SUMMARY
- Steam is the biggest video game sales and distribution platform for PC, developed by Valve.
- Steam was released in 2003 but didn't get traction until 2007 when major publishers started using Steam to distribute their games.
Steam is currently the largest video game digital distribution service and storefront out there. Developed by Valve Corporation, the platform celebrated two decades of its strong presence in September 2023. Although Steam was initially launched as a software client to automatically provide game updates for Valve’s games, it eventually expanded to the distribution of third-party titles in late 2005.
Apart from just game distribution, today Steam also offers several other features, such as game server matchmaking with Valve Anti-Cheat measures, social networking, and game streaming services. The functions of the Steam client cover everything from automated updates, and cloud storage for game progress, to social features such as direct messaging, in-game overlay functions as well as a virtual collectible marketplace.
The success of Steam over the years even led to the development of different sub-products like the Steam Machine gaming PCs in 2015 with SteamOS operating system and Steam Controller; Steam Link devices for local game streaming; and the successful handheld Steam Deck in 2022. But how did Steam start and get into the picture?
Need for better distribution
Valve Corporation was finding better ways to update their own published games since providing multiple downloadable patches for multiplayer games was inconvenient. The problem with patches was that it led to most of the online users disconnecting for several days until they had installed the patch.
Thus, they came up with an idea to create a platform that could update their games automatically and at the same time could implement stronger anti-piracy and anti-cheat measures.
They made the announcement in 2002 and conducted user polls, wherein they discovered that at least 75% of their users had access to high-speed Internet connections. This made them realize that they could supply game content faster directly to players through the internet rather than through retail channels.
They reached out to several companies, including Microsoft, Yahoo!, and RealNetworks, with the idea of building a client with these features, but were declined.
The rejection led to Valve beginning its own platform development in 2002. They initially used the working names “Grid” and “Gazelle”. Later, the Steam platform was publicly announced at the Game Developers Conference event held on March 22, 2002, along with the start of beta testing on the same day.
Interestingly, to highlight how easy it was to integrate Steam with a game, Relic Entertainment even created a special version of its game Impossible Creatures. Post that Valve partnered with multiple companies, such as AT&T, Acer, and GameSpy.
Eventually, mods made their way onto Steam with Day of Defeat being the first mod to release on the platform. The same year, Valve president Gabe Newell announced that they were offering a game engine license to mod teams along with distribution over Steam for US$995.
Valve officially released Steam
Between 80,000 and 300,000 players participated in the Steam beta test. It was subsequently released officially on September 12, 2003. However, the launch wasn’t smooth with the client and website facing major outages and bugs. Eventually, Steam managed to fix the issues and launched a monthly subscription to Valve games on Steam.
At the time of launch, Steam’s preliminary function was to streamline the update patches in online computer games. Besides it was an optional component for all other games. A year later in 2004, the World Opponent Network shut down and was naturally replaced by Steam. The online game features from World Opponent Network ceased to work and players were forced to switch to Steam counterparts.
In March of 2004, Counter-Strike: Condition Zero stands as the first game to launch on Steam. In November that year, Half-Life 2 became the first game to be digitally offered on Steam. The game required installation of the Steam client if anyone wanted to purchase a retail copy of it. At this time several users faced problems in playing the game.
Now the problem with the requirement of installing Steam was concerns regarding software ownership and software requirements. Besides, the platform had also faced problems with overloaded servers previously when Counter-Strike was released.
In 2005, Valve contracted third-party developers to release their games on Steam. These included Rag Doll Kung Fu and Darwinia. Within just two years of launch, Valve announced that Steam had become profitable due to some highly successful Valve games. Although the digital distribution at this stage wasn’t matching the retail volume, profit margins for Valve as well as developers were far greater on Steam.
Steam scales up
By 2007 bigger publishing houses like id Software, Eidos Interactive, and Capcom started distributing their games on Steam. By mid-year, Steam recorded 13 million created accounts and a library of 150 games on sale. The following year more significant publishers like Ubisoft, THQ, Sega, Take-Two Interactive, Activision, and Electronic Arts hopped on to the service.
2007 also saw the launch of Steam Workshop, which allowed users to create and share mods as well as other content for Steam games. Electronic Arts, in 2011, withdrew some of its games from Steam service because of its restrictive terms of service. They then began launching their games, starting with Mass Effect 3 in 2012, on its Origin service.
At that time Valve President, Newell stated, “We have to show EA it’s a smart decision to have EA games on Steam.” Between 3013 and 2014, Valve also held conferences named Steam Dev Days from 2013 to 2014.
Later, in 2019, Ubisoft announced that they would stop selling all their future games on Steam beginning with Tom Clancy’s The Division 2, The reason was because Valve would not modify its revenue-sharing model. In May the same, Microsoft started distributing its games on Steam along with their Microsoft Store.
In 2020, EA started publishing select games on Steam and offered its rebranded subscription service EA Play on the platform. By 2022, Ubisoft also announced that it would start selling its recent games on Steam once again, starting with Assassin’s Creed Valhalla. Ubisoft stated that they were constantly evaluating how to bring their games to different audiences wherever they are.
Other Steam products
Valve released the set-top box Steam Link and Steam Controller in November 2017. The Steam Link avoided the need for HDMI cables for displaying a PC’s screen, thus allowing for wireless connection when connecting to a TV, however, it was discontinued in 2018.
The name “Steam Link” was later given to the Remote Play mobile app that allowed users to stream content, from a PC to a mobile device over a network. The Steam Controller was also discontinued in 2019.
In 2022, Valve released the Steam Deck, its handheld gaming device running an updated version of SteamOS. The Deck which is designed for the play of Steam games can also be placed into a separate dock allowing the Deck to output to an external display. The Steam Deck has been a massive success.
