A Majority of Game Developers Believe Steam Has A Monopoly on PC Game Distribution

A new whitepaper by Rokky, based on a survey of 306 game studio executives, reveals 72% believe Steam holds a monopoly in PC game distribution, though the report characterizes it as an "effective monopoly" given alternatives like Epic Games Store and Xbox PC, which 48% of respondents utilize. The study highlights developer hesitancy to leverage e-stores and marketplaces due to perceived gray market risks, arguing this misconception leads to missed revenue opportunities and that these platforms could offer viable diversification strategies despite ongoing challenges in discoverability and market saturation.

Analysis

A recent whitepaper by Rokky, based on a survey of 306 game studio executives, indicates that 72% perceive Steam as holding a monopoly in PC game distribution. However, the report, supported by Circana's Mat Piscatella, clarifies this as an "effective monopoly," acknowledging the existence of viable alternatives. Notably, 48% of surveyed developers already distribute games on platforms like the Epic Games Store and Xbox PC store.

The study highlights a significant developer hesitancy, with nearly a quarter viewing e-stores and marketplaces such as Humble and Fanatical as part of a "gray market," leading to concerns over control and revenue loss. Rokky's analysis counters this, suggesting such perceptions are misconceptions that cause developers to miss substantial revenue opportunities and potential diversification from Steam's dominance.

Despite the potential for alternative distribution, developers face ongoing challenges including discoverability issues, oversaturation of free-to-play titles, and the rise of subscription services. The report emphasizes that a firm, effective strategy in alternative distribution can unlock new audiences and increased revenues for developers and publishers willing to navigate these complexities.

Key Decisions for Investors

• Investors should monitor the evolving competitive landscape in PC game distribution, particularly the adoption rates of alternative platforms beyond Steam, as this indicates potential shifts in market share and revenue streams for publishers.
• Evaluate game publishers' and developers' strategies for diversifying distribution channels, including their engagement with e-stores and marketplaces, as this could signal resilience against perceived platform monopolies and unlock new revenue opportunities.
• Assess the impact of developer sentiment regarding "gray market" concerns on platform choices, as a shift in this perception could accelerate the growth of alternative distribution models and benefit companies facilitating these channels.