¹⁰ In 2008 the rollout of Steam Cloud provided automatic synchronization of game saves, key bindings, and configuration settings across computers, and the platform’s user base had passed 20 million.¹⁰ By 2009 Steam was framing games as impulse buys with “Under $5” and “Under $10” categories, and in 2010 it added Mac support, its first push beyond the Windows market, while presenting discounts as percentages to make bargains easier to spot.¹⁰

Features and scale

The contemporary platform is organized into four main parts: a Store for buying games, a Library holding the games a user owns, a Community of game hubs and user groups, and user Profiles.¹³ The Store offers filtering by category, tag, and genre, a personalized discovery queue, a wishlist, and frequent discounts, including large seasonal sales in summer, autumn, winter, and spring with reductions of up to 90 percent.¹³ Games carry user reviews summarized on a scale ranging from “Overwhelmingly Positive” to “Overwhelmingly Negative,” and a Points Shop lets buyers spend Steam Points earned with purchases on profile customizations.¹³ The Library displays owned games, playtime, achievements, and downloads, which Steam can schedule for off-peak hours.¹³ The Community encompasses the Steam Workshop, through which users share user-generated content such as maps, mods, and 3D models for supporting games, and the Steam Market, a marketplace for in-game and Steam-related items.¹³¹⁶

Steam’s commercial scale grew steadily. The proprietor of Steam Spy estimated the platform generated approximately $4.3 billion in sales in 2017 — its biggest year to that point — a figure that excluded revenue from downloadable content and microtransactions, against a total dedicated digital PC game business valued at $23.9 billion that year.⁶¹¹ By that estimate Valve held at least 18 percent of the dedicated digital PC game market, and likely more once in-game purchases were counted.⁶¹¹ IHS earlier estimated that Valve generated $1.1 billion in 2012 from full-game downloads, and DFC Intelligence put digital distribution of PC games for 2013 at $5.5 billion of a $21.4 billion computer-games market.⁵

Beyond the desktop client, Valve extended Steam into hardware and operating systems. In 2013 the company announced “Steam Machines,” consoles built with more than a dozen partners and running a Linux-based “Steam operating system,” SteamOS, positioned to challenge Microsoft and Sony in the roughly $15 billion home-console market and to pass up the licensing fees console makers charged developers.⁵ Valve planned to introduce the partner companies at the Consumer Electronics Show in Las Vegas in early January and to hold a developers conference the same month, and worked with music and movie services to deliver streamed entertainment to the machines.⁵ SteamOS added features such as family sharing and in-home streaming across platforms.⁵ The platform later expanded to handheld hardware, the Steam Deck, and to a free Steam Mobile App offering account protection through two-factor authentication via Steam Guard, remote downloads, and access to the community and marketplace.¹³¹⁴