SUMMARY
- Steam is the biggest gaming platform and shop on PC.
- With over a 70,000 titles and over a 100 million users on the platform, Steam has to keep up sales and make money to operate.
Since its 2003 launch, Steam has developed into the most popular PC game digital shop worldwide. There are hundreds of millions of users as of right now. Steam allows users to purchase, play, share, as well as discuss video games. It is well recognized for its online store, where customers can purchase thousands of games. It covers a wide range of genres, including racing, sports, adventure, strategy, and many more.
Steam had a record-breaking year in 2023 in terms of revenue. Full game revenues doubled from 2019 to $9 billion in 2023, according to the company’s most recent report, growing by 18%. A third of last year’s total gaming income ($3 billion) came from games published in 2023.
Interestingly, the largest winner was Baldur’s Gate 3. In total, the game brought in an estimated $657 million, or 21% of all income by the time it was released in 2023. Moreover, 91% of the total revenue from 2023’s game releases came from the top 100 new titles.
Below is a breakdown of how much money Steam makes from games and its revenue model:
Game sales commission
Revenue from game sales on the Steam platform is one of the ways Steam generates income, which it shares with developers. This fee is collected from the game developers. This is a commission-based revenue model between Steam and the game developers.
According to Steam’s report and verified game sales from 2017, the company made an estimated $4.3 billion USD from game sales. In 2023, this number has grown and clocked $9 billion USD for Steam. Of that, Steam keeps between 20% and 30% of the money made from the sales of those games.
Below is the breakdown of Steam’s commission:
- Under $10 million in revenue: 30% of each game sold.
- $10 to $50 million in revenue: 25% of each game sold.
- Over $50 million in revenue: 20% of each game sold.
Transaction Fees
Steam collects fees from users who purchase games from their platform, earning revenue from both of these sources. The transaction fee is at 5% (with a minimum fee of $0.01) of the total cost of the game. Before a purchase, the confirmation page displays the Steam Transaction Fee, which is determined by the cost of the item.
According to Steam, the 5% transaction fee is “used to protect against nominal fraud incidents and cover the cost of development of this and future Steam economy features.”
Steam Direct Fee
What Steam refers to as a “Steam Direct Fee” is an additional cost it puts on game manufacturers. The fees that Steam charges developers to release new applications on the Steam platform for purchase and usage are known as Steam Direct Fees. The Steam Direct Fee is fixed at $100 USD for each app a developer distributes onto the Steam platform.
Steam also provides developers with a range of resources and services to aid in the creation and release of their games on the platform. Feature broadcasts, player early access, the ability for developers to offer bundles and downloadable content, event and update announcements, and more are some of these tools and services. Before users can access the content, a “greenlight fee” is also charged.
Licensing Fees
The licensing costs that game developers pay Steam in order to get their content licensed for commercial usage on Steam PC Cafe also contribute to Steam’s revenue.
Through the Steam PC Cafe program, public spaces such as internet cafes, galleries, museums, clubs, and schools can license content from Steam’s collection of Steam and SteamVR commercial licenses for use in their own spaces.
Additionally, a developer must pay Steam an installation charge once and a monthly cost. This is for their content to be made available for commercial licensing under these terms. Steam PC Cafe’s costs are $29.99 USD which is a one-time installation fee. Steam then charges $9.99 USD per month, per license to keep the license active.
