Steam: Valve’s Ingenious Digital Store

Tim By

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The one thing in common about movies, television shows, music or books is that they've all gone digital. I use Netflix instead of cable, Spotify instead of iTunes, and Kindle Reader instead of paperbacks. Want to guess what I use for video games? Yup, Steam.

Steam has been around for a while and was one of the first digital distributors who really figured it out. The Valve team noticed that video games don't have to have a $60 price tag. Lower pricing means more volume sold – cutting out the packaging and selling digitally is very cost affective. They are constantly having specials, game bundles and discounts because they know the profit of a customer doesn't end with one sale. I know the first time I used Steam was for a super discounted Portal. Since that day I've bought two other discounted games and have some pretty boisterous brand loyalty.

With Steam already owning over 50% of the video game digital distribution market they have a huge head start on competitors. They have set the standard of rewarding game developers over twice what they receive from their normal retailers. This is going to be a tough pill to swallow for companies like GameStop. They have been screwing over their customers and clients forever. Now that they must deal with a dying business model, they better jump on board the digital distribution train. [Via]

Tim Co-Founder After a quick stint in Baton Rouge, Louisiana, Tim moved to Austin, Texas at the ripe age of one. He then spent the next 17 years there experiencing all that Austin had to offer. Nightlife, music, ...

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