Over the past 10 years the video game industry has experienced tremendous growth. A large part of this growth can be attributed to the increase of affordable high-speed connectivity, which creates an environment where independent game publishers can develop games and unleash them to the masses.
By far the most popular distribution channel in digital gaming is Valve’s Steam platform, which now controls more than 50% share of the digital distribution market for video games. Due to Steam’s size, many developers think that Steam is the only viable option for digital distribution, but there are alternatives.
Before we discuss other options it’s important to understand the pros and cons of Steam, as it may be in important component in your overall ecommerce strategy.
Pros:
- With 30 million users, Steam gives your game a lot of potential exposure.
- Your hosting and bandwidth costs are taken care of by Steam.
- Steam offers non-exclusive contracts, which is key as it allows you to widen your distribution channel.
Cons:
- Valve has final say over what appears on Steam, meaning your creativity will be subject to Valve’s approval process.
- Valve doesn’t publish commission rates, but chances are you’ll be paying at least 30% royalties to steam for each transaction.
- Steam currently only supports 3 transaction currencies (USD, EUR, GBP). With a world-wide audience, many of your customers may be forced to pay currency conversion fees to buy your product.
- The Steam client is a required download in order to purchase and play your product. Many users may not want to download the Steam client and this is may be additional barrier to purchase.
Using A Direct Ecommerce Partner
An option that is often overlooked by game publishers is pushing customers to a direct ecommerce partner instead of a distribution channel like Steam. Recently, EA made some news by not publishing big-name titles like Battlefield 3 and Star Wars: The Old Republic through Steam.
Despite not pushing any pre-sales through Steam, EA managed to break presales records entirely through a direct channel. Eventhough EA is a house-hold name in the video-game sphere, the important lesson here is that gamers will make purchases outside of Steam.
Fortunately, as mentioned previously, Steam offers non-exclusive contracts. This means that you can continue selling to customers on Steam while managing your own direct ecommerce channel. The way this generally works is by adding a ‘Buy’ option on your game’s website, landing pages, and trial versions. This buy link directs a customer to a direct shopping experience instead of a distribution channel like Steam. There are a number of benefits to this option:
- You don’t have to jump through any hoops to get software listed. Instead the ecommerce styles and experience are up to you.
- Depending on how you setup your direct ecommerce channel, you can offer your customers more currency and payment method options than Steam.
- Generally speaking, commission costs for direct ecommerce channels will provide much better margins then Steam.
- Your customers get a better shopping experience as there are fewer barriers to purchase.
If you are looking to work with a third party ecommerce provider to help manage your shopping cart and payment processing, there are a few things to consider:
- Non exclusive contracts – Just like Steam, your direct ecommerce partner should not have an exclusive agreement. This will allow you to sell your games direct and through channels like Steam.
- Currency/language support for your customer base – Make sure you offer currencies and payment methods appropriate to your customer base.
- A partner who is familiar with direct ecommerce sales and can add value by providing you with recommendations and best practices.
Keystone
: Steam should be an important component of your ecommerce strategy, but not your only component. Pushing your organic traffic to a direct ecommerce experience is worth exploring.
I am currently at the Cloud Gaming USA conference in San Jose. Feel free to tweet at me if you’d like to schedule some time to talk or challenge me to your favorite cloud game.
Mike Batko contributed to this blog post.
