Archive for July, 2011


Steam vs. Origin – The Battle of the DLC Plains

So, you might have heard of this Origin thing. And I’m going to assume that we’re all nice and familiar with Steam. There’s an interesting sight to see right now if you keep an eye on both of these (or at least webservices of journalistic repute, like RockPaperShotgun and Kotaku): The opening shots of a brewing battle between EA’s and Valve’s digital marketplaces and delivery platforms.

In short, Valve have, for some reason or another, removed certain games which mostly belong to EA from the Steam service. While there has been no official statement from Valve, EA certainly aren’t keeping quiet. According to EA’s forums (via RPS): “[...] When a download service forbids publishers from contacting players with patches, new levels, items and other services [...] it disrupts our ability to provide the ongoing support players expect from us. At present, this is the case with only one download service. While EA offers its entire portfolio to this site, they have elected to not post many of our games. [...]

Now, due to Valve’s silence on the matter, it’s really impossible to say what the deal is. EA’s used some careful wording to avoid explicitly commenting on the situation, As such, it seems (though it’s impossible to say; the following is all strictly conjecture) like Valve’s got a pretty particularly strong feeling about DLC: They want in. They should have a cut of all sales of all content in all games hosted on Steam, and any game which allows for under-the-digital-download-service sales is out.

Now, while all of the above is interesting, and holds some long-term consequences for the shape of gaming’s distribution future, it’s also old news. Indeed, it’s preamble for something I’ve been thinking about today, and feel like sharing.

I think what Valve are doing, the policy they’re implementing via Steam regarding DLC, is a bad move for revenue, for PR, and for gamers.

Especially against EA, I think it’s not a smart move to fight Origin like this. I mean, Steam won’t fail, and while I do believe it’s going to cost both parties, I think Valve will suffer a bigger loss of revenue than EA. And there are two reasons I think this:

The first reason is that EA’s lineup for the next 12 months is very strong. Three massive, headline games are coming, all from EA, and Valve has just said “I don’t want any part of it.” They are The Old Republic (though EA is keeping that one on Origin only anyway), Mass Effect 3 when that launches next year, and Battlefield 3, which is probably going to be the second biggest shooter this year. These three are definitely going to be huge sellers on PC, especially via digital distribution.

The second reason is that Origin is currently not very popular. At the moment, while some people seem interested in the notion of a serious competitor to Steam (which is sad for Impulse; it’s not even a competitor these days!), noone is really keen on the baggage that comes with. It’s a pain to keep multiple sets of login and account credentials, running multiple clients eats system resources, duplicate sets of credit card info pose a heightened security risk, and so on. However, by locking these titles out of Steam, Valve will probably be driving a significant number of people to try out Origin for those big, exclusive names. The only other outcome is a lot of people not playing said games on PC, but we all saw how well the Modern Warfare 2 Boycott went. EA will probably not get the same volume of sales via their own, nascent platform for Battlefield 3 and Mass Effect 3 as they would have were they on Steam, but crucially, they stand a good shot at introducing Origin to many people in a more palatable way than by adding it to games which are purchased through Steam as well.

So, by keeping their old policy on post-release content, Valve are more likely to keep their market share (and dominance) of the digital distribution marketplace. But if they take a hard stance on DLC, on the other hand, lose out. They get -zero- of the Battlefield/Mass Effect sales, both of which are not cheap games, and both of which are widely expected to rake in a huge amount of money. I understand that Valve is doing exceptionally well with Steam, and taking said hard stance on DLC will prevent cheap/free games with large amounts of DLC revenue slipping through their fingers. But in the meantime, they’re giving their enemies a free shot at some of the biggest franchise releases of the next twelve months. Realistically, the low-fee, high-DLC games aren’t something I expect to take off anytime soon (F2P, on the other hand..); so I don’t think Valve’s alarmist DLC-defensive stance is appropriate.

Now, despite all I’ve just said, I’d like to reiterate that it’s a hypothetical discussion. We cannot know, at present, the exact policy that’s dictating which games stay and which games go. And with that in mind, the one contradiction which makes it seem like Valve’s policy change and/or removal of items from the network is a misinterpretation is this: Steam’s growing library of Free to Play games. Now, my experience with most of these is limited, but as far as I understand it, using Steam’s Wallet to pay for content in these games, which is not available through Steam’s own store, is optional. Except perhaps for Team Fortress, all of these games appear to let their players pay for content through the Steam Wallet, or through their own respective services. Of course, paying through the Steam Wallet is probably much easier than paying through the website of the provider of the game, and there’s a good chance that Valve get a cut of all transactions facilitated by their Wallet. So there are obviously going to be benefits to Valve (ie: money) and to F2P game providers (ie: Steam’s vast clientele). So it’s not as opposed to Steam’s hypothesised “I want in” policy as it might seem.

I would have thought there’s a very easy compromise between EA and Valve on the DLC issue: Let EA’s store or service sell the content ingame, but also allow for Steam Wallet to facilitate any transactions between users and providers (in this case EA). It could even be done at the same rate as on Steam store DLC sales. Then not only do Valve keep their cut, but EA still get to control the customer-facing experience. But no, everyone’s aiming for the BIG money. So as it stands, EA makes less money, Valve makes less money, noone looks good, and most importantly, customers aren’t happy.