Is Digital Distribution Really the Future?
Ignore the inflammatory headline; the answer is clearly yes. That doesn’t change the fact that it’s happening much more slowly than I would have imagined.
Steam announced its ‘impressive’ subscriber figures of 25 million last week. While total sales up 225% in 2009 sounds impressive, it’s actually quite pathetic. Going to the store involves tiresome walking. Why aren’t more people downloading games?
The PC Gaming Alliance claims there are over 250 million online PC gamers. This implies that Steam has only 10% market share among those gamers. Steam isn’t the only digital download platform of course, but in Stardock’s last business update they estimated that Steam had 70% market share.
That suggests that people just aren’t downloading games unless there are other forces at work; let’s look at what those potentially could be.
Maybe this is too complicated vs. just putting a disc in the drive?
Baang
Lots of those PC gamers are in the East where the model of playing videogames is completely different. While in the West (N. America / Europe), consumers own their own computers and all the games, in S. Korea and China it is predominantly an internet cafe culture. The cafe owners install the games on all the machines and then you pay for a certain amount of time and play on the common computers.
I don’t know what the piracy situation is, but Steam is pretty secure. Maybe it’s tougher to install a game on multiple computers if you have to go through Steam so that’s not internet cafe friendly? Maybe internet cafes don’t want to commit a credit card number to a Steam account. Maybe non-Western countries there is far lower access to credit cards.
There are a ton of reasons for which Baang’s don’t have high Steam exposure, but if that’s the case Valve is going to have to make some changes if they truly want to become the global PC game distribution platform of choice.
Couldn't be simpler
Are we all wrong?
There is also the chance that people just aren’t interested in digital distribution. I realize that this sounds unlikely given the trends we’ve seen over the past year, but could it be possible? I don’t understand why somebody would be going to a store to purchase PC games available on Steam, and for the most part the most popular games are available on the platform.
We will get greater insight into this when Battle.net comes out, but that’s not quite a fair comparison given Battle.net is required for Blizzard games. Maybe it’s just a case of gamers who aren’t fans of the Half-Life series not being familiar with Steam.
Maybe people are just more active and willing to go to the store than I am. It’s not just about convenience, though; when you get a new computer you can just re-download all your Steam games. You don’t need to worry about the discs. It should be skyrocketing in popularity.
I doubt we’re all wrong and this isn’t the wave of the future. We all might have to come to terms with the fact that there are real obstacles to the proliferation of Steam, however, and the packaged goods trade might not be entirely dead in a decade and merely still dying.
