"Of course, you must be on Steam. But Steam isn't the entire world": CEO of game distribution company says yes, some PC gamers prefer "local" stores to Valve's mega-shop, and China is a huge factor

Rokky CEO Vadim Andreev argues that while Steam is central to PC game distribution, significant growth markets like China, Eastern Europe, and Latin America strongly favor local platforms due to established trust, payment systems, and loyalty programs. Andreev notes the Chinese PC market is expanding at 15% annually, far exceeding the global 2% growth, emphasizing that publishers must leverage these non-Steam channels for comprehensive global revenue. This highlights a substantial, often overlooked, market opportunity and potential shifts in the competitive landscape for gaming sector investors.

Analysis

Rokky CEO Vadim Andreev highlights a significant market opportunity beyond Valve's Steam platform, particularly in high-growth emerging markets. He asserts that local platforms in regions like China, Eastern Europe, and Latin America demonstrate stronger trust, loyalty, and payment behavior among PC gamers, making them crucial for comprehensive global revenue. This challenges the conventional view of Steam's market dominance, especially for publishers seeking broader reach.

The Chinese PC gaming market is experiencing robust growth, expanding at approximately 15% annually, significantly outpacing the global PC market's 2% growth rate. This disparity underscores the strategic importance of engaging with local distribution channels, such as Rokky's owned ChinaPlay, to capitalize on these lucrative segments. Rokky facilitates this by offering distribution, marketing, and sales analysis for non-Steam ecosystems.

Andreev's firm also published a study where 72% of game developers identified Steam as a monopoly, suggesting a fragmented competitive landscape in certain geographies. This implies that a multi-platform distribution strategy, tailored to regional preferences in loyalty programs and payment systems, is becoming critical for maximizing global revenue and market penetration for gaming companies.

Key Decisions for Investors

• Evaluate gaming companies' strategies for non-Steam distribution, particularly their penetration into high-growth emerging markets like China.
• Monitor the performance and market share capture of local gaming platforms in specific geographies, as they present significant growth opportunities.
• Consider investment opportunities in companies facilitating or successfully leveraging alternative distribution channels beyond Steam, especially those with strong footholds in emerging markets.