Valve launches Steam and starts moving games off shelves

What happened

The original problem was mundane. Valve's online shooters needed frequent updates, and getting them onto millions of machines through third-party download sites was slow and unreliable. Cheating was a related headache, easier to police if the company could verify what players were running. Steam solved both by keeping a persistent connection between the publisher and the installed game. Players disliked it intensely at first, complaining about mandatory updates, account requirements and a program that ran whether or not they wanted it.

Selling games through the same channel followed naturally. Once a publisher can deliver a large file to a verified account and take payment, the box, the disc, the distributor and the retailer all become optional. Valve opened the store to outside publishers within a few years and later to almost anyone, and the resulting catalogue grew to a size no physical shop could hold. Discount sales, user reviews and community features gradually turned the store into a destination in its own right.

The arrangement had a cost that took longer to become visible. A purchase on the service is a license tied to an account rather than an object on a shelf, and the company that runs the account controls access to everything bought through it. Valve's dominance also gave one private company enormous influence over which computer games get seen and what share of each sale a developer keeps, a position that has drawn regulatory and legal attention.

The world at the time

In 2003 a computer game was a disc in a box, sold by a specialist retailer or a general chain that allotted it a few feet of floor space. Downloads of that size were painful on most connections, and publishers regarded the internet mainly as a support channel. Broadband was spreading fast enough to change that assumption.

What it changed

Console makers built their own download stores on the same logic. Independent studios gained a route to buyers that did not require a publisher, which underpinned the independent boom of the following decade. Physical computer game retail largely disappeared, and questions about ownership, resale and what happens when a service shuts down became permanent features of the conversation.