Amazon redux: UK retailers ‘steamed’ at Valve’s video game network
November 11, 2010 | 1:56 pm
As the biggest digital outlet for a medium that used to be sold solely physically, Valve’s Steam game distribution, multiplayer-matchmaking, and instant-messaging portal is often useful for drawing parallels to other e-media distribution schemes, such as e-books. But sometimes the differences stand out more.
Many games that are integrated with Steam, such as Call of Duty, Fallout, Left 4 Dead, and so on, are still sold in physical disc-in-box form in brick-and-mortar stores. Today MCV reports that two unnamed major British retail outlets are threatening to stop carrying Steam-enabled games unless the publishers remove Steam functionality from them. The retailers are planning their own digital distribution services and fear that Steam, which already has 80% of the PC download market, has an unfair competitive advantage.
“If we have a digital service, then I don’t want to start selling a rival in-store,” said the digital boss at one of the biggest UK games retailers.
“Publishers are creating a monster – we are telling suppliers to stop using Steam in their games.”
It’s hard to imagine book and e-book vendors acting the same way. Can you picture Barnes & Noble or Borders deciding to stop carrying any books that were also sold as e-books for Amazon’s Kindle?
But then again, the e-book market has experienced competitive pressures focusing on its front-runner, in the form of agency pricing; it’s just that it came from the publishers rather than the retail stores. So maybe the two media are not so dissimilar after all.
One of the other distributors quoted in the article says that “the power resides with bricks and mortar retailers, they can refuse to stock these titles. Publishers are hesitant, but retail must put pressure on them.”
But I’m really starting to wonder, in this era of broadband, whether that is really quite so true anymore. Just as authors like Joe Konrath are finding they can sell plenty of electronic books independently through name-recognition and promotional effort alone, major game publishers and studios might not be hit as badly as retailers might hope should the retailers stop stocking their titles.
Unlike e-books, which still account for a tiny fraction of overall book sales, nearly half of all computer games sold in 2009 were downloaded through digital distribution networks. If the game can be bought just as easily on-line, why bother to go to the store for it? And if your store stops carrying the games you want to buy, why shop there?
Steam really is becoming the Amazon of e-games. Just as Amazon built its reputation on making purchases easy for customers, Valve has bent over backward to offer great values and excellent customer service, converting former pirates into paying customers, even giving away three quarters of a million dollars in games to make up for a banhammer mistake. And even its competitors recognize this. From another MCV article:
“Publishers don’t give a shit, they don’t care what happens to the customer. Which is the crucial point, because Steam do,” commented the director at a fledgling Steam rival.
“I’ve fought hard for my customer, and never before have I had to give my customers away. Steam is killing the PC market and it is no wonder digital retailers are failing.
“Steam is locking down the market.”
This all sounds awfully familiar.
(Found via Slashdot.)