How Steam Changed The Indie Games Market
Articles Blog

How Steam Changed The Indie Games Market

November 4, 2019

The video games industry is having an interesting
year. On the one hand, the major studios, particularly
EA, are facing major backlash over how they use loot boxes. Not only are micro-transactions a way to force
players to pay in advance, many government regulators now think the loot boxes are unlicensed
gambling. But on the upside, it’s been a fantastic
year for indie games, with titles like Cuphead, Hollow Knight and What Remains of Edith Finch,
among many others. Cuphead was made by two Canadian brothers,
with a lot of the beautiful animation, drawn by hand. It came out at the end of September and it’s
already sold over a million copies. Just to give you some context, probably the
biggest selling game overall this year is PlayerUnknown’s Battlegrounds, which has
sold about 20 million copies. Today, we’re going to look at how the game
marketplace, Steam, has had an impact on the sales of indie games. We’ll look at what use to happen before
it and whether this indie renaissance is a growing genre, or just a bug. In the early days of computing, games had
a very small market. The number of PC users was low and any computers
would require extra hardware to handle gaming. But a community of bedroom game makers did
appear. The games spread as shareware. Free demos and early versions would be given
out in magazines and then players could contact the designer to buy the full version. The numbers were small so this model worked. In the 90s, there was a huge boom in consoles
but an indie scene was impossible since they would have needed to manufacture their own
cartridges if they wanted to make a Mario-Kart-mod. As for PCs, the rise of 3d gaming meant that
a bedroom developer couldn’t keep up with cost and time involved. So big commercial studios basically killed
off the indie scene entirely. They were saved in the end, by the spread
of the internet. Now games could easily be distributed without
the cost of creating physical copies. Developers also had better tools to work with,
like adobe flash and Game Maker, designed by Mark Overmars. But it took a while for a market to appear. There were popular flash games on sites like
Newgrounds, but no one was making much money. Steam began in 2003, but it was nothing like
the platform we know today. It was created by Valve, who had grown to
fame with Half Life. For their next game, Counter Strike, they
wanted a way to control the patches and updates, and to stop people from cheating. It was controversial because they wanted you
to play the games through the platform, and in 2003, not a lot of people had broadband
internet. But, scepticism was swept aside when the hugely
anticipated Half Life 2 came out in 2004. If you wanted to play, you had to join Steam. This is what drove it’s adoption. And by the next year, they were allowing non-Valve
games to appear there too. As digital downloads became more common, Steam
kept adding titles and eventually redesigned its e-store to help people find their way
around this growing library. Like a number of other studios, Valve also
supported indie developers who wanted to use their game engine to make mods and games of
their own. Probably the first big hit on Steam was Garry’s
Mod, based of Half-Life 2. It came out in 2006 and has now sold 10 million
copies. The developer, Facepunch, went on to release
another best selling indie game, Rust, in 2013. The biggest indie successes didn’t come
from Steam though. Minecraft has sold over 100 million copies
and it came to life on a forum. But it’s an anomaly. Even it’s creator couldn’t tell you how
it got so big. Steam is still an indie developer’s best
shot at success. One developer, David Galindo made a game called
Cook, Serve, Delicious. He found that he made $50,000 in a week, once
his game made it onto Steam Greenlight. He had only managed $35,000 in three years
before that. It used to be that getting on Steam was incredibly
hard, but if you made it, there was big potential. However, now the problem is that the competition
on the platform is far too high at the low end. Steam simply lets too many low quality games
into the ecosystem. There are over 20,000 titles in there now
and 20,000 is also the average number of sales. However, the big titles skew that data. Thousands of games have no sales, or just
a few hundred. With Steam Greenlight and Early Access, Valve
tried to create a level playing field so anyone had a shot. But, it seems like a stronger filtering process
would help developers. It’s customers would certainly appreciate
it. What’s more, most unknown games only get
picked up in the sales. Steam often takes off as much as 75% so unless
you get a breakaway hit, it’s going to be very difficult to find financial success. And bear in mind that Valve take 30% of any
sale on Steam so, even at full price, that’s a big chunk of revenue gone. Big developers often choose not to sell through
Steam, since they have platforms of their own that can easily handle the sales. They also have giant marketing machines so
they don’t need Steam’s promotion. Blizzard Activision only sell their own games
and with EA, while they do sell others on their platform, Origin, the visibility is
low. and do offer competing options
but they are only taking a very small slice of the pie. So, Steam is not the golden ticket that some
developers think it’s going to be. But, it certainly breathed life into the indie
games scene, after it recovered from the 90s. Steam have a major monopoly over the PC market,
and monopolies are bad for developers and fans. But until a good alternative platform grows,
at least there is some place where indie games are seen and promoted. Otherwise it would probably be EA everywhere
you look and, no one wants that, right? Want to learn more about business theory and
history? Be sure to like and subscribe to be notified
of our next segment.

Only registered users can comment.

  1. Great video! It felt like you wandered off the topic and focused on why indie games are still not in the lime light rather than how steam helped indie games at the end but no problem I love these videos, keep up doing the good job.

  2. I'm a GOG fanboy all the way. Heroes of Might and Magic, Baldur's Gate 2, etc…never have tried steam nor do I think I will.

  3. Well big change concerning loot boxes- soon a law will be passed outlawing both them and 'egregious' micro-transactions!

  4. If you want to grow your business and start working with clients that can afford you, check out our free presentation at

Leave a Reply

Your email address will not be published. Required fields are marked *