Why Steam Is Steamrolling Retail

At Kotaku Australia we've talked about digital distribution quite extensively - in our recent mobile gaming feature, but also in our discussions on the issue of pre-owned games, and the price of games in Australia. This article, just published over at MCV looks extensively at the benefits of using Steam over retail, and for anyone interested in how videogames are sold it's a must read.

It's written by Darryl Still, international publishing director for PC publisher 1C, and looks at why retail is becoming increasingly irrelevant both to consumers and to publishers. It's from a UK perspective, but still has relevance to the Aussie market. Here are a few select quotes...

So, let’s say £10 per unit sale goes to the publisher, £3 to the developer/sub-licensor, and it’s in your bank five months after the customer has paid out £30.

Compare that to the digital model. On a £29.99 sale, the digital partner will pay the publisher – or in many cases direct to the developer – between 60 and 70 per cent, by the end of the month following the sale.

Wow. To recap: on a sale over the counter today, we can have our £3 by the end of March, or on a digital sale, we can have £20 by Christmas.

Remind me why we should choose to go with retail and decline to let Steam sell the game?

It's interesting stuff, and we recommend that you head over and read the whole thing.

So PC gamers, are you still buying games at retail? What works better for you?

OPINION: Retail vs. Steam [MCV


    Retail is perfect for when the publishers price fix the steam price. I always think it's worth paying $10 for a boxed version if they aren't going to discount the digital version!

    Otherwise, for games like VVVVVV, Super Meat Boy, The telltale games, and the products of a lot of other independant developers, digital is the perfect medium by which they can distribute their games, as it means they can easily reach an audience without losing too much potential revenue to a publisher/distributor.

    I think retail and digital need each-other to survive, no matter how much they complain.

    We've touched on this before, but I still buy retail boxes because I like having a physical representation of my money spent. Plus, if I'm buying in AU, as Tadmod said, if the publisher does make Steam jack up the price, then there's not much savings in digital versions to be had.
    However, if there is massive savings to be had (hurrah for Steam holiday sales, amirite?), I won't pass that up either.
    Ultimately, I'm just being selfish, and doing what's best for me. I very rarely buy a game and go "Gosh, if I buy it this way, the devs are going to make more out of it". Maybe my lack of consideration is a bit bastardy, but as a consumer, I try to make the most of my dollars.

      I don't know, for me I have to say I've bought a game from a certain place online if I know it's meant more for the developer, even if it costs slightly more. That slightly more is never really much, maybe $5 usually. Basically if something's available online I check the developer's site first to see where they prefer the purchase to be made. Should be mentioned too though that I'm talking about relatively small developers, such as Amanita Design and Machinarium for example.

    I haven't bought a physical pc game more or less since doom3, I personally don't see a point, heck the only reason I have a cd drive was to install Windows, retail is most of the time more expensive, harder to come by niche games and cds become lost and scratched. I have an extensive library of games to choose from at the click of a button, yes they need downloading but with today internet speeds how's that a problem?

    Retail would need to pull something big for me to care about boxed versions of a pc game

    As a long time PC gamer. I find myself playing more games on my ps3 and 360. Why? because I want to sit on a comfortable couch, watch on a big screen, controller in hand and with 5.1 sound. I generally only get the big releases on PC that are not on console, with the exception being some FPS (as I prefer them on PC). While I think Steam is a fantastic service and has some amazing prices I think I need to game much more on my PC to make full use of it. In an ideal world Steam would exist on console and we wouldn't have to put up with MS and Sony ripping us off.

      I do all those things ('cept the controller part).
      just take your PC to your TV.
      Plug in digital audio cables.
      Plug in monitor cable.
      (You may need extender USB cables to get to the couch with your mouse and keyboard)
      Sit on couch.
      Play games.

      But I suppose you need (a) graphics card(s) that support HDMI output or a screen that supports DVI input.

        Or you could just, you know, go from DVI to HDMI or straight D-Sub.

        Tried all those things. Played HL2 on pc for about 30 minutes on the couch with the big TV, etc, etc. It was sooo unconformable no matter what I tried, so I never tried again. Couch and controller is the only way.

    I honestly think the notion of having a tangible retail box is becoming a bit archaic. I love seeing all of these new developers flourish, and it's solely because of how awesome digital distribution is for everyone involved.
    I'm still a sucker for boxed versions too, but now only for ones that truly deserve it and get a special little spot on my shelf. I don't need to fill it with every game I purchase. That's for my pc and console hdd's now.

      "I honestly think the notion of having a tangible retail box is becoming a bit archaic."

      Completely and utterly agree. After the backache I went though moving into my own apartment, I've pretty much given up on the notion of material objects- they're simply not worth it. If something is cheaper digital, that's how I'm getting it.

        I'll add that virtually all that "sexy box art" everyone is talking about went straight in the bin when I moved. Complete waste of time and space...

          Haha, well done. I'll admit I still hold onto some golden oldies, and as I said will hold onto one or two recent titles that REALLY grab me. As for the rest, better kept digital.

    I buy from retail if it's a collector's edition or newly released and I want it, Steam doesn't put enough of a discount on just released games to warrant losing sexy box art.

    Other than that, for old games I cannot find anymore or ridiculously discounted games, I'll get it from Steam. I prefer owning the physical box to digital, but I'd prefer it if when the retail stores go bust that we can still get physical copies from the publisher.

    Witcher 2 collector's edition is a prime example, there is a lot there but none of it is tangible!

    I tend to buy retail for one thing: No downloading.

    I'd rather buy a copy of a game and play it right away than dip into my download quota and wait a day for it to download.

    Still, most of my games I buy are on steam, mainly because of the price. they need to make me buying the game at retail worthwhile, which is why I'm buying the Collector's Edition of the Witcher 2

      Download Quota + Price;
      Usually an retail box install is faster than a 10GB download.
      I love box art - all that effort and no one will see it in a digital download - my shelf looks awesome.

        I think in Australia at least the download quota keeps Steam at bay a little. My ISP, iiNet, has a 1TB plan now (which is slightly excessive for me) so that factor is just gone. But it still takes time to download, but Steam does offer a pre-download feature when if you pre-order it, it downloads prior to release.

        For me it really comes down to the price, my shelf space is gone due to boxes...

    I'm sure Steam is an excellent way to distribute games, but for people like me who live in areas without anything approaching a fast or reliable internet connection its pretty awful. Its quite annoying when I purchase a boxed copy of Fallout:NV and then have to wait 12 hours for a tiny update because my satellite constantly drop out.

    Actually my problem isn't really with steam nut more my ISP I guess.

    Digital Distribution all the way. Case in point 6 copies of AvP for $25.

    I have an extra copy of Steam Alien vs. Predator to gift so prove you are a fan and be the first to tell me who says these two quotes. In Aliens who says "..Mostly" and in Predator who says "I ain't got time to bleed". Include your steam ID too!

      This is all going off memory

      Newt says "...Mostly"

      and I believe Blain says "Ain't got time to bleed."

      Hopefully thats all right if I remember correctly :)

      Steam account: 5_Sided_Fistagon but I go by The Ventura

        Correct! adding you so I can gift it to you bud

    I was a big fan of Steam for a long time, I've spent ridiculous amounts of money since first getting Half Life 2 years ago.

    Anyone who had never had an experience with online purchases would receive a 5 minute spiel about how awesome I thought Steam was and why it will be the future of gaming.

    This was of course, until I moved into a new place which has been having some trouble obtaining an internet connection.

    Steam's offline mode one day, reset itself. Essentially locking me out of nearly my entire game collection. I am now in a new apartment with no internet connection & no way to play any of the games I've purchased legally.

    What further frustrates me is Steam's interface is built for high-speed internet connections, so even when I use internet tethering, the Steam updater hits about 20% before restarting.

    At least Blizzard's updater still works & I've been able to get my Starcraft fix.

    Until DRM is created with the understand that there will always be some people without a decent internet connection, I believe that there will still be a use for Retail.

    9 Times out of 10 my PC purchases or digital. It's only a matter of retail for me when I genuinely care about the game and I want cool collectors edition/pre-order bonus gear (although retailer exclusives can go to hell).

    For the last two days I started shopping online on Steam for Deus Ex, KOTOR, and Mass Effect 1 + 2. I think I find getting them through steam a lot easier, you don't have to put up with AU overpricing as much, and you get the advantage of the content being there when you want it. Lost count how many times I went to JB or EB and they simply give me a "Sorry, all sold out" excuse, and back then I wasn't driving, so very frustrating. Steam online purchasing has made getting PC games so much easier and smoother.

    I import from overseas. Why? Because I'm not going to pay the ripoff prices at local retailers, and I'm not going to pay the same ripoff prices from Steam. I'd rather wait a week and save 40%.

      Huzzah for today's international market.

    hate steam. They over charge for digital copies of games, force you to install it to play games you bought on discs, and whenever it decides randomly might disable you from playing any of your games if you don't have the net.

    Fuck it.

    I like having boxes, because I like to collect things. I also like knowing that I have the game physcially on a disk somewhere, so If something happens (like my computer dies) I can re-install games fairly painlessly.

    That being said... I like having money more than I like boxes :P. 90% of the time I will buy a game off steam, simply because it's cheaper! Why, just the other day I bought Monkey Island 2: Special Edition for $2.50 (during a sale). Where else but steam can I buy a game for the price of a double cheeseburger?

    It looks like digital distribution is certainly the way of the future. Customers love it, developers love it, the only guys that don't love it are the retail shops themselves, and I have no sympathy for them!

    The few times I've picked up retail PC games in the past couple years is that the games are steamworks titles like Just Cause 2 or Metro 2033 and its been cheaper than buying from steam. Other than that all my PC purchases are digital.

    The only retail game I've bought in the last 12 months was Starcraft 2 because I couldn't find out if the Australian version was available for digital download (the one on BNET appeared to be the NA version). Other than that though, almost every one of my game purchases both in the last two years, and for the foreseeable future will have been DD (mainly via Steam).

      There was an australian version available from battle.net, however since Activision is involved, so was the wonderous practice of regional pricing, and it cost more than from most retailers. US$90 I think. I got mine from GAME, so was only AU 70 or 80.

    It's all about price/risk for me. I refuse to buy digital if I can't redownload it, unless it's dirt cheap.

    With any digital service, they can always go out of business and I will potentially lose my collection, so I have a limit on how much I'll spend on a digital game.

    A boxed game will generally win out over digital if the price difference is small, cos I like shiny things and a disc will always be there to install, hassle free.

    My money will only pass through Steam for games that aren't region priced (thankfully, the majority are not).

      This paranoia is unfounded. I've used Steam for years, through multiple computers and my library of games can always be downloaded once I've purchased the license. There are games I've purchased but don't have the time to even download, but they'll always be there.

      The fear of being part of a platform that is longer supported is reasonable, but if you're talking about Valve. They are NOT going under, at least not in the very near future. If you have this thought that a company will drop support once things go south, there are a lot of things I'll worry about more than my game collection.

      -If Google goes under, all my Gmail information and associated details will go missing.
      -My contact details can disappear if my phone uses a cloud-based system.
      -Credit card/purchase details with eBay and Pay Pal.
      -Blizzard battlenet.
      -Facebook contact information

      Digital and cloud-based distribution is here to stay. If I can trust these services with a lot more serious stuff than games library, I think we're pretty fine with Steam, which has never failed. I'd have agreed with you back in 2000, when people were still unsure about online shopping etc, but it's 2010.

    I am increasingly being sucked into digital distribution.
    Steam sales are just so delicious. Very quickly now my digital games will outnumber my boxed ones.
    And we haven't even hit Steam's usual crazy Xmas bundles yet.

    Given that most retail operations in oz dealing with electronics are engaged in what is a borderline cartel when it comes to pricing who whine at the drop of a hat at online prices being cheaper i pretty much refuse entirely to buy retail these days.

    I hate this region restrictions. I just bought Fallout New Vega at Steam in English and got the German version since my IP is German. I can't even give it back. Haven't found a region free download shop yet. So its Amazon UK and retail box for me again.

    Speaking of dirt cheap, check out http://www.deals4downloads.com. There must be hundreds of deals. I just wished they would list some infos on DRM and download limits.

    I think the current retail + Steam environment is ideal. With a pure digital system, there's the very real risk of publisher's price fixing because they know they're the sole distributor. In these cases, having retail competition between chains is better.

    We've all seen the horrible mess that was the PSN PSP store, with its over-priced, out-dated games that costed more than simply buying it at JB.

    If its a big major release (WoW cataclysm for example) I would buy the retail boxed version because of internet speed/quota. But for smaller games and indie games its steam.

    Also, as a Mac user, I have to say games are (imo) far more accessible as digital downloads than they are retail. If I'm hankering for a new game I can walk into my local games store where I have no clue what games are Mac compatible (and neither do the staff generally) or I can go to steam where I can just click that shiny "Mac" button and see a list of what will work. My only gripe with Steam is that for Macs the selection is very small. Its getting better, but still... :)

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