Paper or plastic …. or digital?

If I have not already made it clear enough, I am highly preferential to products developed and distributed by Valve.  If you were to accuse me of being a fan-boy for a company and associated products, I would bow and take it as a badge of honor.  This leaves me in something of a dilemma, as this leaves me with a great deal of interest into the new and budding digital distribution market for games, but at the same time, a great deal of personal emotional investment in one of the competing companies in this new market.

You would be right in thinking that this would skew my perceptions of the market, and whereas this doesn’t bother me all that much as I’m here to editorialize, as opposed to simply pump out objective fact, I can still post about this with a clean conscience.  I also want to stay honest and relevant however, and as a result I realize that my own delusion that Steam is the only thing from keeping the Large Hadron Collider from killing us all makes it difficult to see other companies without colored perceptions.

I want the digital distribution platform to gain credibility as a market. When this happens, there will be an upside and a downside.   The downside is that it will attract investors and a lot of money will flow in that will influence the people making my games in ways I may not want.  The upside is that it will attract investors and a lot of money will flow in that will keep the people making my games in business.

It’s not encouraging when the CEO of a well established prior partner to Valve and damn good developer, Gearbox, accuses Valve of holding a monopoly over the market with Steam.  I get mixed feelings about this.  I mean, is this a bad thing? Valve can do no wrong!  … Okay, I’m not that deluded, but I do think that the people currently running the company are smart and trustworthy, and are making money hand over fist not for manipulating the chosen market, but by inventing the market and then proceeding to do better than anyone else.  At the same time, the rest of the real world will have a hard time taking a fledgling market seriously if one company dominates the market, while a couple smaller competitors fight over the table scrap remnants.  Is this the future of software sales or just a flash in the pan? Yes, this is how I see things, and yes, I know it probably isn’t completely accurate.

This all takes me to the article that got me going on this.  It’s no surprise that digital distributors have analyst meetings, what is a surprise is that there’s something of a spat going on over a report published in one of those meetings.  Direct2Drive is disputing a report published by Stardock that breaks down an estimation of the current market share of the digital distribution market.  According to the report, Valve’s Steam platform currently owns close to, if not more than half the market for games sold and revenue collected revenue through Digital Distribution, leaving the rest of the market for the likes of D2D, Impulse and Stardock to fight over.  This makes me feel all well and good, because the company I like is ‘winning’.

But one thing I must ask is whether or not I as a consumer really benefit from such a lopsided market.  Furthermore, petty bickering and accusations of outright fabrication is not unusual for any industry, but does it really improve the industry as a whole?

The only thing that is certain is that where things stand right now, it is difficult to draw solid numbers on sales. No physical products are being sold, and privately owned businesses like Valve have no obligation to reveal sales figures, further muddling the issues, possibly to the company’s own benefit.  I’m not implying wrongdoing, only that Valve’s control over its own company gives it leverage over public companies, compounded by its apparent market dominance.

I will rue the day Valve changes hands, or becomes open to public trading, but as it is now, I feel that the company can be trustworthy to work in my best interest, as I (the paying customer) am Valve’s primary revenue incentive.  That can change.  No good thing lasts forever, I only hope that Valve and Steam last in their current form for a long time.

It’s difficult to say where digital distribution goes from here concerning the PC. I’m no business analyst, just an opinionated consumer.  Digital distribution isn’t perfect for everyone, as not all gamers have access to high-speed broadband, leaving them out in the cold if the retail PC market continues to slowly wither and die like it has been doing.

It is my hope that no matter who comes out as ‘the most profitable’, the ones making and selling games are the people who genuinely care about the quality of the product and the art form that is gaming.

tl;dr: Digital distribution for the PC is a new and expanding market that has yet to define and establish itself. Valve seems to be on top for now and I think that’s a good thing … for now. Where do we go from here?

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