Valve and Steam – A Gamer’s Dream

Valve has recently had a dramatic increase in gamers, but will it last?

Background

Valve Corporation is the organization behind Steam, a videogaming platform released in 2003 that is now the distribution hub for many popular videogames. Steam, much like Apple’s App store, accepts applications that run primarily on desktop computers and, as of 2016, virtual reality devices as well.

As well as being the organization behind the development of Steam, Valve also creates and releases its own games. Among the most popular games created by Valve are Portal, Counter-Strike: Global Offensive (also known as “CS GO”), DOTA 2 (a game similar to League of Legends), and Half-Life.

Valve has also recently moved into the virtual reality space as well, developing its own high-end virtual reality device known as the Valve Index with superior graphics when compared to other top-notch devices such as the HTC Vive and Oculus Rift S.

 

What has changed?

With quarantines beginning across the world due to COVID-19, digital media has seen a rapid expansion of users. Videogames are included in this expansion, as people look for ways to entertain themselves while staying at home.

Videogames often are a great outlet since, like social media, they can provide some social community benefits as well. Both Counter-Strike and DOTA are multiplayer games that force you to be in teams of five, placing you with other players at a similar skill level in order to work with them to beat another team of five players. I play DOTA, and while much of the conversation in-game generally revolves around the game itself, it can be nice to hear others’ voices and interact with them. In DOTA, there’s time in-game before the game actually starts where people will occasionally comment on the particular situation, and jokes about how COVID is causing more people to play.

These jokes are supported by data right now as well. Steam recently set a record for the most concurrent players using Steam in a single 24 hour period, with over twenty million users participating. Of those twenty million, six million were actively playing games. (Steam has chat functionality as well, so it’s possible to be using Steam without necessarily playing a particular Steam game. Users may also have been downloading or updating content as well.)

 

How did Valve react?

Note that since Steam is primarily a game store for desktop games, not an online site, their primary concern is not necessarily how many users are using the Steam store, but how many people are using Steam to download and update new games, since it’s the downloading and updating of games that primarily uses up Steam’s bandwidth.

In order to counter the sudden surge in users, Steam has changed its default configuration for downloading and updating games, essentially “flattening the curve” for game downloads and updates so that they don’t occur as often, in order to lessen the load on their system.

In addition, the top competition for DOTA, known as The International, usually takes place over the summer. Teams from across the world take part in qualifying rounds before making it into the main event: a four-day tournament consisting of the best DOTA teams in the world, competing for a prize pool of over 30 million dollars.

However, due to concerns about COVID-19 and large group gatherings (as evidenced by the video above), Valve and the team behind the DOTA international have delayed the international, pushing it off until an estimated 2021.

This is a huge delay both for the teams of players that were gearing up to compete in the summer, but also for the companies that were planning to make money off of the large event.

 

The Future

While the peak of this growth is likely to be short-term, as COVID-based quarantines will (hopefully) eventually end, chances are that a large user-base will remain.

Anecdotally, I have a friend who had been looking into getting a virtual reality headset for a while, but hadn’t decided to make a purchase yet. Once the quarantine began, however, he decided he was going to certainly buy a headset. Since he was going for a top-notch gaming set-up that would last for a while and deliver on visual capability, he decided to go with the Valve Index. (I personally have the Oculus Quest due to its cheaper $400 price point and easier setup, despite its low graphics level.)

Many people seem to have been thinking similarly to my friend, as the Oculus Quest (with larger memory) sold out, with backorders set up for a month into March.

While video gamers are less likely to play games when they’re not stuck at home, these purchases of equipment are likely to lead to a much larger user base in the future. Since people now have the physical item, they’re also brought into the digital system in order to download and update games on their device. My guess is that people who may not have made the jump into virtual reality will now have devices and will use them more often, rather than leaving them off to the side.

As one person in class mentioned, one of the draws of buying an expensive workout system is that there’s an incentive to use it because it was such a large purchase. I believe a similar effect may take place with regards to virtual reality in the future; now that people have purchased headsets, they will be more likely to use them.

 

Summary

COVID-19 has lead to an increase in video game players. Steam has been setting records recently for high amounts of users, and virtual reality headsets have been sold out due to suddenly increased demand.

While videogame playing may die down in the future, it is likely that the physical devices behind virtual reality will provide a more stable increase to the number of users of virtual reality in the future, whereas PC gamers are more likely to simply stop playing as life returns back to something closer to what we would consider to be “normal”.

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2 thoughts on “Valve and Steam – A Gamer’s Dream

  1. Great article! That is an interesting point that the investment in a physical device like a VR headset could lead to a more sustainable increase in user base in a post-pandemic world. In terms of non-VR games it does seem likely that the surge is a temporary spike while people have more time on their hands and less access to other social activities (I know that has been the case for me anyway), but since games can be sticky it will be interesting to see if there are any particular games that maintain popularity and traction after social distancing restrictions are lifted.

  2. Great post and interesting insights! It’d interesting to see the how quickly the quality of virtual headsets improve and how strong would be the network effects on the same platform. If history of consoles repeats then, as noted in our Prof’s HBR article, a small incremental change by Oculus and just a few hit games on it would be enough to make customers switch VR headset. Additionally, I wonder what are your thoughts on expanding set of active gamers that could remain active even after the end of lockdowns – e.g. how many people might realize that CS:GO experience is actually more fulfilling and cheaper than Dave&Busters arcades?

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