Study says only 72% of game developers reckon that Steam has a monopoly on PC games, and even with some big caveats, it makes me wonder what the other 28% are thinking

A recent whitepaper, based on a survey of 306 game development executives, indicates that 72% believe Steam holds a monopoly in the PC games market, with a majority reporting over 75% of their revenue originates from Valve's platform. Despite this current reliance, 80% of respondents anticipate diversifying their distribution channels beyond Steam within the next five years, signaling a potential future shift in the PC gaming distribution landscape and increased competition for the dominant platform.

Analysis

Steam maintains significant dominance in the PC gaming market, with a recent whitepaper indicating 72% of surveyed game developers perceive it as a monopoly. This perception is reinforced by the fact that a majority of these developers report over 75% of their revenue originates from Valve's platform, highlighting substantial reliance on Steam for distribution.

Despite Steam's current market share, nearly half (48%) of respondents have utilized alternative platforms like the Epic Store or Xbox PC Games store (MSFT). More significantly, 80% of developers anticipate diversifying their distribution channels beyond Steam within the next five years, signaling a potential shift towards a more fragmented distribution landscape.

This developer sentiment for diversification, highlighted by the Rokky whitepaper, suggests a gradual erosion of Steam's market share is plausible over the medium term. While Steam's strong user base remains a competitive advantage, the increasing willingness of developers to explore alternatives could intensify competition, with overall market sentiment reflecting uncertainty regarding the pace and extent of this potential shift.

Key Decisions for Investors

• Monitor Steam's market share and developer engagement metrics for signs of erosion as 80% of developers plan diversification.
• Evaluate the competitive landscape, particularly the growth trajectory of alternative platforms like Epic Games Store and Microsoft's Xbox PC Games store (MSFT), which could gain market traction.
• Consider the potential for increased regulatory scrutiny or antitrust actions against dominant platforms given the strong developer perception of monopoly.