A litany of new digital gaming stores have sprung up over the last few years, in commensurate response to the growth of the video games market. That market, according to research firm Newzoo, is expected to hit $180.1 billion in revenue for 2021, adding roughly $15 billion per year from now until then. The group also claims that the market is 91% digital, meaning there’s a huge electronic money pie for these stores to chase, though the fastest growing and largest portion is for “mobile” gaming.
For the PC market, consumer reactions have been generally critical of the publishers that opt to create their own alternative stores instead of Valve’s immensely popular Steam. Many are annoyed about the need to have multiple applications installed to access their games, not to mention stores that lack some of the features that Steam offers. Others complain about exclusivity and incompatible multiplayer between versions. Others just simply hate change.
Regardless, this subject has been a hot topic over the past few years, and the controversy appears to only be growing. As we approach the completion of the first one-fifth of the 21st century (I know, where did the time go?), here are the major (and minor) players in the online games store market and where things stand today.
Really, there is no introduction needed for Steam. Launching way back in the olden days of 2003, Steam is now processing billions of dollars USD in sales per year. Steam also includes the Steamworks API, which is a collection of functions developers can integrate into their games such as matchmaking, achievements, cloud saves, user created content, and more. It has easily the largest feature list of any of the digital stores, with unique options like big picture mode, curation, user reviews, wishlists, custom gamepad mapping integration, and much more. Mobile apps for the store have made their way to millions of Android and iOS devices, as well. Steam also was among the first to allow sales of pre-release software with its love-it-or-hate-it “Greenlight” program (which is now defunct).
Though well ahead of its time and by all measures wildly successful, in recent years Steam has endured quite a bit of criticism. Issues include high costs to publishers, a languishing UI (it took way too long for high-DPI support), censorship drama (not enough or too much, depending on who you ask), the failed SteamOS platform, and a perceived general corporate arrogance.
Regardless, Valve’s baby has remained far and away the top digital storefront, and there has been little movement among users to abandon it even when competition has popped up. With over 150 million accounts, Steam is a gaming behemoth.
Back in the Half Life 2 days, when Steam was new and forward-thinking, both server and internet costs were vastly higher, and as such it might have made more sense for a digital store to employ a significant cut of revenue. These days, those costs are drastically reduced, while Valve’s cut has remained roughly the same, and now developers are largely paying only for the ability to be available on the platform for access to those users.
For PC gaming to thrive, one could argue that we need more of the funds to go to the people actually making the games, not to the people hosting these games on their servers. Valve is barely even a game studio these days, and the costs to distribute these titles have fallen exponentially over the years. Many people view Valve as abusing its dominant position to extract monopoly profits, while others believe the company is a benevolent overseer. Either way, prices seem to be well above the marginal costs of running Steam, which means the market is ripe for competition.
In December of last year, Valve announced changes to the revenue split. Historically, Steam has taken 30% of sales, but now that percentage will vary depending on how much revenue a given product has generated. It now starts at the same 30% for the first $10 million in sales, then drops to 25% between $10 and $50 million, and then it drops further to 20% once a game reaches above $50 million. Clearly an attempt to stop publishers from making their own stores, the new model appears to be currently failing, as game exclusivity on other platforms seems to have only increased since Valve enacted this new policy.
As for future plans, Valve keeps its secrets close to the vest—an advantage of being a privately held company. It’s announced better curation and improved purchase suggestions, Steam China, new mobile chat, an updated library, and improved cheat detection. VR development is almost certainly continuing, but any other amazing future technology or serious enhancements to gaming as a whole are not publicly known to be under development at Valve at this time, although there almost certainly is some kind of work being done.
Microsoft received a fair bit of consumer outrage for its backtracked push to make the Xbox One platform digital first and foremost, but market trends suggested that for most people, it would’ve been fine. The company eventually succumbed to market pressure, largely dropped their digital focus, and settled into second place for this console generation. Microsoft did, however, come out with a pseudo “universal” games and media store.
The Store originally launched with Windows 8, and Microsoft has for years been trying to grow it into something people would actually want to use. By most accounts, the company has failed. Meant to be a place for people to access applications and media that could run on any Windows device through the use of a new container, Microsoft was hoping to build a giant cross-device store. Application support included Xbox, Hololens, mobile, PCs, IoT devices, and more. Microsoft instead ended up with a dead phone platform, a hated Windows 8, and complaints (many of which were based on factually inaccurate claims) about the direction Microsoft was taking Windows, broadly speaking.
At first it was set up to use the same somewhat ridiculous 30/70 revenue split that Apple, Valve, and Google use, but without the users and market power, the Microsoft Store spent years without many seriously investing in it. In 2018, Microsoft announced (and just confirmed) a general 5/95 sharing agreement for most apps, but games will retain the 30/70 split. This makes it one heck of a tough sell. No users and high costs is the Microsoft Store position.
The story of the Microsoft Store today is one of a generally good idea languishing without the resources it ought to have to solve the problems it faces. Search and app discovery have long been a mess (literally for years), and little has been done to rectify it. It’s possible that Microsoft doesn’t even know how to fix it. Subtle UI refinements have made the store look slightly better, but it’s still impossible to separate the actually decent games from the masses of terrible Bejeweled and Candy Crush clones. One look at the “Best selling games” shows you the trouble the store is in and has been in for years.
The store does have a few standout features, such as the Microsoft Game Pass, a subscription that gives you access to well over 100 games (and growing) on PC or Xbox One (depending on the game), from the original Xbox library right up to current releases. There’s also the Play Anywhere program, which allows you to buy a game once and then play it on either Xbox or PC, with synced cloud saves. Microsoft’s Phil Spencer is on the record saying Microsoft will be launching Game Pass “on every device.” Rumours abound that it will be on Nintendo Switch as well, and maybe even the Playstation, although it seems unlikely that Sony would allow such a thing.
Microsoft engineers are also working on a cloud streaming service known as “Project xCloud” that should power gaming experiences on even low-end devices. Apparently any Xbox One game can be deployed on Project xCloud with “no additional work.” Microsoft is also rumored to be announcing two new Xbox models at E3 this year, one of which is specifically designed for game streaming.
Microsoft is currently making quite a large investment in this regard, and if it pans out, many people could really buy into a Netflix-like gaming solution on any device. There could be enough interest, at least, that it could potentially threaten Steam and the markets that have grown around this concept of local gaming. Many people thought cable TV and physical media were here to stay, and yet both of those industries are crashing as more and more people flock to Hulu, Netflix, and other streaming solutions. Accomplishing the same thing for gaming would be quite a coup.
Whether people eventually buy into this service remains to be seen, but more platform-agnostic gaming and fewer technical concerns would be improvements. Microsoft has and is making significant changes to the way it operates its gaming initiative, and much of what it’s doing looks potentially quite beneficial to consumers.
GOG, Origin, and Bethesda
Now owned by CDProjekt, the company behind the fantastic Witcher series, GOG has been doing its own thing for a while. No games sold through the GOG store have DRM and can be easily copied, moved, messed with, and played without any interaction with a storefront. With GOG, you can purchase and download the game in your browser without ever needing to install client software to manage it for you. There is client software available (GOG Galaxy), but you don’t need it to access the stuff you’ve bought.
GOG supports a variety of features, including achievements, leaderboards, forums, cloud saves, update roll back branches, game reviews, wishlists, refunds, and more.
GOG has been growing over the last few years, but because of the lack of DRM, many publishers aren’t willing to sell through that store at this point. Hopefully that’ll change, because at the moment the platform’s available library is largely “classic” (ahem, “old”) games that nobody is generally going to bother stealing anyway, although there are a few excellent gaming exceptions.
DRM aside, GOG lacks any amazing standout features, but here’s hoping GOG continues to grow, because its vision of a more consumer friendly experience is one that deserves continued support.
EA’s own storefront, the Origin experiment, started with a collective “this is a dumb idea” from consumers and has grown into a “why does Origin still exist?” as of now. It’s not that Origin is particularly terrible, it’s just that it doesn’t do anything better than anyone else. EA restricts much of its library exclusively to the Origin store.
Origin now features friend lists, chat, purchases, refunds, and so on, but nothing that makes it stand out. For a while, EA gave out a collection of mostly ancient games, but that practice has ceased, because the games were so underwhelming that nobody really cared. The company is essentially betting on its massive sports and Battlefield series to force people into its ecosystem, with some success. Essentially it appears as just a copy of Steam, and EA has added little that actually improves gaming, with one exception: its EA Access and Origin Access programs.
EA/Origin Access is a subscription that allows you to play a number of EA games for one monthly price, similar to how Microsoft’s Game Pass works. EAA works on Xbox One, while OA works on PC. Unlike Microsoft’s Game Pass program, you do need to purchase two passes to play on each platform. Divided into two tiers, “Basic” ($5 per month) and “Premier” ($20 per month), you’re able to play almost 200 games as much as you want. Currently, there are 182 titles in the Basic tier, while Premier offers 189 games. Anthem, Battlefield V, and FIFA19 are the major draws to the upgrade. Though this model is not for everyone, many people may appreciate a lower upfront cost, particularly in emerging markets. Over the last few years, EA’s Access programs have grown into a truly excellent value.
Bethesda, like EA, figures it’s got the clout to force users into its own store front. Starting with Fallout 76, it appears Bethesda games will be exclusive to Bethesda.net. Bethesda has created its own “Bethesda Launcher.”
Bethesda’s games are incredibly popular, and it’s likely they’ll continue to sell incredibly well. At this point, the launcher has been heavily criticized for lacking features, heavy resource usage, and intermittent reliability. These are likely growing pains, as the launcher is quite new, but it’s no less annoying to consumers. It’s not hard to see why Bethesda, or anyone else, would want to avoid giving Valve 20-30% of its revenue when Bethesda will almost certainly sell many millions of copies with or without storefront exclusivity. Few companies’ games are generally as loved as Bethesda’s, and it’s likely people will grit their teeth over the launcher while loading up Elder Scrolls VI in 2023 (or 2024, or 2025, or whenever it actually launches).
Uplay, Epic, and all the rest
Uplay launched to negative responses on a par with Origin, although it’s generally been either a superior or roughly equivalent product. In an industry first, in-game achievements actually do something, and you can trade them for access to in-game bonuses. Ubisoft has also kept its products listed on other platforms, such as Steam, rather than pulling them as EA has done. It has friends and chat, like the others, but it’s mostly just guilty of being another store application people would rather not install.
The consensus I’ve heard is that Ubisoft has been doing a much better job of addressing Uplay’s issues when compared to EA and Origin. Ubisoft has also received credit for quicker and smoother game patches when needed. Uplay does work alongside Steam, and and it must be installed and launched when games are launched through Steam, but generally it’s not doing anything that should significantly annoy anyone much anymore. (Surely, some of you will disagree.)
Epic’s Games Store
Perhaps the most controversial store of all, Epic’s recently announced and rolled-out store has made waves in the industry. Criticizing Valve for its revenue sharing agreement, Epic drastically undercuts it with a 12/88 split. If you’re using the Unreal Engine, Epic will cover the 5% engine royalty fee out of its 12% cut, making the Unreal engine essentially free.
Epic is pushing the angle that it benefits developers and consumers if game creators get more money, and it looks like it’s had some successes, with developers at least. The drama around Metro Exodus becoming an Epic exclusive was a hot story for a few days, but it’s not the only one. Saber Interactive recently penned a letter announcing that it’s moving from Steam to the Epic store for WWZ and will simultaneously reduce the price of the game from $39.99 to $34.99. (The price drop is clutch; if we’re going to have storefront exclusives, they better save me money.)
Heavily criticized as being featureless and unreliable, the Epic Games Store has an uphill battle ahead. Gamers are heavily opinionated, and many are zealots in their views (Epic founder Tim Sweeney included). The rage has been swift and vocal regarding things like the lack of refund policies and user reviews. Whether Epic will able to come up with workable solutions quickly enough to allay that rage remains to be seen.
The Epic Games store should be available on Windows and macOS now, and it’s coming to Android later in 2019. Epic showed that people would be willing to leave the Google Play market to access Fortnite, and it’s looking to leverage that success into the Android Epic Games store.
In the end, the new Epic Games store is controversial and disruptive. Whether it’s beneficial to the industry in the long run or not is yet to be determined. It’s possible that Valve would not have reduced its revenue cut had Epic not delivered an undercut, so in that regard perhaps there’s been some short-term gain already.
Not to be outdone on the discount store position, Discord announced its own store, with a 10% fee and a commitment to work to reduce that cost even further. Not many other details exist at this point, except that it will allow any developer to self-publish on the Discord store. Regarding its eventual success of failure, nobody knows yet of course, but with 200 million users, Discord is one of only a few companies in the mix with more users than Steam.
There has grown an entire industry of resellers who provide Steam keys in various methods. There’s Humble Bundle, which offers charitable donations, a pay-what-you-want model, and now a monthly subscription method, as well as more traditional retailers like Fanatical or Green Man Gaming. Each has a niche they target, but pricing aside, they’re all just basically selling Steam keys.
There are also companies operating in the so-called gray market, such as G2A or Kinguin. These stores sell games keys listed and sold by third parties. How those keys are obtained is apparently a cause for some concern, as there are reports that they may be harvested with potentially illegal methods. Use them with caution and at your own discretion.
Mac app store
Apple has its own Mac app store, which includes games, but why anyone would use it is unclear. Steam and Epic Games are available on macOS, so you can just use those. Seriously. With many of the same issues as the Microsoft store but with fewer quality titles, you can probably avoid it altogether.
Lots of changes ahead
The list above is long, but it will almost certainly get longer. The gaming industry is absolutely massive, and it’s likely to just continue to grow. While many people are annoyed by having multiple storefronts, there are differences between these stores, and hopefully the competition encourages more development.
We can argue about which store features we each require in order to switch, or whether switching is insane and you’ll never install another stupid store again, or any of the unending list of things nerds argue about, but one thing is clear: The market long held by only a few players is suddenly under increased competition and pressure. From technological advancements to contract and revenue discussions, the digital storefront wars are heating up and should be worth watching.