Why haven't publishers blackballed Steam?

[Dan]

Think about it, Steam is basically going to devastate the major game publishers, and I bet it's already starting to eat into their profits. More and more, the majority of gamers will switch over to online distribution, and Steam is leading the way. Sure, there are always some people that want the box, but their numbers are going to be relatively small in a few years. If developers can make higher profit margins with Steam than with EA or Activision, it's a no-brainer to go with Steam.

What surprises me is that the big publishing companies haven't reacted to the growing threat more aggressively. If this was the music industry, the publishers would be threatening to excommunicate every developer that even whispered about distributing over Steam, and they would have quickly made their own worse version of it to muddle up the consumers. Except for the dozen or so big names in game-making, most developers wouldn't have any muscle to fight back.

I think that fortunately for us now, the ball has gotten rolling, and Steam is too big to squash. Valve was pretty good about rapidly signing up a big list of games in the last few years. Small developers can afford to rely solely on online distribution and give the finger to game publishers. Soon the power balance will be shifted and it will be the publishers that will have to work for the crumbs left over in the retail market.

I just wonder what they are saying about Steam now in the boardrooms. They are probably pretty worried.

 

[99.vikram]

In the gaming industry developers rule the roost. Think about it, who's the bigger celebrity - Warren Spector, Sid Meier, Gabe Newell etc. or the suit who runs EA? Also, every major publisher has a download service of it's own, so they can't accuse Steam of anything.

 

[Raziaar]

EA has a download service of its own? I bet it's a a real soul sucker.

 

[Qonfused]

Because it's the only real system that effectively combats piracy? And why blackball when you can join in and actually make some money like so many other publishers have done so far.

 

[giant384]

steam is better then having all of the cds and cd keys to enter. steam will just have all of your games in a database in which you are free to install or uninstall at your own leisure.

 

[Cole]

I think it's because of how steam rose up. It didn't just pop one day with this huge vision of selling games. Valve made it for themselves, proved it could work for them. They got a few close partners involved and small-time indie developers which proved it could work for others. Then slowly and slowly they added onto an already proven system. Publishers didn't see Steam as a threat and by the time they start it'll probably be to late.

 

[Dan]

Because it's the only real system that effectively combats piracy? And why blackball when you can join in and actually make some money like so many other publishers have done so far.

That money won't last for long once developers start holding onto their online distribution rights.

 

[BabyHeadCrab]

Publishers don't make big money on PC games anymore (Some exceptions exist; think Vivendi Universal and EA), this started happening before online distribution models became popular. Should the console market go digital distribution it might be a bigger problem.

 

[Llama]

In the gaming industry developers rule the roost. Think about it, who's the bigger celebrity - Warren Spector, Sid Meier, Gabe Newell etc. or the suit who runs EA? Also, every major publisher has a download service of it's own, so they can't accuse Steam of anything.

Sadly untrue I'm afraid. All you've done there is given the names of three of the most successful people in the indusstry. Gabe Newell, for example, doesn't need to worry about EA pulling Valve's funding because Valve is totally fanancially independant.

The majority of game development companies eventually bow down to pressure from publishers because not to do otherwise would mean going out of business.

 

[Houndini]

nah, i think more people will still get the box because its just easier to protect, if anything happens to your computer, what are you gonna do?

 

[Dan]

nah, i think more people will still get the box because its just easier to protect, if anything happens to your computer, what are you gonna do?

Go online and download it again... was that supposed to be a trick question?

 

[Kyorisu]

EA are smart. www.ea.com/ealink/

Check out the online price differences between the US and Oceania.

Crysis - US Download price $49.95 USD
Crysis - AU Download price $99.99 AUD I assume

Throw in some currency conversion 49.95 USD = 55.1946 AUD

 

[Houndini]

Go online and download it again... was that supposed to be a trick question?

its easier just buying it and having a cd, thats just me.

 

[Kyorisu]

How is that easier? I have all my Steam games on a separate drive, god forbid I ever loose my primary drive (fat chance of that happening) and keeping in mind you can install windows over the top of a broken instance so you don't even need the separate drive/partition, having Steam is loads easier. I can just run Steam after a fresh OS install and boom all games appear fully functional, no install times, no patching processes, no BS.

 

[Sulkdodds]

I think it may be because Steam is, for now, PC only. It's a relatively small part of the market (although you'd be a pretty shit businessman if you didn't take account of it, surely).

In the gaming industry developers rule the roost. Think about it, who's the bigger celebrity - Warren Spector, Sid Meier, Gabe Newell etc. or the suit who runs EA? Also, every major publisher has a download service of it's own, so they can't accuse Steam of anything.

This is not true. The vast majority of titles are commissioned and very tightly regulated by their publishers - there are only a very few star developers that can afford to be 'celebrities' and hold on to their own sovereignty.

 

[Javert]

Publishers are watching STEAM closely, to either emulate or use themselves.

 

[Jintor]

EA are smart. www.ea.com/ealink/

Check out the online price differences between the US and Oceania.

Crysis - US Download price $49.95 USD
Crysis - AU Download price $99.99 AUD I assume

Throw in some currency conversion 49.95 USD = 55.1946 AUD

All Aussie games are more expensive online. I assume there's something political about it, but I'm still pissed.

 

[DEATH eVADER]

If developers can make higher profit margins with Steam than with EA or Activision, it's a no-brainer to go with Steam.

What surprises me is that the big publishing companies haven't reacted to the growing threat more aggressively. If this was the music industry, the publishers would be threatening to excommunicate every developer that even whispered about distributing over Steam, and they would have quickly made their own worse version of it to muddle up the consumers. Except for the dozen or so big names in game-making, most developers wouldn't have any muscle to fight back.

I just wonder what they are saying about Steam now in the boardrooms. They are probably pretty worried.

Bear in mind that publishers need developers to make them games and developer need publishers for funding (not always the case offcourse). If you have noticed the list of games on steampowered, a lot of the game are catogarised by publisher (THQ and Activision for example), as well as developers.

If developers have time and money to make their own game and sell it online over steam, by all means they should do that, but that doesn't mean publishers will be left out of the loop. Like I said publishers might bring in developers to make games for them to increase their profit margins, then its possible for publishers to sell games online as well as retail.

Another thing to point out is that with both independent and publisher-signed games on Steam and other downloading service, then they can reach out to a larger audience.

 

[99.vikram]

The vast majority of titles are commissioned and very tightly regulated by their publishers - there are only a very few star developers that can afford to be 'celebrities' and hold on to their own sovereignty.

Not strictly true. Yes publishers can get away with absurd demands (port OB to PS3!) but if nothing else works out, a developer can release his game over the internet through Steam or on their own. Publishers aren't as powerful or unionized here as in, say, the music industry.

People working on movies and other media come and go. Game developers, on the other hand, work together for many years. So the scarcity power is in favour of developers unlike in movies.

 

[Dan]

Not strictly true. Yes publishers can get away with absurd demands (port OB to PS3!) but if nothing else works out, a developer can release his game over the internet through Steam or on their own.

Provided that they have their own funding

 

[99.vikram]

Provided that they have their own funding

Publishers are still free to fund game development though, aren't they? They are just left out of the distribution loop.

 

[Dan]

Publishers are still free to fund game development though, aren't they? They are just left out of the distribution loop.

That was my whole point. I was asking why publishers weren't leveraging their funding and marketing powers to prevent themselves getting left out of the distribution loop.

 

[Vigilante]

It's not going to devastate developers, it's going to devastate retailers.

 

[Operational]

Not strictly true. Yes publishers can get away with absurd demands (port OB to PS3!)

EA offered to do the PS3 port, Valve just went, "sure".

Publishers are still free to fund game development though, aren't they? They are just left out of the distribution loop.

Some meeting that would be

Developer: so you give us funding and we'll make an awesome game, sell it on Steam and make money!
Publisher: excuse me but selling the game is our job how are we supposed to make money back on this?
Developer: ...
Publisher picks up his money bags and walks out.

 

[Dan]

Developer: so you give us funding and we'll make an awesome game, sell it on Steam and make money!
Publisher: excuse me but selling the game is our job how are we supposed to make money back on this?
Developer: ...
Publisher picks up his money bags and walks out.

Well if the publisher funded development, they would still expect to get a return on their investment no matter how it is distributed. The only difference is that now Valve has their thumb in the pie because of Steam.

 

[99.vikram]

Developer: so you give us funding and we'll make an awesome game, sell it on Steam and make money!
Publisher: excuse me but selling the game is our job how are we supposed to make money back on this?
Developer: ...
Publisher picks up his money bags and walks out.

Obviously they would be paid a cut from the profits.

 

[Operational]

But it's the publishers decision to decide whether to include Steam in their distribution method or not. They aren't going to fund developers and then sit back while they are cut out of the loop, espicially since it is their job to sell the games in the first place. There was a whole legal wrangling between Valve and Vivendi over how Steam circumvented Vivendi, a smaller developer wouldn't be able to take such a battle.
Publishers will still use Steam if they don't have their own internet distribution method because even if Valve take a slice of the pie they are still selling stuff, which is heaps better than not selling as much.

 

[Dan]

But it's the publishers decision to decide whether to include Steam in their distribution method or not. They aren't going to fund developers and then sit back while they are cut out of the loop, especially since it is their job to sell the games in the first place. There was a whole legal wrangling between Valve and Vivendi over how Steam circumvented Vivendi, a smaller developer wouldn't be able to take such a battle.

Sure, it might be just a loss of Valve's cut for developers that are funded externally (I doubt they like losing even that much), but any small self funded game company can now go straight to Steam to sell their product and cut the traditional publisher out of the loop all together. That would definitely worry me if I were Activision and it makes sense that they would aggressively try to stomp out Steam to prevent it being a viable medium so that they keep a monopoly. I think that they have just been too slow to realize and respond to the threat. Either that or they honestly have the customer's interest at heart (in which case they are defrauding their share holders by not pursuing profits).

Publishers will still use Steam if they don't have their own internet distribution method because even if Valve take a slice of the pie they are still selling stuff, which is heaps better than not selling as much.

And I don't believe that Steam is increasing the market size at all, just Valve's market share which has to come at somebody else's expense.

 

[IchI]

You forget that the publish is not just about packing it into a box and putting it on the shelves. They do advertising and marketing campagies. Without that your game is making nothing. Loads of truely good gaems fail in sales because they are not advertised or target in the right way. Any good marketing stratige can sell shit.

 

[Dan]

You can outsource marketing to anybody if you have the money.

 

[CptStern]

Think about it, Steam is basically going to devastate the major game publishers, and I bet it's already starting to eat into their profits. More and more, the majority of gamers will switch over to online distribution, and Steam is leading the way. Sure, there are always some people that want the box, but their numbers are going to be relatively small in a few years. If developers can make higher profit margins with Steam than with EA or Activision, it's a no-brainer to go with Steam.

What surprises me is that the big publishing companies haven't reacted to the growing threat more aggressively. If this was the music industry, the publishers would be threatening to excommunicate every developer that even whispered about distributing over Steam, and they would have quickly made their own worse version of it to muddle up the consumers. Except for the dozen or so big names in game-making, most developers wouldn't have any muscle to fight back.

I think that fortunately for us now, the ball has gotten rolling, and Steam is too big to squash. Valve was pretty good about rapidly signing up a big list of games in the last few years. Small developers can afford to rely solely on online distribution and give the finger to game publishers. Soon the power balance will be shifted and it will be the publishers that will have to work for the crumbs left over in the retail market.

I just wonder what they are saying about Steam now in the boardrooms. They are probably pretty worried.

because boxed sales represent 14% of the total retail sales of pc games. There's bigger fish to fry: console games ..I think this will be more of a problem if qand when consoles start offering digital distribution of full games

 

[Operational]

any small self funded game company can now go straight to Steam to sell their product and cut the traditional publisher out of the loop all together.

Indeed, there are already games on Steam that have followed this path, Red Orchestra and Defcon for example. My original point was that developers that can't self fund will still be reliant on publishers.

And I don't believe that Steam is increasing the market size at all, just Valve's market share which has to come at somebody else's expense.

I think it has especially for older and more obscurer games, market share isn't necessarily a zero-sum game.

because boxed sales represent 14% of the total retail sales of pc games.

Link requested. Reason: subject is boggled.

 

[Gray Fox]

As far as I know publishers do not mind since most publishers don't only
publish, they also develop. Publishers, especially EA are buying up studios
left and right. Internet sales simply mean they don't have to give a cut to
the retailers. Besides they have so much money they do not only need to buy
studios they can set them up themselves.

 

[CptStern]

Link requested. Reason: subject is boggled.

http://www.joystiq.com/2008/01/28/pc-game-sales-only-14-of-industry-in-2007/

remember it's just retail, no digital distribution in that figure

 

[Laivasse]

Publishers don't make big money on PC games anymore (Some exceptions exist; think Vivendi Universal and EA), this started happening before online distribution models became popular. Should the console market go digital distribution it might be a bigger problem.

I think it may be because Steam is, for now, PC only. It's a relatively small part of the market (although you'd be a pretty shit businessman if you didn't take account of it, surely).

This is why.

 

[Vigilante]

It's not going to devastate developers, it's going to devastate retailers.

QFT

.char

 

[Acepilotf14]

I hate EA Link. I bought BF2142: Winter assault or whatever it's called, and it didn't even work. It's also a lot more annoying, and like AIM and every other instant messenger out there, INSISTS on running right after the computer starts up, even if you've set it so it doesn't.

 

[Iced_Eagle]

http://www.joystiq.com/2008/01/28/pc-game-sales-only-14-of-industry-in-2007/

remember it's just retail, no digital distribution in that figure

Slightly off-topic, but I highly suggest you listen to the "Game Theory" podcast Their last episode titled "Fox News" has a great discussion on this topic.

The main thing is, we do NOT know how well digital distribution is going. You would think that if Valve sold a million copies of the Orange Box exclusively via Steam they would send out a press release. Seeing as how they sent out a press release when there were 13 million members on Steam, having a million exclusive digital distribution sales being touted even shows how great Steam is.

So until a publisher or developer decides to give some hard numbers on how well titles distributed digitally sell, we just can't know for certain.

 

[phantomdesign]

I used to hate steam; now I love it. I'm thinking of getting that package that has all the Rockstar games in it (max payne, GTA, etc . . . even though I own all the games).