Brad Wardell is CEO of PC game developer Stardock, which also recently launched the digital distribution platform, Impulse.
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I read with interest Edge's Age of Steam article. I must confess that I am surprised to see Edge, or anyone else for that matter, imply that Steam's early lead in digital distribution translates to permanent dominance.
By Valve's own admission, it only has 20 million accounts of which around a million and a half logon each day due to Steam defaulting to auto-starting when someone launches. To put that in perspective, that's about 1/10th the number of users Gamespot or IGN gets in a day.
We're at the very beginning of digital distribution. Steam may indeed become the Facebook of digital distribution but there's just as much chance it could become the next Friendster.
When one of these services has 20 million active users per day, then I think we can say that they have reached a critical threshold. Right now, however, by Valve's own statistics, about half of Steam users use it for just Counterstrike -- not including all of Valve's other games.
Steam certainly has a commanding early lead. Valve has made a number of shrewd business decisions such as acquiring Counterstrike and requiring those players to become Steam users. That instantly gave Steam a large installed base. Combined with Valve's outstanding releases of Half-Life 2 and Left4Dead have cemented Steam's position as the leading digital distribution platform.
As new titles come out bundled with Steamworks, which requires a user to become a Steam user in order to play the game (something I would normally think that the press would raise alarm about if this were being done by say EA or Microsoft or even Google), the Steam user base has continued to increase.
The real test for Steam, however, will be how it does as it faces competition as it becomes more common for titles to be released on multiple platforms at the same time. At that point, responding to customer requests, competitive pricing and quality of service will determine its continued success.
It's far too soon to assume that Steam will continue to dominate five years out. Thus far, it has largely operated without serious competition. With other services such as Impulse, Games for Windows Live, Amazon.com, GamersGate and others upping their own services with unique and compelling features, expanding their catalogs, and focusing on providing good customer experiences, I would be very surprised if Steam continues to have such a large market share (as a percentage) even 18 months from now.
Steam does a lot of things right. But there's certainly room for improvement which viable competition encourages. After all, MySpace once looked unbeatable in the social networking world but such premature assumptions look quaint in "the age of Facebook".