Retailers fear steam

[Paelos]

At which point steam is jumping up and down going "pick me!".

Though if it's a choice between money going into the retailers hands or the developers hands I'm generally happier with the latter. But the problem is the developers also want games to carry premium pricing which provides a strong incentive for people to try and find ways to get the games cheaper (rental, re-sell, pirate). They need to both embrace online sales and pass the discounts from the more efficient distribution and death of rental / re-sale onto the consumer. Which they're very unlikely to be interested in considering.

I think we're all happier with the money going to people that actually create, rather than the retailers. In the case of PC games when they are available for download, the B&M stores are fancy shippers. I don't mind throwing a cut to Steam because they actually provide a service, and they open up more opportunities to indie studios, as stated.

[Azazel]

Fuck Brick and Mortar stores in the ear when it comes to PC games. IN THE EAR. Steam wasn't anywhere near the successful service it is now 5 years ago when those same B&M stores started assfucking the PC game market - their declining PC game sales are mainly due to their policies of pushing those PC games into the darkest, dustiest corners of their stores. On top of that, they started refusing to carry in stock copies of any PC game that wasn't published by one of the big name pubs, so their dark, dusty shelves looked like 60 copies of EA/Activision and 0 copies of anything else. Steam is the financial fucking savior of the PC game industry and any PC game dev idiotic enough not to use them deserves to go out of business. If the B&M stores had started doing their digital distro services 5 years ago instead of the shafting given to the PC game industry described above, this wouldn't even be an issue.

Well we know this is because the EBgames business model is built on being a pawnshop for secondhand games, and it's much harder to do so with PC games. Did I already say this the other night? I thought I did but might not have hit post.

[Azazel]

I'm hoping that the next generation of consoles goes DD as well, though there are other issues at play there (why stock a low-margin gaming console if you're not going to be able to sell software to that guy later?).

No, fuck that to hell and back, unless you want to only have the option to purchase a 2-year-old game digitally for $50 when right now you could get it new for half of that or less if you shop around. That's the issue Aussies face right now with Steam - being able to buy Steamworks games from the UK or US for half the local RRP and then add it to a steam account is the way to go. (And the way I buy console games, as well).

[UnSub]

Well, except that specialist game retailers like EB devote only a tiny fraction of their store space to PC titles, and have done so for several years since before Steam became the PC juggernaut that it is today.

The heavily PC game stores I used to go to when young either flipped to consoles or went out of business. Buy-burn-return was an immensely popular strategy.

At the same time, online distribution has improved and makes direct retail purchase less attractive.

Games Brief puts forward the suggestion that this bitching is actually less about Steam and more about XBLA - that if retailers kick out Steam titles, they can then move 'on principle' against console-based content distribution systems.

[Tebonas]

Are the retailers really that deluded that they think this will kill Steam and not them?

[tgr]

I was discussing the whole deal with used games with a friend of mine a few months back, and he was initially adamant that selling and buying used games were literally stealing from the developer/publisher. I tried to push him into telilng me why a game should be different in this regard compared to f.ex a book, but he wasn't really able to say exactly why. He tried a few arguments about how "the game was in just as good condition as when it was bought, whereas the book isn't". While there can be something to this, most books I read are in pretty near new condition when I'm done with them, and they certainly aren't a problem with re-reading quite a few more times, and the disc the game is on can get scratched and ruined, so I'm not quite buying this argument.

What made him relent, however, was when I claimed that for some, selling the game they've beaten can actually help the developers/publishers, since 1) the customer might take this into account when buying the game in the first place, thus accept the high price, 2) the customer recoups some of his costs and thus get more funds available with which he can buy new games, and 3) other gamers who don't have the funds to purchase a game at full price still has the possibility to buy the game used for less, and thus more people get to enjoy what the developers created.

But of course publishers will be inclined to see this as very black/white.

[Ingmar]

Yeah I wouldn't really care much if online distribution put a bullet in brick/mortar video game stores. (Mind you Fry's always has a great selection of PC stuff.)

This isn't a situation like brick/mortar pnp game stores (or even indie book stores vs. bigbox vs. amazon) where they actually provide a useful value added service that makes them worth preserving.

[IainC]

Yeah I wouldn't really care much if online distribution put a bullet in brick/mortar video game stores. (Mind you Fry's always has a great selection of PC stuff.)

This isn't a situation like brick/mortar pnp game stores (or even indie book stores vs. bigbox vs. amazon) where they actually provide a useful value added service that makes them worth preserving.

They are important to the current business dynamic however because they buy a lot of games and they pay for those games in advance. Without that front-loaded income channel, games distribution is a much riskier proposition - net effect games development becomes even more conservative.

[Kageru]

The games brief article linked above doesn't seem to make a whole heap of sense to me. There's lots of other channels for selling consoles, new release games and attachments and that's the big retail and electronics stores. Consoles are now a big enough business they're sold at the same places that sell TV's and stereo systems. And those people are interested in big volumes and not interested in the second hand trade.

But the main reason is that I don't believe the retailers are planning that far ahead.

Also the fears of valve being a monopoly on the same site seem ridiculous. To be a monopoly I would have to be unable to get a computer game from anywhere else. And given they have no control over production of games, and that setting up an alternative digital distribution is something lots of people could and would like to do (if valve went evil), there's really not much they can do. Balanced against that is them making the PC game industry something with a future.

[tgr]

Technically, given that definition of a monopoly, MS doesn't have one either since I can get both OSX, Linux and various BSD distros.

[Lantyssa]

That's probably console devs though.  The PC resale market is miniscule now, and I don't think has ever been all that large.  I actually find it rather funny.

The retailers' practices encourage digital distribution.  PC games took well to this, but publishers have touted consoles because they're harder to pirate.  Retailers resell games, but console devs complain about being cut out of the loop by corporate sanctioned piracy.  Round and round we go.

[tgr]

That's probably console devs though.  The PC resale market is miniscule now, and I don't think has ever been all that large.  I actually find it rather funny.

Actually, it's rather ironic that the PC games were what got the "online activations" if it's that small compared to consoles. I wouldn't be surprised if the PC resale market was pretty much non-existant though, since almost all the B&M stores I've bought games from have had a "you open it you keep it" policy to PC-games, whereas console games usually had a 3-for-1 exchange policy in the same stores. That and "return within 2 weeks to get a different game", which I used pretty damn quickly for the copy I got of GRAW, I can tell you.

[Kageru]

Technically, given that definition of a monopoly, MS doesn't have one either since I can get both OSX, Linux and various BSD distros.

I'm no lawyer but I believe a monopoly doesn't mean it has 100% of a market. Just that it has a dominant position and is abusing that for an unfair market advantage. Windows was busted for numerous abusive uses of its dominant market share. I also consider it a more serious case because it controls the foundations of a market.

Steam is just a distribution network. Its existence does not disallow or even make particularly challenging setting up a rival service, and any attempt by Valve to abuse its power is very likely to lead to such a service coming into existence. The steam services come closer but since they remain optional, and don't stop the game being sold through other channels, I can't find the interest to care much. It's also in active competition with the game retail market since that is ultimately just another distribution network, albeit one determined to kill itself.

PC games took well to this, but publishers have touted consoles because they're harder to pirate.

Strangely enough all the PC gamers I know are playing subscription games, games with a substantial online component or steam games. Whereas most of the console gamers I know have a hacked XBox360. I even saw someone with a hacked Wii (though it is still gathering dust). I really wonder what the piracy rate on consoles is.

But I do agree the retailers love consoles because they have the highly promoted "big name" games, the games often have a fairly short time to complete, and they're eminently suited to resale.

[Hawkbit]

I'm hoping that the next generation of consoles goes DD as well, though there are other issues at play there (why stock a low-margin gaming console if you're not going to be able to sell software to that guy later?).

No, fuck that to hell and back, unless you want to only have the option to purchase a 2-year-old game digitally for $50 when right now you could get it new for half of that or less if you shop around. That's the issue Aussies face right now with Steam - being able to buy Steamworks games from the UK or US for half the local RRP and then add it to a steam account is the way to go. (And the way I buy console games, as well).

This is my big issue with PSN - nothing ever goes on sale and game values never drop in price.  I can understand a big budget title at $50-60 for the first year, but after a time they need to drop the price if they want people to buy.  Like Steam does.  Sony just needs to get onboard.

I check Steam almost every single day to see what is on sale.  PSN, not so much because nothing is on sale.

[Riggswolfe]

I can sort of see where the stores are coming from. If I buy a game off of Steam. Good. I'm happy with it. But if I buy the box, I want the game and don't want to have to use Steam. For example, I went to the midnight launch for FO:NV, came home with my shiny new box and then couldn't play for a bit over 2 hours because I had to wait for Steam to unlock my game? Really? Fuck you Steam. I bought the box so I wouldn't have to screw with that stuff.

Frankly, if I buy the box I see no reason I should be forced to use Steam to activate and play my game.

[Thrawn]

I can sort of see where the stores are coming from. If I buy a game off of Steam. Good. I'm happy with it. But if I buy the box, I want the game and don't want to have to use Steam. For example, I went to the midnight launch for FO:NV, came home with my shiny new box and then couldn't play for a bit over 2 hours because I had to wait for Steam to unlock my game? Really? Fuck you Steam. I bought the box so I wouldn't have to screw with that stuff.

Frankly, if I buy the box I see no reason I should be forced to use Steam to activate and play my game.

Which is a very valid complaint but not at all what retailers are upset about, I doubt they care what drm or whatever we have to jump through as long as they make a box sale. 

[Lantyssa]

It's also a great way to force retailers to adhere to the street date, which they seem to be getting worse and worse about breaking.  Another reason to write them off.

[IainC]

I can sort of see where the stores are coming from. If I buy a game off of Steam. Good. I'm happy with it. But if I buy the box, I want the game and don't want to have to use Steam. For example, I went to the midnight launch for FO:NV, came home with my shiny new box and then couldn't play for a bit over 2 hours because I had to wait for Steam to unlock my game? Really? Fuck you Steam. I bought the box so I wouldn't have to screw with that stuff.

Frankly, if I buy the box I see no reason I should be forced to use Steam to activate and play my game.

Which is a very valid complaint but not at all what retailers are upset about, I doubt they care what drm or whatever we have to jump through as long as they make a box sale. 

It's exactly what they are upset about. They want to sell a game and for someone to be able to play that game from the box without needing to open Steam first - not because they care deeply about the user experience but because they want to limit the exposure to a competing service that is bundled in the box they just sold.

I don't want to sound like the apologist for B&M stores because frankly I agree that they suck at the consumer end, but most of you in this thread aren't grasping the reasons why they are still important to publishers. It's easy for you as a consumer to go 'fuck Gamestop/HMV/EB/Walmart in the ear, I'll get all my stuff from Impulse' but it's a lot more nuanced for the publishers who get a lot of value out of their relationship to B&M retail.

[DLRiley]

It's exactly what they are upset about. They want to sell a game and for someone to be able to play that game from the box without needing to open Steam first - not because they care deeply about the user experience but because they want to limit the exposure to a competing service that is bundled in the box they just sold.

I don't want to sound like the apologist for B&M stores because frankly I agree that they suck at the consumer end, but most of you in this thread aren't grasping the reasons why they are still important to publishers. It's easy for you as a consumer to go 'fuck Gamestop/HMV/EB/Walmart in the ear, I'll get all my stuff from Impulse' but it's a lot more nuanced for the publishers who get a lot of value out of their relationship to B&M retail.

Ok from what I understand.

Retails Big Cut + Publisher Cut + Developers Small Cut.

Steam Small Cut + Publishers Cut + Developers Bigger Cut.

[IainC]

Ok from what I understand.

Retails Big Cut + Publisher Cut + Developers Small Cut.

Steam Small Cut + Publishers Cut + Developers Bigger Cut.

You understand wrong.

Retail: We will buy X number of boxes. You'll sell them to us for Y price and we will sell them at whatever we think we can get for it. Here is a huge chunk of cash equal to X*Y dollars to pay for those boxes upfront.

Steam: We will distribute your game. Every time someone buys it we will send you Z dollars where Z dollars is the RRP minus our cut because digital distribution isn't free.

Z dollars and Y dollars may well be the same depending on the deals you've struck with your distributors and with Steam.

Regardless of the channel, the size of the developer's cut is the same because the publisher pockets any difference.

[DLRiley]

I see thanks.

[Kageru]

Regardless of the channel, the size of the developer's cut is the same because the publisher pockets any difference.

So long term, if steam or something similar is the primary medium of transfer you can get rid of the publisher and pocket the difference.. win!

If there's an "activation time" on a steam game then that's surely something the publisher has told steam to put in place. I very much doubt steam has any interest in you sitting there with a box in your hand unable to play. Or them with bits on their disk they won't let you buy. Of course you could argue they shouldn't let the publisher dictate release times (and bloody piratical regional pricing) but that's not really their call since they're just a distribution channel (and don't have that sort of power).

These days with lots of games needing to communicate with the companies DRM server before you can play it is not unique to steam either. Regardless of where you bought the box.

[IainC]

Regardless of the channel, the size of the developer's cut is the same because the publisher pockets any difference.

So long term, if steam or something similar is the primary medium of transfer you can get rid of the publisher and pocket the difference.. win!

Now you're in a whole different set of questions. Publishers don't just pay for boxes to be printed and DVDs to be burnt. They assume a lot of the risk of a project through investment during development - it's the reason why they have such a lot of influence over the finished product. Obviously studios who are owned by a publisher have no choice about cutting out that part of the chain but even independent studios generally need to find a publisher well before they have a product that's ready to go to beta. Self publishing is possible for very small projects but it gets harder as the headcount at the studio increases.

As well as providing the cash needed to finish the project, publishers will also be a one-stop shop for multinational distribution and marketing. That's very valuable to a developer who largely won't have that kind of reach or leverage and for whom it's not worth building those networks for one release every couple of years.

[Chimpy]

I understand fully the whole buy in advance thing.

The problem is with the article is that it really seems that it is only the niche video game retailers like GameStop that are the ones bitching, and they don't really even buy that many boxes of non-BlockbusterBlizzard games anymore anyway. If this torches and pitchforks thing included Best Buy and Amazon then it would definitely have more traction/point.

[Sky]

What about when Valve just cuts out publishers completely and developers can direct distribute through steam?

One can dream.

[kildorn]

I can sort of see where the stores are coming from. If I buy a game off of Steam. Good. I'm happy with it. But if I buy the box, I want the game and don't want to have to use Steam. For example, I went to the midnight launch for FO:NV, came home with my shiny new box and then couldn't play for a bit over 2 hours because I had to wait for Steam to unlock my game? Really? Fuck you Steam. I bought the box so I wouldn't have to screw with that stuff.

Frankly, if I buy the box I see no reason I should be forced to use Steam to activate and play my game.

The reason steamworks is becoming more and more popular on the dev side is that Steam is taking the position of "let me handle DRM, patch distribution and a few other minor features (cloud saves, etc) for you", and the dev houses overwhelmingly like the idea of offloading all that crap.

The up shot for steam is that A) they get the devs in bed with them early, so it's an easy pitch to say "and how about we sell that game, too?", and it gets their name everywhere to the consumer. The second part is what B&Ms are upset about, but the problem is that they need to find a way to compete with what is essentially a better service. Steam needs the advertising to penetrate the market since they lack the stores and TV advertising hookups (PREORDER FROM EB! ads all over TV, but you've never seen Steam run a commercial saying they have the same preorder bonus), and the B&Ms need people to never ever see the better product's logo anywhere and actually go look it up.

[tgr]

I thought developers could publish their own game through steam already if they so chose.

[Samwise]

the problem is that they need to find a way to compete with what is essentially a better service.

Way back when, this was my view of why Napster freaked so many people out, and that it had very little to do with the ostensible "dirty pirates stealing our shit" angle.  As people figure out that you can provide better service for cheaper by selling downloads directly rather than selling physical media through a bunch of middlemen, the people who make their livings as middlemen for physical media sales are looking at a very bleak future indeed.

[IainC]

What about when Valve just cuts out publishers completely and developers can direct distribute through steam?

One can dream.

For any but the smallest of operations or a few atypical fully funded studios, they still need the cash to finish their game from a publisher. Steam may handle distribution but they certainly aren't going to fund a dev studio trying to bring their game out of alpha.

[Koyasha]

Advertising is also a major issue in this case.  If you want anything but small scale sales, you need lots of advertising and that's beyond the purview of Steam.  The networks that IainC mentioned aren't just a matter of distribution, but also a matter of getting ads placed in all the right spots in order to get your game known.

Sure, small games do fine simply by getting Steam to put them up as featured games, but that's not gonna be enough for a major title, so the publisher has importance in both funding and advertising even if you cut them out of distribution entirely.

It does, however, mean that it's possible that in the future developers will have a better position to deal with publishers from, perhaps?  If they can separate the roles into discrete entities - distributer like Steam, funding, and advertising, each separate instead of having all those things wrapped up into one, developers might be in a better position.  Maybe.  Just speculating on that.

[Paelos]

Sure, small games do fine simply by getting Steam to put them up as featured games, but that's not gonna be enough for a major title, so the publisher has importance in both funding and advertising even if you cut them out of distribution entirely.

I'm calling bullshit on this. I don't think the advertising for PC games is that critical in terms of expense if the game is good. Key part there, GOOD! Taking the publisher out of the equation could possibly open the door to better development.

[Kageru]

Doesn't matter anyway. If we are talking about the "publisher" as being the person who pays for the game to be made and advertised then steam is somewhat neutral. Just another avenue to use or not. And since they own the product they have a lot of power. I'm free to think that any PC game publisher who doesn't see online distribution as a way to reduce costs, another marketing tool, a way to make DRM more palatable and affordable and to kill the resale market is mentally retarded but I respect their right to do so.

It's the distribution (moving boxes) and retail (boxes on shelves!) layer that steam is challenging. And as a PC gamer any difficulties they face fill me with happiness.

[UnSub]

The games brief article linked above doesn't seem to make a whole heap of sense to me. There's lots of other channels for selling consoles, new release games and attachments and that's the big retail and electronics stores. Consoles are now a big enough business they're sold at the same places that sell TV's and stereo systems. And those people are interested in big volumes and not interested in the second hand trade.

But the main reason is that I don't believe the retailers are planning that far ahead.

Also the fears of valve being a monopoly on the same site seem ridiculous. To be a monopoly I would have to be unable to get a computer game from anywhere else. And given they have no control over production of games, and that setting up an alternative digital distribution is something lots of people could and would like to do (if valve went evil), there's really not much they can do. Balanced against that is them making the PC game industry something with a future.

It is more attractive for MS to sell straight to the Xbox via digital download because it does save them physical creation and distribution of product. They can pocket that difference (even if they then sell it at a cheaper price). Remember: the console itself is a loss leader, games are the profitable part.

Plus there is no more used game market for DD titles. That would hurt even GameStop.

Valve doesn't yet have a pure monopoly, but it certainly dominates the market. If it wanted to use its market power to force certain things that would benefit Valve, they currently have the influence to do it. There are several different competitors to Steam, but none have the range plus in-built player base or public acceptance of their DRM system. If you are looking to get onto a particular DD service, Steam is the one you want. Provided Valve / Steam doesn't go evil against the players, just the developers, most people won't care.

[Kageru]

Because it's only a monopoly over online distribution which is relatively easily reproducible (and in competition with retail). They can't say "your game is not going on our platform" because they don't control the production or consumption of games. So yes, most people correctly won't care.

[Tebonas]

A developer who finds Steam unacceptabe can go elsewhere without a problem, though. Steam is only as strong as its products and they don't even demand exclusivity. Companies can float the boat with other digital distribution systems while they still use Steam.

Market domination that depends on both the goodwill of the producers and the customers is no monopoly. The only power Steam has is the market share, which they lose once developers don't give them games anymore.