The Problem with Steam

The supposed saviour of PC gaming is now a threat.

PC gaming before Steam was a fairly simple affair. You’d go to the shops, buy a game on a CD or DVD, take it home, and install it. There were instances of painful DRM as time went by, but by and large most installs were fairly simple. If a patch was released, the game would either alert you and download it, or you’d have to be aware of it by some other means and do it manually. If your physical media was lost or damaged, you were screwed.

In Australia, for the longest time, physical PC games have cost $89.95. I can remember this pricing all through my childhood and teenage years. That was just the cost at the local EB Games or whatever, and there was pretty much no deviation from that RRP, until the game was old and it was time to go on sale. Expansion packs were about $49.95 or so (memory is a little hazy there). Console games, by comparison, had hovered around $99.95 to $109 – quite a markup on the PC. Buying and amassing games on the PC has been cheaper in the long run.

In the retail market today though things have changed somewhat. Console game still have a $10 to $20 markup on the PC, but PC titles are much cheaper at retail than they’ve ever been. And what was the driving force behind that? Steam.

The Birth of Steam

I remember when Steam first came about. Everybody hated it. It was absolute arse. Back in 2003 when it first launched, Valve basically forced people onto the platform by leveraging the popularity of Counter Strike. Prior to Steam, Valve’s Half Life-based games used a network called WON to allow multiplayer games to be located via the in-game server browser. With the advent of Steam, Valve announced that WON would shut down, and no more updates would be released for Half Life or Counter-Strike etc outside of the Steam platform.

Basically, they forced people onto the new platform. Their hotly anticipated new title, Half Life 2, was also going to be tied to the Steam platform. No Steam? No games. Steam was online DRM first and foremost, and in its initial iteration it was little more than a client that administered that DRM and updated games. That was pretty much it. Its offline mode was even worse than it is today (if you can imagine such a thing).

When HL2 launched, it was a nightmare for many users. If your connection was unstable, it wouldn’t decrypt and you’d end up with a game you couldn’t play. Those who decided to buy HL2 directly on Steam were even moreso at the mercy of content servers. Much was written about Steam, draconian DRM and fears of the new world of online DRM.

And yet today we don’t give it a second thought. We’ve embraced Steam as the Platform to Rule Them All. Cries of “No Steam? No sale!” are actually common place. We’ve completely forgotten the roots of Steam, and many gamers today weren’t even around for the early days when Steam was universally reviled. So what changed?

The Eternal Sale

Steam first offered third party games in 2005, starting with minor titles like Ragdoll Kung Fu (yeah, that was a thing) and Darwinia. As the platform gained momentum, bigger publishers became attracted to the platform. Slowly, Steam took over PC gaming as a single platform that almost dictated whether or not a game would be successful. Big titles like Call of Duty 4 came to the platform, and slowly PC gamers stopped shopping at retail outlets. This was before we had the almost perpetual holiday sales that we see today.

Why did we flock to the platform that we once hated? Because it was cheaper. In Australia, the Steam store has always been in US dollars. It still is today. In 2007, when Call of Duty launched, it cost about $90 in a physical box from the local EB Games. On Steam it was about $50 USD or so. Even though the exchange rate in 2007 wasn’t overly favourable, it was still miles better than the retail price – a significant discount. This was one of the major selling points of Steam and digital distribution – by not having physical boxes and media, and not shipping them to your local store, it cost less money to distribute and thus you’d pay less for the title. Unlike the US, EB Games and similar still had healthy PC game sections, so obtaining boxed PC games wasn’t an issue – but they were still expensive.

Activision left it like this for a while – until they noted that Australian PC gamers were suddenly using Steam to buy CoD4. So they increased the price to $89.95, to match the retail box price. Wait, did I say match? I meant ‘exceed’ – that $89.95 was in USD, which from memory equated to about $113 AUD at the time! So not only did you not get the physical box, but you’d pay more for the digital download.

Slowly, over time, this practice has expanded. Regional pricing is now in effect for Australia from many big publishers, and Valve (despite now having significant clout given that they are the largest digital distribution platform on the PC) permits this to occur. After all, it benefits Valve to have more money flowing through the coffers. As a result, Australians pay a price set for Australia, but in USD and not in their own currency.

Valve were recently accused by the ACCC (Australia’s consumer protection watchdog) of attempting to subvert Australian consumer law regarding refunds. Valve’s argument was that they don’t do business in Australia – despite the fact that they have a region-specific store for Australians with region-specific pricing, and apply region locks on games that are refused classification. This sort of behaviour demonstrates that Valve have significantly shifted from the earlier days of apparent benevolence with Steam. They’re now less concerned with how gamers use the platform because they know the choices have rapidly run out.

So what’s changed?

Gamers are actively hostile to most other distribution platforms. EA Games tried to do exactly what Valve did with Origin, and again were reviled for it. Despite the fact that Origin worked better on release than Steam did when it was released (which one would expect, given how much time has passed), everybody hated it purely because it’s EA and it’s not Steam. GOG survives primarily by offering older games with extensive support – something Valve can’t be bothered doing with Steam – but still lags behind Steam significantly with larger titles. Steam is still, far and away, the king of digital distribution on the PC, and the PC gaming community keeps it there by keeping any competitor as far away as possible.

But cd key sites have pushed back. Let’s look at a modern example. Prey (2017) is $79.95 on the Australian Steam store right now – that’s $79.95 USD. At the time of writing (1 AUD = 0.74 USD) that’s $108.03 AUD! At EB Games, a physical copy is $89.95 AUD – $18 cheaper. JB HiFi has it for $74.95 (and you get a mug) – $28 cheaper – or just the game itself for $59! Alternatively, you can buy a key on CDkeys.com for $48.39 AUD – nearly $60 cheaper than the Steam asking price. For comparison, the US Steam price is $59.95, or $81 – very similar to the RRP at EB Games (and close to typical PC game price).

This absurd pricing is rampant on Steam, particularly for AAA titles. Perhaps the biggest kick in the dick of all is that JB Hifi (who regularly have the cheapest prices for physical games) offer a PS4/XB1 copy of Prey for the same exact price as the PC game. Even if you were to buy Prey from EB Games, the most expensive retailed, it’d still be cheaper than buying the Steam copy, and you’d have a physical disk that you could trade in or give to someone else. Basically, if you buy a new release game on Steam (and that price sticks around for a long time) you’re paying a premium for a game that gives you no physical media, a license that can be revoked at any time, and no ability to trade that game either for credit or to give to someone else.

If you want to buy a Steam game, you’re mad not to get it from CDkeys.com or OzGameShop. You’re mad to buy it from Steam. If the AUD weakens against the USD, the valve gets even worse for Australians. The fact that we’re given a regional store in a currency that isn’t even our own is insulting. Valve and publishers are treating us like morons, and I can’t praise Steam as a platform anymore because of this practice.

And Valve have struck back with the latest changes to Steam. As reproted by Kotaku, Valve are cracking down on a load of loopholes for gifting. This comes after Civilization VI had region-locked keys to avoid people buying keys from cheaper regions for use in their own region. There have been many grey market sites that significantly subvert Steam store pricing by trading keys from extremely cheap territories (like former USSR states) to those in wealthier markets (like the US/UK/AU). These sites are actually harming the market, and Valve are now implementing a policy that prevents gifting titles from regions with significantly cheaper pricing to other regions.

Regional pricing does have a purpose – it’s designed to make titles accessible for people in poorer regions with significantly less disposable income. Asking someone in a developing nation to pay $60 USD (or $79.95 USD while we’re on the topic) for a game is pricing them well out of the market – and having a significantly discounted price is a way to break into these markets and ensure supply when there’d otherwise be piracy instead. From that perspective, I agree with the changes.

But what this ultimately will propagate (if Valve expand it, probably at the request of publishers) is the kind of price gouging that goes on in regions like Australia – where we’re paying significantly more for a digital product for absolutely no reason whatsoever. Today it’s gifting, tomorrow we’ll see increased region locking of keys and sites like CDkeys and OZGS will lose their Steam key market. And publishers/Valve will reap the profits, because we’re stuck with Steam now, and it’s too late to refuse it. We let it take over PC gaming and now we’re going to be stuck fighting whatever demons come through the portal.

Aren’t you being melodramatic?

Okay, perhaps I am – perhaps I’m basically writing my own apocrypha by this point and claiming the sky is falling for no good reason. And to be fair, we do have a higher living wage than the average US citizen and thus may have more disposable income (everything else also costs more though). But the so-called “Australia tax” is a real thing. The markup on IT-related things, be it hardware or software, appears to have no actual reason for existing other than “it’s Australia”. This is especially true for digital distribution – remember, Valve says they don’t do business in Australia, therefore there’s no reason Steam can claim regional pricing due to the increased cost of doing business in this country!

I seriously have to question the valve of PC gaming in Australia at times. While Steam regularly has monster sales which are of unquestionably good value, the cost of PC gaming in Australia is still remarkably expensive – all of the software and hardware is more expensive, the software especially so, and we’re being treated with borderline contempt by some of these outfits. I’m primarily in PC gaming because of the increased fidelity and cheaper ongoing cost, but that cost is slowly rising. If key sites like CDkeys shut down, I’ll have to go back to buying retail copies, and I might end up swapping to console gaming. Why wouldn’t I at this point? AAA games are basically console ports, in some cases they cost the same as the PC physical copy, and I’m not upgrading shit until the next generation. Why should I pump money into Steam when Valve and other publishers treat us as an afterthought, as a cash cow sector to milk dry?

I still love PC gaming. We’re still the superior platform. But the cost of PC gaming in Australia has no rhyme or reason – especially when it comes to software. And to be fair, consumers have to shoulder the blame. We elevated Steam to the top, we kept the competitors away, and now we have to live with that decision.

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