Steam has been around since the early 2000s, launching alongside Half-Life 2 much to the chagrin of the gaming community at the time. What was seen as yet another needless DRM solution has ballooned into one of the most important pieces of software in gaming today, snowballing Valve into a powerful position capable of forcing developers as large as Activision Blizzard to comply with rules only found on Steam.

It's not as if Steam is the only digital distributor on PC, either. Companies like Ubisoft, EA, and Epic Games have all tried with varying degrees of success to compete with Valve, yet all of them have failed to attain even a sizeable fraction of the player base that Valve has managed to captivate. Epic Games has been giving away free monthly games as a way to entice gamers to use its store, and they're not smaller titles either. For example, GTA V was given away for free a few years ago, and other big titles have been over the years, too.

Recently, Ethan Evans, former VP of Amazon Prime Gaming, took to LinkedIn to explain what he felt had gone wrong. The key takeaway from Evans is that Amazon had "underestimated what made consumers use Steam." Despite being a significantly larger company, Amazon failed to make a dent in Steam's market share.

Steam is a "store, a social network, a library, and a trophy case all in one"

Amazon struggled to compete with Valve because of that

Evans, in his LinkedIn post, highlighted how Steam isn't just a storefront. It's a social network, it's a library, and it tracks your achievements. Already, any competing service needs to match those features (or surpass them) to simply even have a chance of convincing users to make the switch. Steam has relatively few problems, and gamers aren't going to switch to a new platform, away from all of their games, just because a new platform exists.

For example, I can open up Steam, see the games my friends are playing, and ask them to play or invite them to my game. I can see the achievements my friends have unlocked, I can see the games they're buying, and I can see the games they recently added to a wishlist. Even through achievements, I can see roughly how far a friend of mine has made it into a game's story. The social aspect of Valve's Steam is an incredibly important part of the experience, and there's very little more that the company could actually do to improve it further in a way that gamers would actually use.

If a competing service doesn't offer all of those features, then why would I switch? I already have my games on Steam, so that's a big deterrent, but why would I switch to a service that doesn't even have all of the features that I use?

Valve has shown itself to be consumer-friendly

Significantly more than others, anyway

Valve is by no means a perfect company, and has made several missteps along the way that disadvantaged consumers. However, all major companies have done that, and the difference is that the concessions Valve has made have been genuinely beneficial to consumers, too.

For example, the company was one of the first (though not the first, EA's Origin and GOG beat them to the punch) to introduce refunds for games purchased. You could get a refund within 14 days after a game's purchase, so long as you had played for less than two hours. Valve was also quite lenient with requests at the time, extending significantly past the 14-day window for users who wanted to refund content they had purchased before the new policy came into place. Nowadays, refunds for game purchases are commonplace, with companies like Epic Games offering the exact same terms on its own store when it comes to refunds.

More recently, Valve forced Activision Blizzard to disclose that it was using AI-generated assets in Call of Duty: Black Ops 6 following a Steam policy change in January 2025 that required game developers to disclose if AI contributed to the game's development cycle. Given that the usage of generative AI had long been speculated in more recent entries to the Call of Duty series, the ability of Valve to force Activision Blizzard's hand into admitting that it had been used demonstrates just how much power Valve holds.

In another big win for gamers, Valve also disallowed paid advertising and paywalls in games. This was reported as a "new" addition, but in actuality, this policy had existed for years and was merely turned into a dedicated page. You could argue that Valve wanted to be able to take a cut of all revenue earned through its platform (as advertisements would go straight to the publisher), but it's also true that advertisements are annoying for the end user.

In a similar vein, Valve banned crypto and NFT games. While many saw this as a move by Valve to protect its bottom line, the company once accepted Bitcoin as a payment, but ultimately stopped accepting it because of the volatility of the currency and the high percentage of fraudulent transactions, so it's not as if the company is totally averse to cryptocurrency in general.

In an interview with PC Gamer, Valve President and Co-Founder Gabe Newell said the following when asked about NFTs:

"There's a difference between what it should be and what it really is currently in the real world. And that's sort of where we were at with the blockchain-based NFT stuff: so much of it was ripping customers off. And we were like, 'Yeah, that's not what we want to do, we don't want to enable screwing large numbers of our customers over,' so that's what drove that decision. There's nothing inherently about distributed ledgers that makes them problematic. It's just so far that's almost always what our experience has been."

Even if it comes across as Valve protecting its bottom line, the move still benefits consumers. it may be the case that Valve would rather developers use its Steam Market so that it can get a cut of transactions, but it's also true that NFTs have an extremely high rate of being used to defraud customers.

Finally, Valve spent years developing Proton, a translation layer that allows games built for Windows PCs to run on Linux. While it serves the interests of Valve in the sense that the company could launch SteamOS on the Steam Deck without needing to pay royalties to Microsoft, Valve also open-sourced it so anyone could use it on any device. Because of that, it wasn't just restricted to games bought on Steam either and can be used with games purchased anywhere, including those purchased from competing stores.

All of this is to say that Valve can both protect its own business interests while doing so in a way that protects consumers and so far, gamers feel that they can at least trust Valve to make decisions that, more often than not, benefit both the consumer and the company at the same time, rather than just the company at all times.

A Steam competitor would need all of this and more

It's a catch-22

Valve has managed to build a reputation for itself as a consumer-friendly multi-billion-dollar corporation. Whether or not you agree with the assertion that the company is consumer-friendly, it's undoubtedly true that Valve as a company operates in a significantly different way to other game developers and publishers in the space. It's a privately owned company with no public shareholders to answer to, which has a number of benefits and downsides.

For example, games at Valve get made when they get made. There's no rush to get them out the door, as there's no significant monetary pressure to release a game like Half-Life 3 despite the hype that's been brewing for nearly twenty years. Games have been started and dropped (such as in the case of Half-Life 3), or even remade, like in the case of Deadlock (formerly Neon Prime) and Half-Life: Alyx, which saw its story rewritten after external playtesting and its introduction sequence significantly shortened.

All of this means a sequel to your favorite game is never guaranteed, and that can be deeply disappointing to the fans of a series. However, this development model also makes it so that practically every single game Valve has ever released is highly regarded as a best-in-class experience. Alyx is still widely considered to be one of the best AAA virtual reality experiences, and Valve holds four of the top ten titles on Metacritic's PC section (though one of those is The Orange Box, a compilation of various Valve games).

Despite the disappointment this can lead to when you wait twenty years for a game's cliffhanger to be resolved, fans of the company at the very least understand why we never got Half-Life 3. Valve wasn't happy with it, the game wasn't good enough, and the developers didn't enjoy working on it. That's at least an admirable reason to cancel a game, rather than forcing it out the door and giving die-hard fans of the series a half-baked sequel in an effort to make money from it. That's disrespectful to the consumers, yet plenty of other companies have done exactly that in the past.

As a result, Valve has managed to put itself into the position that it has through many decisions that differentiate itself from much of the industry. A would-be Steam competitor would need to do everything that Steam does, including placing restrictions on what other game publishers can and can't do. Steam's first-mover advantage means gamers already use the platform with all of their games in place, and how can a new store on the block convince other publishers to bring their games to that new platform if they're going to introduce restrictions that match Steam's?

Valve has solidified Steam at the very top of PC gaming, and the moves that it has made to benefit consumers put it in a uniquely advantageous position. Any would-be competitors would need to match everything Steam does, but matching all of those would likely disgruntle publishers and make it unlikely for a publisher to launch their game on that platform without a serious amount of negotiating involved.

Valve has arguably monopolized PC gaming, and from the outside, it seems that the company does very little to abuse that position. However, a class action led by Wolfire Studios and Dark Catt Studios asserted that Valve abuses its position in charging a 30% cut on all sales in its store. The trial is scheduled for later this year, which Valve intends to fight.

Despite that class action, for the foreseeable future, it's going to be extremely difficult to dethrone Steam. Even if it forces Valve to cut its rates and pay developers money for the cuts that it took from sales, in the long run, it may even benefit Valve. Epic Games charges a 12% cut on all sales, so a lawsuit that forces Valve closer to that figure might actually make the service even more appealing for developers.