From its humble roots as a conduit for Counter-Strike back in 2003 to its current status as a digital delivery juggernaut with over 30 million subscribers, Steam's rise has been little short of remarkable. With an estimated 70 per cent share of the entire PC market, Valve's store has transformed a small developer into one of the games industry's most powerful players.
However, while serious challenges to its dominance have been few and far between in recent years, the playing field suddenly seems to be getting a little more crowded. EA's decision to launch its Origin store back in June presents the biggest threat to Steam's dominance yet, especially if it sets a precedent that other publishers will follow.
But has Steam built an unassailable lead? Is EA shooting itself in the foot? Or does the impending digital revolution spell the end for its good will-driven market monopoly? Eurogamer spoke to a number of key players in the PC download market, Valve and EA included, to find out.
First things first, the Steam faithful may well argue that there's no need for an alternative. Steam's brilliant, right? Accessible, developer-friendly, passionate about its content and offering good value for money, it's the fat cat it's okay to like. Certainly, you'll have trouble finding anyone willing to argue that it doesn't deserve its success, whether they be a developer, commentator or competitor.
"Steam's secret weapon is that the people at Valve just seem to understand games and their audience on a level far beyond that of most large companies, and this is evidenced in which games get promoted on the service and the overall feel of the experience," neatly surmises Supergiant Games' Grag Kasavin, whose delightful action RPG Bastion recently launched on the service.
"In spite of Steam's size, it feels more like buying games from a hobby shop than from a strip mall. I think this comes from Valve taking the long view of the business, and placing customer satisfaction as a high priority."
"The reason it has won is that it has delivered a service that everyone wants and that everyone likes," adds Nicholas Lovell, director of consultancy outfit GAMESbrief. "It just works. It makes life really easy."
But however good it is at what it does, healthy competition is vital. Not only because it drives innovation, keeps prices down and helps grow the PC market, but also because a Steam-only future might not be the level-headed utopia we'd all like to imagine.
"Any monopoly is dangerous," insists Lovell. "It's all well and good we think Steam are the good guys today, but Google used to be the good guys. They used to be the upstarts, and now we're all a bit afraid of them. The good guys, once they get into power, can become the not-so-good guys.
"Any time somebody can stifle what comes to market by their choices, it's an issue. If - and I'm not saying this is happening yet - Steam goes, 'I don't like your game', then it can just stop an indie from getting their game into a meaningful marketplace.
"At one level, they've got an infinite shelf space and they can stock as many things as they like, but at another level there's only a limited number of sales, there's only a limited number of front pages, there's only a limited number of business development people willing to sign the contract," he continues.
"They can just say 'we don't want to do that'. They start being able to censor what they distribute. When one person can effectively say yes or no over whether a product gets shipped, that's a dangerous place."
So, what are the chinks in Steam's armour? Where should the competition be focusing its efforts? The consensus seems to be that anyone wanting a shot at the title is in for a monumental struggle. Valve's store has a huge, contented customer base that will prove very hard to shift.
"Steam is dominant because they were early, executed well, and keep improving the service, with very high customer satisfaction," explains Wedbush Morgan analyst Michael Pachter.
"It will be difficult for anyone to topple them. The analogy is Bing to Google search. It doesn't really matter how good the competitor is if switching costs exist, as most people who are perfectly satisfied won't bother to check out the competition."
If anyone does have the stomach to properly take on Valve, they'll likely have to have very deep pockets. Indeed, when asked what he'd do if wanted to mount a serious challenge, Get Games boss Graeme Struthers cheerfully concedes, "If I really wanted to take on Steam I'd have to go and find a colossal amount of money and buy them."
Not only will a competitor need to court publishers by offering them a bigger cut of the back-end, but they'll also have to pass on some meaningful savings to customers. And with Steam hardly pillaging gamers' wallets as it is, that's a bar many will be unable, or unwilling, to crawl under.
Blizzard veteran and current Runic Games boss Max Schaefer doesn't provide much more in the way of comfort for any would-be usurpers. He tells Eurogamer that their best hopes probably lie in Valve slipping on a proverbial banana skin and doing something to alienate its userbase.
"I think Steam benefits from being an agnostic platform - they push other people's games as much as they do their own. Unless Steam screws something up. That's a way things could change - if they do something that horribly annoys its customers. People don't have a terribly large emotional attachment to where they're clicking to buy their stuff. Right now most things that they want are on Steam. It's sort of a self-fulfilling situation - since everyone is there, that's where everyone goes."
However, there is certainly one area where competitors might be able to find a little elbowroom. Steam's dark, slick aesthetic is largely geared towards the male, core-orientated user. That leaves a huge swathe of the world's gaming population up for grabs, says Theodore Bergquist, CEO of Steam rival Gamersgate.
"Steam has pretty much locked in the hardcore market," he admits. "On the other hand, if Steam has five million paying customers and there are 90 million PC players in the US, it's easy to see who you should go chasing for.
"The next generation of digital buyers are not hardcore gamers, they are more casual consumers in the sense that they don't care about all the overlay features in a platform, they don't want to download a client, and they don't see the point of being locked in. They want to keep it simple - download and play - and they care more about price and selection, rewards and support, things Gamersgate are focusing on."
The other key factor in Valve's success is content. Tying a must-have game exclusively to the platform worked wonders for the developer with Counter-Strike. Attempting to replicate that honey trap is another possible angle of attack. And sure enough, this is where EA's Origin initiative comes in. Of course, the jury is still out on whether forthcoming BioWare MMO Star Wars: The Old Republic is that killer app, but its absence from Steam is undoubtedly a blow for Valve.
Like it or not, EA's Origin store could prove but a taste of things to come, and it may well be single-publisher stores such as these that eat into Steam's bottom line rather than more conventional competition. As digital delivery increasingly becomes the industry standard for PC, it's natural for slow-on-the-uptake publishers to want to make up some ground and wrestle control of their games back from third parties. With a hefty percentage of a game's asking price being skimmed off by Valve, who can blame Riccitiello for wanting to strike out on his own?
"In the traditional physical retail distribution channel, a publisher has to give up 35 per cent of the top-line price in order for the retailer to get their margin for distribution, in addition to the overhead and production costs to manage a physically distributed item. Publishers have accepted that, mostly because they can't do it themselves," explains EEDAR analyst Jesse Divnich.
"In a digital environment, however, the barriers to create a distribution outlet are much smaller. Anyone could create their own digital storefront and pocket the distribution fee that is standard through outlets like Steam - or pass the savings on to consumers."
EA itself argues that not only does it have a right to get involved, but that the arrival of Origin on the download scene is actually a boon for the industry at large
"I am actually a big believer that competition is always good for the consumer," insists EA's European boss Uwe Intat.
"It's not as simple as competition drives prices down. It can but doesn't necessarily have to. But certainly, competition drives creativity because competitors have to come up with innovation. Usually to be successful you put the consumer into the centre of your thinking and of your innovation. So, to have different competitors out there it's usually better for the consumer.
"There are different strengths that people bring to the party. We understand our consumers in our games best. A traditional retailer, depending on what space it's in, if it's just games or it's games and music and movies, they have a broader consumer portfolio, so they understand people in many more categories a little less deep. We understand our people in our category very deep.
"So it should be a nice and innovation-stimulating competition out there, which at the end is good for the consumer."
Perhaps unsurprisingly, not everyone shares that view. Good Old Games, which happily ploughs its own niche as a provider of classic retro titles, reckons that you, the customer, will be the biggest loser if the market continues to break up.
"If in the long run all the big publishers are going to follow EA's strategy I think the market will become very complex and become a big puzzle for the consumer," explained CEO Guillaume Rambourg.
"The gamer is like any other consumer - like you or me going to the supermarket to buy food, for example. If in the future you had 50 shops - one to buy vegetables, one to buy fruit, one to buy pasta, one to buy coffee, we would all go crazy. We have to keep the market and the offers simple for consumers.
"And to go further, we have to keep consumers happy - this should be the bottom line for the industry, the obsession of the industry. Are the consumers going to be happy if there are 50 different places to buy 50 different products? I don't think so to be honest."
So, how big a threat does Origin pose to the established order? Well, while it's undoubtedly a thorn in Valve's side, it's unlikely to be able to offer the same breadth of content as Steam, despite EA's claim that it hopes to lure third parties onto the platform. While, at a stretch, a few second tier publishers might be willing to hand over control of their IP to a competitor in return for added visibility, you can bet Bobby Kotick would sooner offer up his first born.
However, Divnich reckons a publisher of EA's stature has enough original content and a high enough profile to run a profitable ecosystem.
"It may be fair to say that this is a Wal-Mart versus mall scenario, where consumers who just want a simple one-stop-shop experience typically prefer the Wal-Marts and Targets of the world, and those looking for specialty items or prefer bargain hunting will spend the time jumping from one mall store to the next."
Further market splintering is likely as the switch away from boxed product gathers pace, especially if/when consoles ditch discs and go download-only too. And it's not just major publishers that Valve needs to worry about. Indies - who've played a big part in the Steam success story - are at it too. Did Notch need Steam's help to make Minecraft one of the most profitable games of all time? Nope.
Sure, your average indie needs the exposure that Steam's frontpage can offer, but increasingly it's their own sites that are providing Valve with stiff competition, rather than alternative online stores. Schaefer tells us that although Steam accounted for 65 per cent of all Torchlight sales, the second biggest contributor was the Runic Games site.
The other wolf that Steam needs to keep from its doors is piracy. That's another article for another day, but as long as Ubisoft and its ilk insist on invasive, customer-baiting DRM in their downloads, it's a threat that isn't going to go away.
And what is Valve's take on all this hoopla? Typically, it's taking the high ground, ignoring the scrapping going on in its wake and, like GOG's Rambourg suggests, keeping its focus on what has put it in the enviable position it sits in today: its customers.
"We've never really found it helpful to us to set up somebody else as a competitor and then try to evaluate ourselves against that," company president Gabe Newell told Eurogamer at Gamescom earlier this month.
"Sometimes if feels like you're constraining yourself to the mistakes and good decisions of other people rather than just focusing on customers and what you should be doing for them. So we don't often find it really helpful to sit down and say, well, these guys are our competitor and they're doing this so we should do this.
"There are a lot of companies that, if you identify yourself as a competitor to them, you're going to follow them right into the ground. It's like, oh, they're doing this, let's do this, too. Arggh! What happened to the music genre? We have a billion dollars in plastic. Yay! Customers are a lot more helpful than competitors in making good decisions."
While Steam might not have the market all to itself any more, with that attitude, PC gamers can only hope it continues to be a leader, rather than a follower, for years to come.
