Brad admit

Brad's admitted as much.   This is why competition is a good thing, even if you like the monopolist.

I havent played Minecraft myself, but that game shows that Steam is not needed to reach to a big audience.  I know, it's probably a rarity, but here this game is sold to people from the developer himself, without any middle man.  This middle man that brings the game to people  is the reason touted as to why devlopers "need a DD service" like Steam.  I'm really interested into seeing when technologies like html5 become a standard tool in every indie game maker and we start seeing them offering their games entirely from their own websites.

Many indie games already do offer direct from websites.  Many of those folks actually prefer you buy from them directly over using a DD service such as Steam or Impulse, due to getting a better cut of the revenue.   I wish Impulse let us attach games to it and receive updates that way.  I know Brad has mentioned allowing certain devs to do this, but no one took him up on the offer.

For every game like Minecraft that manages to garner a lot of publicity on its own and get big, there's dozens (or even hundreds) that don't. Something like Recettear was from an unknown company and was basically an unknown game until it appeared on Steam's front page. It caught enough eyeballs there that people gave it a look, and then it being a great game got word of mouth going.

Similarly, I first bought AI War because I saw it on sale on Impulse. I'd never heard of it before, and it's not like Arcen has a marketing budget to push it on people who aren't paying attention. I mention it because it just reappeared in the Impulse top 10 this week (due to a new expansion and a sale). How many of the people buying the base game this week would have bought it directly vs how many saw it on Impulse like I did?

DD services bring eyeballs, and for an indie game company 70% of a $20 sale (and 3 expansions on top of that...) is a lot better then 100% of $0 in sales because people don't know the game exists. It's a good deal for everybody involved.

Yep. Oh, you can be sure I'd insist on harvesting organs if that happened.  There's no such thing as a good monopolist.

People have short memories.

In the 90s, Microsoft was the darling and they could do no wrong. Lots of people just hoped OS/2 died off so that we could all "standardize" on Windows.  

When people like me pointed out that if OS/2 died Microsoft would probably stop charging only $6 for Windows for workgroups 3.11 to OEMs but instead drastically raise their prices the Windows fans said "If they tried that, people would switch to something else."

Today, the OEM price for Windows 7 is over $70. It's non trivial to try to create a competing platform once competition has been killed off in the first place.  You want alternatives.

As both a game developer AND someone familiar with digital distribution, I can tell you that one of the biggest expense suckers on digital distribution is putting up updates to existing games. Right now, Steam and Impulse do this for developers for free because, if they didn't, developers would go to the other platform.  

Ask an Xbox developer how many free updates they're allowed to put up. Or maybe a PS3 developer.

You definitely don't want there to be only one choice in a given market. You always want an alternative to keep the other guy honest.

If you're putting out a game on the 360 or PS3 you are forced to agree to MS or Sony terms of doing so. This is because the 360 and PS3 are completely closed platforms, *not* Digital Download providers. Nothing gets put on those consoles until their owners say so.

The same case is impossible to have for PC, it's a completely open platform. Valve has no power to say what can and can't be released for PC and how. It only has power over its own service, which is a Digital Download service with (currently) optional extras. People use it because it's easy, friendly, and convenient. Even if it is the *only* service, Valve still can't force publishers to use it, and publishers are increasingly adopting their own stores (see: EA, MS, Ubi). Even if Valve destroys D2D and Impulse (is GamersGate still tied with Paradox?), what's it going to do against the publishers' own stores? Absolutely nothing. It has no power to dictate what the publisher does - and for all its profits, EA and Ubi are still greater.

Part of the issue of a monopoly is that it is difficult (nearly impossible) for viable competition to form and sustain itself. If Valve ever gathers sufficient control over digital distribution, they may emulate many of the actions taken by past monopolies in order to prevent competition. Publishers will have to make a coordinated effort to break Steam's control, and users may side with Valve, as they have in the past. If users support the monopoly, consider that an additional barrier to entry.

There's one very good reason why take-up of Steam is so high in Australia: price.  (Note below USD prices are equivalent to AUD ATM as we have currency parity).

Dragon Age II:

EB: $88

Steam: $59.99

Rift collectors edition:

EB: $108

Steam: $59.99

Witcher 2 premium edition:

EB: $88

Steam: $49.99 (currently 10% off for $44.95)

Shogun II:

EB: $98

Steam: $89.99

Why would I bother buying B&M when I can get games cheaper on Steam?  And this isn't even sale price.  Wait till a Steam sale, get them for 50% off!  Steam wins my patronage by being the best price.  If other platforms do the same, then I'll buy from them.

I don't even know how to respond to this. You clearly weren't around during the 90s when CompUSA set the prices for games and such.

If Steam were the only viable option for digital distribution, the PC would effectively be a closed platform.  Companies with their stand alone stores? Please. All Valve would need to say is that if they don't play ball they won't list their title on Steam.

Personally, I really REALLY don't like having to be in this business at all. It seems like someone else should be doing this. But if not Impulse who? Everyone else has already caved in. Luckily, Impulse has a good margin set up because of our ability to create software robots (i.e. only takes a handful of people to run it).  So it's not going away any time soon and we don't have to accept Steamworks titles.

As a gamer, I like Steam. I don't even have a problem with Steamworks. And if I knew Gabe was going to call the shots forever, I would probably not care as much. But I don't know that. None of us know that. And unfortunately, those of us "in the know" are very aware of what will happen if anyone gains a monopoly.

Heck, without even violating NDA, I can tell you that Microsoft's plan for GfW was to charge developers money to release updates after the second update. That was going to be their business model. Luckily, Steam, Impulse, etc. keep that from happening. 

In the long run, I don't think Steam is going to dominate. It'll become clearer as the year progresses why that's the case.

It's official. Robots are running Impulse. IS YOUR DATA SAFE FROM THE NEXT WORLD ORDER? Call 1-800-NOROBOTSINMYLIVINGROOM and demand that ALL your data is handled on paper only by human beings. Be part of the DIGITAL REVOLUTION as your ancestors envisioned it. I am speaking from you, as we speak, in the present.

/end silly

Frogboy, didn't you say just a few days ago that Impulse was SDs most profitable section? It can't be all bad.

The one thing I'd like to see Impulse do, is something you've been doing- cultivate the little guys and indie shops.  Games like Din's Curse and Shira Oka.  (plan to pick the latter up whenever it hits a sale).  

The one thing I feel bad about is that often I'll find a game on Impulse, then follow up by going private, because I want to give the developer the full cut.  Like Din's Curse and the expansion (seriously guys, Din's Curse is awesome)

I do worry about the effects of a Steam monopoly myself, and part of me thinks Impulse could be doing more/improving its service more then it has.  With Elemental, the Impulse integration impressed me, which makes me wonder why you guys don't think it's ready for prime time.

Internet Nerd: try Gamersgate for Shogun 2, they have a good discount offer I think.  (still have to use Steam)

One thing I've always wondered is why you didn't push for Impulse to be GFWL live with your current setup.  I really think that would have ended up as a win-win potentially.

Class action lawsuits for illegal and shoddy business practices?

Price is the same as Steam pricing at GG: $89.95.

I hate regional pricing.  *sigh*

You mean to force publishers to a certain behaviour, like you are trying by not selling Steamworks games?

This may work on some small indie productions but if Valve starts denying big AAA games, people will just move on and buy them somewhere else. Do you really think gamers will just stop buying the next Call of Duty or GTA, just because they are not listed on Steam? As many said before, the PC is an open platform. If publishers don't like the conditions of Steam, they will just sell it somewhre else. If publishers don't like the conditions of Xbox Live or PSN, they are screwed.

Well, according to Gabe Newell he isn't really calling the shots at Valve. Taken from an recent interview:

One thing that may or may not be obvious to people from the outside is that a lot of our decisions internally are heavily affected by people's interest and excitement in working on it. And it’s not because we’re self-indulgent employers. It’s that there’s a huge amount of information encoded in that kind of voting. So essentially creating a marketplace internally for ways that people can invest their time. The biggest danger for the company is that any one person starts making decisions for everybody else. Because even ‘super-genius Gabe’ is full of hideously bad ideas.

The easiest way for us to know I’ve had yet another really bad idea is that no one wants to work on it. When a bunch of people really want to work on something there’s probably going to be a lot of value. The PS3 for Portal 2 really came out of that. I mean, we were right at the sort of tipping point of ‘do we, or don’t we’? I personally was really excited to work with Sony to get Steam running on the PS3 because I think there’s a lot of benefits to us and a lot of benefits to our partners if we do that. But the tipping point was that guys like Vapally and Sergay totally wanted to work on the PS3 again because they’d worked on it before they came to Valve. So that was the thing that made it easy to make the decision. I don’t know if that marketplace of where you spend your time has really been discussed at Valve in the past and the public but it really influences a huge amount of our decision-making. [...]

The whole design of the company is built around people self-managing. So what we look for people who are very capable of doing their work, who are good communicators who also have experience managing large projects. The reason that they need to know how to manage large projects is that they need to know when something that they’re doing is irrelevant to other people and when what they’re doing has to be known about by other people. In other words, they have to make the decision that I’m doing something now that I have to tell other people about because it’ll have an impact on support or have an imapct about how we talk about the product. So each person essentially has to know how to run their own company even though they’re not having to make those decisions. They have to know what the side-effects are and when they should get other people involved. So for those kinds of people we really want them to be managing their own time and the most important decision they make is what it is they should be working on. So we’re really good at invention and we’re not nearly as good as sort of a hierarchical command and control system at doing repeatability and measurability. Those are the consequences of the kind of organization you make. We very much optimize towards the autonomous agent making its own decisions about what it does. So what that means is I don’t ever tell anybody what to do. I always ask people what it is that they want to do because there’s a lot of good data there. So we have people at the company who work on every product and we have other people who don’t work with anyone else at all and they’re off doing their own purely individual contribution. They’re a project team of one. And each person is expected to make their own decisions about that and to be making those decisions in the context of what can I do today that is of the greatest benefit to customers. [...]

The reason that we do that is that it’s fun for really talented people…I mean, the average person here can pick up a phone and have a new job in five minutes. We have probably 20 people who could pick up a phone and have a 20 million dollar game deal signed within a day. And they’re here because of the environment and the colleagues that they work with. That’s what we optimize for. We optimize so that those kinds of people, which people either are or are becoming, have the best environment for what they do. [...]

Source: Steamcast interview

It's true, I mean that's basically how brick and mortar stores squashed online sales for so many years, and why digital sales of games have only recently become a big business. And they weren't even a monopoly, it only took a one or two big players that make that threat to make it not viable to mess with them.

I'm also not too worried about Steam being the only option though, although it would certainly be bad if they were. There will always be bigger companies with lots of resources who want a piece of the pie as the profit from digital game sales gets bigger and bigger. But I guess it is important to note that even just as a dominant player they will still have a huge ability to influence game sales just like the big brick and mortar stores did in the day.