Steam Is 70% of PC Digital Distribution Market

Stardock chief Brad Wardell says that his company’s Impulse service is second place in the digital distribution business, but it’s a distant second – Valve’s Steam platform makes up a whopping 70% of the market.

There’s probably a saying somewhere about how having the humility to admit defeat is a noble thing indeed. And while Brad Wardell – CEO of Sins of a Solar Empire and Demigod developer Stardock – isn’t exactly admitting defeat by saying that Stardock’s own Impulse digital distribution network is second place, it takes a certain kind of grace to admit just how badly Steam is beating off his pants.

“Our estimation is that Steam – as the current market leader – enjoys approximately 70 percent of the overall digital distribution market with Impulse at 10 percent and all others combined at 20 percent in terms of actual dollars generated per month,” wrote Wardell in the annual Stardock consumer report.

“Steam and Impulse both have the advantage of exclusive content (Left 4 Dead, Half-Life, Sins of a Solar Empire, Demigod, etc.),” Wardell added, saying that he expected digital distribution to make up about 25% of total revenue for an average PC title.

Wardell briefly discussed the difficulties of running a service in direct competition with Valve’s juggernaut platform, specifically addressing Valve’s success in licensing Steamworks to other publishers and developers as DRM.

“Once a game requires Steamworks, it is effectively cut off from us, which limits our content. Examples of this include THQ’s Dawn of War II, Sega’s Empire: Total War, and more recently Activision’s Call of Duty 4: Modern Warfare 2 … The problem is that it is not practical for us to install a game that in turn requires the installation of a competitor’s store and platform in order to play it.” This outlook is reflected in his company’s refusal to offer MewTwo on Impulse (a stance that is shared by other digital distribution networks such as Direct2Drive).

While I’m certainly not buying into the Randy Pitchford school of Steam-bashing, I think it’s important that even the most ardent Valve fanboy recognize that despite Steam’s dominance, having competition like Stardock’s Impulse is a good thing. A total monopoly on digital distribution would mean that A.) the service could charge whatever its operators felt like and B.) the operators would have little reason to improve.

So thanks, Brad Wardell and Impulse. You may be getting sand kicked in your face like someone in dire need of Charles Atlas’ bodybuilding, but I’m glad you’re here.