Steam (service)

Lore & Background

In the early 2000s, Valve sought a better way to update its multiplayer games, as downloadable patches caused users to disconnect for days. After being rejected by Microsoft, Yahoo!, and RealNetworks, Valve began developing its own platform in 2002 under the working names 'Grid' and 'Gazelle'. The platform was announced at the Game Developers Conference on March 22, 2002, with a beta that began later that year (first public beta in early 2003). Prior to Steam, Valve had a publishing contract with Sierra Studios; a 2001 version of the contract gave Valve rights to digital distribution. Valve sued Sierra's owner Vivendi Games in 2002 for breach of contract, and Sierra counter-sued, claiming Valve undermined the contract by offering a digital storefront.

Steam exited beta on September 12, 2003. In November 2004, Half-Life 2 became the first high-profile game offered digitally on Steam, requiring the client even for retail copies. This caused user problems and legal issues with Vivendi, who claimed physical copies it published could not be activated. In 2005, third-party titles like Rag Doll Kung Fu and Darwinia were released on Steam. In 2006, ATI offered free Steam copies of Half-Life 2: Lost Coast and Half-Life 2: Deathmatch to Radeon owners (a separate Catalyst driver integration came later). In November 2007, Nvidia announced a promotion offering a free copy of Portal: The First Slice to Nvidia hardware owners, bundled with drivers starting December 2007.

In 2011, some Electronic Arts games were removed from Steam due to terms preventing EA's own in-game storefront; these later launched on EA's Origin service. In 2019, Ubisoft stopped selling future games on Steam over revenue sharing, but returned in 2022 with Assassin's Creed Valhalla. In 2020, Electronic Arts began publishing selected games on Steam and offered EA Play on the platform. By 2014, annual game sales on Steam were estimated at $1.5 billion; by 2018, the service had over 90 million monthly active users and delivered 15 billion gigabytes of data.

Reader's Guide

Steam's significance lies in its transformation of PC game distribution and its enduring dominance. By providing automatic updates, cloud storage, social networking, and a virtual marketplace, it set a standard for digital storefronts. The Steamworks API, released in 2008, allowed any developer to integrate Steam's features, including digital rights management, without Valve's direct involvement. This opened the platform to thousands of third-party titles. Steam's success also spurred Valve's development of SteamOS, a Linux-based operating system, and the Proton emulator, enabling most Windows games to run on SteamOS without modification. These technologies underpinned the Steam Machines concept in 2015 and later the Steam Deck handheld in 2022 and a second Steam Machine iteration in 2026. Despite controversies over revenue sharing and DRM, Steam's market share—estimated at 75% in 2013—and its 132 million monthly active users by 2021 underscore its lasting impact on PC gaming.

Did You Know?

• Steam was originally developed under the working names 'Grid' and 'Gazelle'.
• Half-Life 2, released in November 2004, was the first high-profile game to require the Steam client even for retail copies.
• In 2011, some Electronic Arts games were removed from Steam because of terms preventing EA from having its own in-game storefront for downloadable content.
• By 2021, Steam had over 34,000 games and more than 132 million monthly active users.