Originally Posted by UltraMega
Pretty short article so I quoted most of it:
Personally, I welcome more competition to Steam. Competition is good for consumers in the end, that's Economics 101.
And let me just add that all Valve would have to do to combat this is lower their Steam fees. It's not like they wouldn't still be rolling in cash if they did.
For context of the following - I am professionally directly involved in creating, facilitating, and designing platforms for companies across a number of different industries. A large part of my job is to explain to executives the economics and monetization of their platforms, and how they should decide when to charge for a service and when not to. I don't participate in predatory (company win - user/customer lose) initiatives, but regardless I am often exposed to a myriad of clever MBA's with new (very old) strategies to wring a few more dollars out of their customers, and am intimately
aware how little executives care about risk a customer bears, or even risk they
bear but the customer is the one who is damaged. So.. here goes.
Lets step back for a hot second and realize this isn't simple economics and you aren't buying a product, but a perpetual license to access a service. That entire sentence should give you pause when trying to look at this like it's just a matter of "getting a bigger cut" short sighted gross oversimplification of the fiscal dynamics.
Building one of these platforms is really, really, deceptively hard
. Associating the platform with the publisher / studio means the likelihood of the continued existence of the platform is tied to the long-term success of a single company, versus spread across the entire industry. For you to lose your steam library as things stand the entire PC gaming industry would have to vanish and stay gone. That's a huge difference.
The publishers who are trying to build walled gardens are insanely undervaluing the risk to their customers for marginal increases to their bottom line because they are more concerned about a larger cut than providing great service. These platforms, the infrastructure, and the people to build, run and grow them are not
cheap. This means their platform is not their product but a means to an end, as such any investment in the platform will be reactionary by the providers. When the platform is the sole offering from an organization as is essentially the case with Valve and Steam, the breadwinner product gets the most funding and can be proactive about improving their service.
Executives are also grossly under appreciating the feature gap between the minimum viable product they intend to release and the offerings of incumbent competition along with the effort required to make the platform viable and healthy from a consumer perspective. This is related to the Dunning-Kruger effect in that those who know little about a subject think they can definitely
simplify it more than their competition does. Nor are they motivated by these facts because this doesn't tangibly effect their bottom line - it only hurts them when things get so bad customers stop buying. So instead of having nice offerings where the platform is actively investing in maintaining things like review systems honesty and malicious content deplatformed, you will end up with a huge pool of absolutely awful options with near feature parity - equally crap for the end users. Competition only works as a motivator when the things competing are profit drivers, it doesn't help at all for cost centers (e.g. customer support, help desk.. etc.).
Now, IP is valuable
! and these executives love themselves some lawyers with contracts to make sure they always get a cut. Since they are likely the kind of people who would withhold compensation for things, provided they could justify it to themselves as a reasonable course of action and believe they could get away with it, they assume the whole world thinks like that too and they go buy the newest and "Bestest DRM evar!" they can find, and slap it all over the place. It makes sense because after all it's their
game and you just get a perpetual license to use it (as long as that DRM server stays online).
Oh, well I'm sure you can see where this is going.
What happens when one of the platforms / publishers / studios falls over with all that super important DRM server? You lose the game you bought, and there's nobody to sue. And a couple crappy games in a row can literally end your access to years of successful games in no time flat. It may seem unlikely, but its really not. Companies die all the time. The publisher doesn't care, they already got your money - and running this service is just a massive money pit cost center, so risk to your purchases never enters their equation. But lets say the world is Utopia, and none of these companies go out of business by some miracle, is your information safe? I've already pointed out these executives don't really care about risk or damage to their customers for the most part, unless it effects their bottom line. They aren't bad people, just too far removed from the people effected for it to be "real", and winning in business is just business
So in the astronomically low probability nothing happens to the companies themselves, what happens when the company decides to pivot away from the platform because its operation, development, and maintenance is now costing a LOT
more than the executives predicted, and they want out of this responsibility? The absolute best case scenario is they remove the DRM from the platforms and you're able to get a binary or installer to download before some cut off date. This is extremely unlikely. This assumes the products can be easily severed from the DRM, the games aren't designed to be tightly coupled to the services (either URLs, IPs or just in code style), the source code is still around and can still be
compiled for a new build with all the required dependencies and knowledge of the product, and the company feels like paying for that to occur on all of the available titles. The internet is ephemeral, things come and they go so being able to build things later is far from a foregone conclusion. A product that is easily severable from DRM is also a product which is likely easily hackable, so there's a good chance the DRM is tightly coupled to the actual product in same way. Which brings us to that point about tight coupling to the services, what this means is the server code and the game code are built as one product, and largely don't function without the counterpart. It's about 20 times easier (and therefor cheaper) to build code which is tightly coupled, so it's a very fair bet the bonus focused, bottom line obsessed MBA isn't interested in paying for the difference when all they can see in their understandable technical ignorance is two equivalent things, one being substantially more expensive than the other? They buy the cheaper one.
All of this is assuming no actual malice from the executive's perspective, just a very standard MBA sanctioned and reinforced decision methodology. Do you still think you as a customer should be looking at this as a simple economic choice between two products