Analysts weigh in on Steam dominance, Origin growth

Steam is easily the biggest PC games portal on the web. However, can it maintain its success, especially with the growing number of competitors?

22

Steam is easily the biggest PC games portal on the web. With 35 million active users and over 1400 games to download, Valve's early foray into digital distribution has earned it a loyal, passionate following. However, can it maintain its success, especially with the growing number of competitors?

A few analysts were queried about Steam's future, and while no one refutes Steam's continued dominance in the space, a few believe cracks may be showing.

Industry Gamers polled various analysts before Valve admitted that Steam had been compromised. It's unclear if consumer faith in Steam has dropped. However, this summer's PlayStation Network intrusion should indicate one thing: gamers are a rather forgiving bunch.

Billy Pidgeon of M2 Research doesn't see any real competition to Valve's stronghold, noting that "to truly compete with Steam, a digital retail service must have market scale and provide significantly more real and perceived value to customers. I don't see any open online marketplaces doing this yet." On-demand gaming services, such as ones provided by Gaikai and OnLive, may prove an interesting alternative to Steam.

Wedbush analyst Michael Pachter agreed, bluntly stating that "I don't think that most people care about Origin. And I don't think many people will switch from Steam to Origin unless a) Origin is cheaper or b) Steam screws up."

Now that Steam has "screwed up," who presents the most serious competition to Valve? DFC Intelligence's David Cole believes that Origin is just "one of many," and points to GameStop, with their acquisition of Impulse as a potential competitor. One of the strengths that EA has with Origin is that it is "following the Valve model" by selling directly to a large installed base of loyal customers. Just like Half-Life fans were forced into Steam, many of EA's properties are now forcing Origin.

Scott Steinberg of TeechSavvy Digital doesn't see it as a strictly Steam versus Origin story, though. He believes that "Origin should help extend interest in downloadable direct to consumer sales," and will help expand the market. Ultimately, that's a good thing for Valve, EA, and consumers.

Andrew Yoon was previously a games journalist creating content at Shacknews.

Filed Under
From The Chatty
  • reply
    November 11, 2011 2:00 PM

    Andrew Yoon posted a new article, Analysts weigh in on Steam dominance, Origin growth.

    Steam is easily the biggest PC games portal on the web. However, can it maintain its success, especially with the growing number of competitors?

    • reply
      November 11, 2011 2:11 PM

      getting people to switch from steam will be impossible, right now i have 190+ games on steam, and a huge friend list, for me to switch to origin id somewhat have to throw them all away just to play a game.for the sake of 2-3 euro.

      they only way origin will get a bigger base of people is from people that dont have many or no games on steam.

    • reply
      November 11, 2011 2:22 PM

      Despite the security breach, i have the utmost confidence in valve and have zero intentions of abandoning it. I don't know ANYONE who is ready to jump shit because of this.

      • reply
        November 11, 2011 2:29 PM

        jump ship*

      • reply
        November 11, 2011 3:06 PM

        if it was Valve molesting children at penn state people would forgive and forget

        • reply
          November 11, 2011 3:20 PM

          that's a little bit over the top, i'm gonna be raging at them till they add a "don't store my cc details" option

          • reply
            November 11, 2011 3:40 PM

            Just open up Steam, click your account name in the top right, and then clicked 'delete' to remove your credit card details.

          • reply
            November 11, 2011 4:29 PM

            You have to tick the box to make it remember your details in the first place! The default is to forget.

          • reply
            November 11, 2011 11:01 PM

            You have to tick a box to make it store your info. The more posts I see like this the more I think they've never purchased anything from Steam or are completely stupid. I'm going with both.

        • reply
          November 14, 2011 2:05 AM

          What an idiotic analogy.

    • reply
      November 11, 2011 3:32 PM

      Just my HSO, but I don't think Steam "screwed up" as this article tried to make it out.

      Also, the big difference between Sony and Steam is that Sony tried to hide the breach, or at least didn't even know or acknowledge it for a while. Steam has been about supporting its community. And that's the biggest difference between Steam and any competitor. EA, with Origin, certainly won't care about it's community. We have decades of history to show us that.

      No, the analysts have it somewhat wrong. Any competitor will have to not just be cheaper but go beyond what Steam does for its community. That also begs the question would a worth competitor have to develop a Steamworks killer as well. Tall order.

      • reply
        November 11, 2011 7:15 PM

        Amen brother! I love how people are trying to make Steam look like the bad guy.

    • reply
      November 11, 2011 3:39 PM

      Steam hasn't "screwed up" yet.

      Everyone gets hacked. EVERYONE. It's all about what these companies do to prepare for that inevitable scenario. SteamGuard, encrypted usernames, passwords, credit card information (which was only stored with the users CONSENT). Security can always be better, but at least they aren't making too many (if any) ridiculous mistakes like Sony did recently.

    • reply
      November 11, 2011 3:40 PM

      Unlike Sony steam followed the law and seems to have encrypted the infomation in their databases... Steam just has far better community aspects about it as well. People aren't going to leave 150 games and 100+ friends.

    • reply
      November 11, 2011 3:43 PM

      Shouldn't this article note that its parent company has a competitor to steam

      • reply
        November 11, 2011 11:56 PM

        ^^ This

      • reply
        November 12, 2011 3:52 PM

        Gamefly isn't a direct competitor. Yet. They don't have a full fledged PC game sales offering. It's in beta.

    • reply
      November 11, 2011 3:48 PM

      oh great, next thing you know we will be running 10 different DRM apps just to get access to the games we want to play

      • reply
        November 11, 2011 4:33 PM

        I think its more likely we'll see two or three big players (Most likely Steam and Origin in the near future) and a few smaller ones on the side. I'm hoping for as few "Exclusives" as possible but I doubt it'll work out that way.

        All in all I'm not too bothered. I'll probably stick to what I'm doing now. Steam is my main launcher and where my friends list is. I launch Origin games through Steam so I still get the overlay and only open up Origin when I intend to play one of its games. I generaly have Steam open 24/7.

    • reply
      November 11, 2011 4:34 PM

      "Ultimately, that's a good thing for Valve, EA, and consumers."

      I'm not sure that last bit is true. EA and other publishers are more than happy to set their prices much higher than retail on DD services. Only valves own games seem to sell at a reasonable price on steam, and even then they tend to be slightly undercut by retail.

      EA and THQ charge £10 more than retail for their games via DD. When you can buy the game retail and just plug the cd-key in to have the convenience of the digital purchase that isnt really a compelling thing.

    • reply
      November 11, 2011 5:59 PM

      http://www.shacknews.com/article/71038/the-witcher-2-digital-sales-breakdown-81-on-steam

      Is any competitor even remotely in a position to take a run at Steam?

    • reply
      November 11, 2011 6:27 PM

      DNRTFA- I don't care if my game is on Steam/Origin or other so long as the UI is reasonable. Very few complaints for Origin from me although I have major complaints for battlelog. Personally I don't get why people are so devoted to Steam. It's just a store to me.
      What I don't want to see is a client for EA games, Activision games, Ubisoft games, etc.

      • reply
        November 11, 2011 8:39 PM

        Origin is not just a store it's also another app.

        Steam fixed a complexity problem of being a PC gamer. And now we're slowly adding complexity back with exclusive games spread across services. Screw that shit man. Flat out, if your games isn't on Steam I ain't buying it.

        • reply
          November 11, 2011 9:13 PM

          This is probably one of the worst growing problems for PC gaming: the factions created by online authentication network requirements. We already have Steam, Games for Windows Live, Origin, Uplay, and so on.

          1. Each of these costs a developer money to implement, so implementing multiple ones would be more expensive... but could this be incentivized by the service providers offering a discount?

          2. Having one game's activation DRM / online authentication requirements is a pain in the ass (example: Games for Windows Live titles on Steam require logging into BOTH)...but see #1

          3. Having a game split among multiple online authentication networks "fragments the community"... but A. the community is already fragmented among consoles, and B. it's possible to have cross-network multiplayer with a centralized authentication server (one that verify that Steam user A and Origin user B are legit, and tie them into the server accordingly). This would take extra development work, probably too unappealing to pursue, in comparison to just going with one service.

          Until this gets sorted out, we're going to continue having the "Game X is using service Y?! WTF!!" threads (I'm personally fearing that Bioshock Infinite will get stuck on GFWL or be saddled with SolidShield activation DRM). I don't think developers enjoy pissing off a good section of their PC gamer fans three weeks before release (or at least I hope they don't).

          • reply
            November 12, 2011 12:00 AM

            "I don't think developers enjoy pissing off a good section of their PC gamer fans three weeks before release (or at least I hope they don't)"

            I think Ubisoft does enjoy it.

            • reply
              November 12, 2011 3:07 AM

              That or Ubi's blissfully ignorant of it :c.

        • reply
          November 11, 2011 11:05 PM

          I don't understand. What complexity did steam fix?

          • reply
            November 12, 2011 12:02 AM

            Managing friends lists, joining games together, having to alt+tab, finding DVDs, driving to the store...

            • reply
              November 12, 2011 12:04 AM

              Auto-patching and backing up your special settings and favorite servers to Steam Cloud :)

              • reply
                November 12, 2011 12:29 AM

                So much good stuff that I can't even remember it all.

              • reply
                November 12, 2011 3:07 AM

                Free name changes as well!

              • reply
                November 12, 2011 9:28 AM

                Interesting you consider most of that "complex". Also interesting you think Steam fixed it. I'll give you auto patching though. I didn't find it that difficult to manually download patches and install them, but it definitely is easier.

                • reply
                  November 12, 2011 12:00 PM

                  You are being especially obtuse.

          • reply
            November 12, 2011 2:16 AM

            You obviously don't remember CS patch days.

        • reply
          November 12, 2011 2:07 AM

          [deleted]

        • reply
          November 12, 2011 4:18 AM

          I'll only buy GoG stuff because of no client. I agree it's a pain in teh ass having Origin running too, and it's hilarious how much they've ripped off Steam.

    • reply
      November 11, 2011 10:34 PM

      As long as EA keeps acting like... EA, Origin will never be a competitor to Steam.

    • reply
      November 11, 2011 11:18 PM

      "now that steam screwed up" .. wtf?. no they didnt. steam forums? thats not even steam... and so few effected?. ... biased much?

      • reply
        November 12, 2011 12:08 AM

        Steam itself was breached, Gabe admitted that, not just the forum.

    • reply
      November 12, 2011 12:05 AM

      Competition is good for consumers. I love Valve and Steam, but monopoly is always bad. Hopefully Origin will grow to be a real competitor to Steam in near future.

    • reply
      November 12, 2011 11:54 AM

      It's like a Steam apologists convention.

    • reply
      November 14, 2011 2:03 AM

      The only reason i have Origin installed is because i am forced to use it with Battlefield 3. Origin is nothing more than a glorified launcher. Hell, they couldn't implement their Batllelog service into it. If i had the choice, i wouldn't be using either.

    • reply
      November 14, 2011 7:07 AM

      Origin and Impulse can't even be compared to Steam. Steam offers a lot more than Origin and Impulse, specifically, achievements, quality in game chat (Origin has it but it sucks) and sales specials from multiple game developers.

      There is no comparison to be had.

Hello, Meet Lola