00:00Hey everyone, welcome back to my channel. Today I want to dig into a story that's sparking a lot
00:05of discussion in the PC gaming industry. A recent survey says that 72% of game developers
00:11believe that Steam has a monopoly on PC game distribution. So what does that really mean?
00:18Is Steam truly a monopoly or is it just very dominant? And what are the implications for
00:23developers, for gamers, and for competition? Let's dive in. The figure comes from a white
00:31paper titled The State of PC Game Distribution, published by the digital distribution platform
00:37Roki, based on independent research by Atomic Research. The survey acts 306 executives in
00:45game studios across the US and the UK between May 18 and May 22, 2025. Of those, about 72%
00:53said they believe that Steam holds a monopoly in the PC games market. The survey also surfaced
01:01that a large proportion of those same developers say that Steam accounts for more than 75% of
01:07their PC game revenue. In terms of alternate platforms, about 48% of respondents say they
01:14had distributed games on the Epic Game Store or the Xbox PC Game Store, whereas 10% said they'd
01:20used GOG, Galaxy, and around 8% had used itch.io. Importantly, 80% of respondents said they expect to
01:30use multiple distribution channels and not just rely solely on Steam within the next five years.
01:37So what the data suggests is many developers feel reliant on Steam, many are getting the bulk of their PC
01:44revenue from Steam, and many feel that Steam's dominance is so great as to amount to a monopoly
01:50in their view. Let's look at the reasons why this claim seems plausible. First, market share dominance
01:56and network effects. Steam has been the dominant PC distribution channel for years. Reports suggest
02:03that Steam handles a very large proportion of PC game sales globally. That kind of dominance gives Steam
02:10enormous bargaining power and influence. Given that many developers are dependent on Steam, it gives Steam
02:16leverage in negotiations and setting terms and being the gate to success. Second, ecosystem locks it. Once a game
02:24is on Steam, players tend to stay in the Steam ecosystem, they buy multiple games on Steam, build a library, use Steam
02:32features like achievements, cloud saves, community hubs, and workshop mods. For a player choosing another platform, the
02:39incentive to go elsewhere may be weak because the Steam library is already large, the friends list is
02:45there, and so on. That means developers feel like they must be on Steam to reach an audience, else risk being
02:52ignored. Third, barriers for meaningful competition. While other stores exist, none have yet matched Steam's
02:59combination of user-based size, discoverability tools, community features, trust, and maturity. When alternatives
03:07attempt to compete, the network effects and the incumbency advantage makes it hard. So for many developers,
03:13Steam feels like the only practical game in town for serious PC distribution. Fourth, the survey's own data
03:21underscores why developers feel this way. Large revenue share from Steam, fewer developers using lesser
03:27platforms, strong expectation of relying on multiple platforms, and future, which itself is an acknowledgement of current
03:34risk. All that backs up the idea that from a developer's lived experience, Steam acts like a monopoly.
03:41However, the claim that Steam is a monopoly needs scrutiny. The legal and economic definition of monopoly is
03:48narrower than everyday speech. Analysts like Matt Piscitella argue that Steam does not meet all the
03:54criteria of a monopoly because there are alternative PC stores, distribution channels, direct-to-consumer sales
04:01outside Steam. The PC platform is open and you are not locked into Steam in the same way you might be on consoles.
04:10For instance, one prominent critique says, in other words, 72% don't know what monopoly is.
04:15That headline reflects the idea that the respondents may be using monopoly colloquially to mean dominant
04:22platform rather than the strict economic term. Another argument, a monopoly typically involves not just
04:29dominance but abuse of that dominance, like excluding competitors, charging excessive prices, and gauging
04:36in anti-competitive behavior. The public record does not strongly show that Steam is actively using
04:42exclusionary practices, although some argue it exerts soft pressure. For example, Steam doesn't require
04:48exclusivity. Developers often release elsewhere, and the PC platform still allows entirely independent
04:55distribution outside launchers. Additionally, the presence of smaller stores, direct sales,
05:01subscription services, bundles, etc. mean that the market is not literally single-seller, so some
05:07observers prefer to describe Steam's position as near monopoly or dominant platform rather than
05:14monopolistic gatekeeper in the strictest sense. Also, one must be careful about survey bias. The respondents
05:22were mostly larger companies, 77% from studios with more than 50 employees, and mostly C-suite level
05:29managers, as well as US and UK based. So the sample might skew towards firms who are highly dependent on
05:36Steam and less diversified, which could color the perception of how monopolistic Steam is in the broader
05:42global media ecosystem. Let's talk about some additional context that affects how we interpret this study
05:49and the monopoly question. First, discoverability and saturation. Even if Steam is dominant, one of the
05:56big problems developers face is not just distribution, but being seen. Thousands of games launch every year.
06:03The value of being on Steam isn't just you reach the entire audience, but also you have a chance to be
06:09visible within that audience. That alone drives a lot of concentration around Steam. The study notes the
06:15challenge of discoverability on PC and how many devs fear being lost in the noise. Second, economic dependence and
06:24risk. The more revenue a studio gets from Steam, the more vulnerable it is to change in Steam's terms, algorithms,
06:31store features, revenue shares, or policy. The survey suggests many devs recognize the risk and thus intend to
06:38diversify. That is a key part of the story. Steam's dominance isn't just about market share. It's about the risk of
06:45putting all your eggs in one basket. Third, global and regional markets. The PC gaming distribution
06:52landscape varies by region, platform, genre. While Steam has strong dominance in many markets,
06:59in some regions, local storefronts or non-Steam channels may matter more. The survey is US-UK skewed,
07:06so global nuance is missing. Fourth, business model dynamics. Competing stores such as Epic Game Store
07:14have attempted to carve market share via exclusive deals, lower revenue share, free games, etc.
07:21But despite those efforts, Steam continues to win in terms of user trust, library size, platform features,
07:28and ecosystem. That matters for developers making strategic distribution decisions.
07:34Fifth, technical ecosystem and platform features. Steam offers cloud saves, automatic patching,
07:40workshop mod support, community features, integrated achievements, friendless, Steam Deck compatibility,
07:47etc. For many developers and players, these features create significant value and make Steam the
07:54preferred platform. That preference translates into leverage for Steam. So, what are the practical
08:00takeaways for developers and for gamers? For developers, if you're launching a PC game, you need to
08:07seriously consider the role of Steam in your strategy. Because if the majority of players are on Steam,
08:12and many developers see 75% or more of their revenue coming there, ignoring Steam could mean severely
08:19limiting your reach. At the same time, being heavily dependent on Steam is a risk. Changes to Steam's
08:25algorithms, store placement, fee structure, or discoverability could impact your business. The study
08:31shows that 80% of developers plan to diversify, which signals the industry recognizes this risk.
08:38So, building a multi-channel distribution strategy, meaning Steam and at least one other alternate
08:43platform, plus direct sales, seems prudent. For gamers, the fact that Steam is so dominant means you get
08:51plenty of benefits. Huge catalogs, frequent sales, familiar UI, integrated community feature. But a dominant
08:58platform also means the risk of less competition, fewer incentives for radical innovation, fewer
09:05alternatives for consumers, less pressure on the platform to reduce fees or improve terms. If Steam
09:12truly has market power, there is a chance that developers may face higher costs or be locked into
09:18terms which could eventually affect game pricing or availability. So, diversification and distribution
09:24could benefit gamers too. For the industry at large, competition matters. A dynamic ecosystem with a few
09:32strong players but not one unassailable gatekeeper is healthier in the long term. The survey serves as
09:38a reminder that while Steam dominance is clear, many developers feel constrained by it. That signal could
09:44influence future regulation, partnership, store design, and developer behavior. Bringing everything
09:51together, the survey shows a strong sentiment among developers. The majority believe Steam operates
09:57like a monopoly. The data backs up that perception. Large revenue shares, high dependency, fewer
10:03meaningful alternatives. On the flip side, when you examine legal and economic definitions of monopoly,
10:10Steam doesn't check every box. There are competitors, the PC platform is open, and the market isn't
10:16strictly single seller. Therefore, my conclusion is that Steam could be described as a near monopoly or
10:23de facto dominant platform in PC game distribution rather than a textbook monopoly. It has enormous market
10:30power, developers feel constrained, and its dominance drives much of the industry's distribution behavior.
10:36But calling it a full monopoly suggests a level of lock-in, exclusion, or abuse that we don't fully have
10:42proof of, at least publicly. For developers, the takeaway is clear. Don't assume you can ignore the
10:49alternatives. Start building a diversified strategy. For gamers, while Steam is convenient and strong,
10:56keeping an eye on alternative platforms is healthy for long-term ecosystem health. For industry watchers,
11:02this survey is a warning that dominant platforms, even in open markets like PC games, can create dependency,
11:09risk, risk, and potential for imbalance.
11:12Thanks for watching. What do you think? Does Steam have monopoly power or is it just the best,
11:18most trusted platform? Are you a developer veteran or indie dev? How do you feel about your
11:23distribution options? Drop your thoughts in the comments below. If you enjoyed this video, hit like,
11:29subscribe, and ring that bell so you don't miss our next deep dive into PC gaming industry trends. Until next time, game on!
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