Caption: One of the Steam Machines alongside a Steam Controller. Source: Valve A technology company in Washington state has 75 million users. It earns more profits-per-employee than Apple or Google, and its fans adore it. That company is Valve Corporation, the developer that first created the popular PC shooter Half-Life back in the ’90s and now runs online software store Steam. Valve is a behemoth in the game industry, but it isn’t satisfied with its past and current achievements. No, Valve is currently working on changing the nature of the PC forever by taking on Windows, turning its community into content creators, and helping to bring virtual reality to consumers. Right now, Valve’s biggest project is working with hardware manufacturers like Dell and Alienware to produce set-top boxes that run its new Linux-based operating system called SteamOS. The company calls these boxes Steam Machines. Both the hardware units and the new OS take their names from (and fully integrate) the Steam digital-distribution network. Valve’s plan for the Steam Machines is to combine the openness of PCs with the convenience and accessibility of consoles on living-room television sets. It’s a bold strategy — one that would sound kinda crazy coming from any other company. The truth is, gamers would laugh off a plan like the Steam Machines from anyone else for a number of reasons: Linux is not Windows. PC gamers don’t care about playing in the living room. The open nature of PCs is the antithesis of the curated platforms that big companies like Nintendo, Sony, and Microsoft have offered for years on the television. These are all major hurdles — obstacles of perception and technology. So why aren’t gamers laughing at Valve? To understand why this big idea seems reasonable coming from the Bellevue-based corporation, you need to understand Steam. We need to look at what Steam is now and how it got to the point of totally dominating PC gaming. The enormity of Steam Let’s get the basics out of the way. At its core, Steam is the iTunes of gaming. A game for sale on Steam. It is a portal through which developers and publishers can sell software to gamers. It’s all digital, which means that unlike Amazon, customers have no option to order a physical disc in retail packaging. Valve takes a cut of what’s sold. Publishers and developers take the rest. Once a customer buys a game, they can then use Steam to launch it and connect with others. The service offers games from major companies like Assassin’s Creed publisher Ubisoft and Call of Duty publisher Activision, but Steam is also one of the best platforms for independent studios looking to sell their products. Small developers can make a lot of money on Steam, which is primarily due to the size of Steam’s customer base. Steam has 75 million active user accounts, according to Valve. That’s a massive number of people logging onto Steam to play and potentially purchase games. On an average day, the service hosts around 650,000 peak concurrent users. The thing about these numbers is that they are even more impressive when you consider the nature of a Steam customer. This isn’t the same kind of “daily active users” that frequent free-to-play games like Clash of Clans or Candy Crush Saga on mobile. Unlike mobile publishers, Valve isn’t out spending money trying to acquire new gamers, and Steam customers are core gamers looking to spend money upfront for premium-priced software. That includes $60 triple-A new releases, $15 indies, and older titles on sale at a deep discount. Oh, yeah — Steam sales If Steam is an iTunes for gaming, Valve sets the service apart with its blockbuster quarterly sales. Four times a year — in winter, spring, summer, and fall — Valve and its publishing partners mark down huge swaths of the back catalog available on the store. Games that sold for $60 just a few months before will go for $30 or potentially much less. Many frugal gaming fans purposefully hold off on new purchases to pick up a bigger number of titles during these discount periods. This is in addition to smaller, more focused weekly sales. At this point, Steam isn’t the only service holding these kinds of sales. Amazon, GOG, and others all features massive discounts quarterly or biannually. Valve’s sales are the ones that usually grab headlines and the attention of the wider gaming community. Thanks to these bargains, even people with only a passing interest in gaming often have a pretty substantial library of titles on their Steam account. Gamers love and trust Steam Like any enthusiastic group of fans, the people who play a lot of games are very passionate, extraordinarily loud, and some times vicious. For example, publisher Electronic Arts makes a number of games that people enjoy. That includes titles like Madden Football and Battlefield, but that hasn’t stopped gamers from voting the gamemaker as the “worst company in America” in the last two annual polls on the customer-rights blog The Consumerist. That’s right. Gamers think EA is worse than Comcast, Time Warner, and Exxon. EA has done a lot to earn the scorn of fans (it released busted games and Origin, a lackluster Steam competitor), but gamers also know how to hold a grudge. That’s why it is amazing that more than a decade after launching, customers almost universally love using Steam. The company has navigated fickle customer demands expertly. Valve Valve’s Steam service working on a TV. Instead, Valve has earned that admiration the admiration of its customers in a number of ways. Steam is easy to use. It’s a convenient way to store all of your games and to access them when you need them in one place. The aforementioned sales have gained the system a reputation for fairness. Valve also treats developers and publishers well, which end users notice. More than the above, the executives that run Valve make decisions as if they are real gamers. They are in charge of a company that earns an extraordinary amount of money. It got that way by appealing directly to people who live and breathe interactive entertainment, and it seems intent on sticking to that strategy. Gamers respond to that. They see Valve as an ally or as a team they can root for in the battle against evil corporations hellbent on squeezing every dime out of consumers. In the end, Steam benefits because gamers feel at home using it. For connection and community Steam is more than just a store. Users have accounts where they keep all their games in a digital locker, but they can also use those accounts to make a friends list to game with others. They can also join groups based on similar interests. People can quickly chat with their friends using the built-in instant messaging, and they can post on Steam’s message boards about specific releases or general topics. Unlike Xbox Live Arcade and PlayStation Network, which are similar services for Xbox One and PlayStation 4, respectively, Steam does not require a monthly subscription fee. Valve is also consistently adding more features. It has achievements that players can unlock by performing difficult feats in games. It recently added trading cards that users can collect by purchasing and playing games. Gamers can even trade their unplayed games and virtual items with one another. These are all ways Valve manages to engage customers and keep them coming back. Continue Reading ...
Posted on: Mon, 24 Feb 2014 16:25:49 +0000
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