SAE Institute Belgrade
Comparative Discussion Paper
Humble Bundle VS Steam: The Cultural and Economic Aspects
CMN4200-0916Y1
Simona Milos
Belgrade, 2016
!1 Table of Contents
1. Introduction
2. The Video Game Distributors
2.2. Humble Bundle
2.3. Steam
3. Conclusion
!2 1. Introduction
This essay will perform a comparison of two major digital game distributors - Humble Bundle and Steam. We will examine their cultural and economical impact through a variety of social topics that are often connected with the gaming industry - ecological and economical issues that arise with the switch from physical to digital distribution, charitable causes, education and user experience.
Thinking of video games, most of us associate them with ridiculous pastimes such as flinging angry birds at pigs or seemingly endlessly tapping away on cell phones for no apparent good reason. However, recently the public opinion has started to acknowledge the potential within games for engaging social issues. A variety of educational games have proven efficient to communicate scientific facts and social questions of interest to the contemporary world. Such is the example of Foldit gamers working out the protein structure that helps viruses like HIV reproduce. (Michael J. Coren, 2016) Even large corporations increasingly adopt this ‘games with purpose’ model. (Stevens, 2016)
The ecological prospect of the gaming industry seemed to ameliorate with the emergence of digital gaming as there were no discs, no waste and no driving involved. However, as games became heavier and heavier in Gb, the difference in ecological impact fades away due to large power supply needs of massive gaming and distributing servers. One game contributes up to 30 kilograms of CO2 in the atmosphere. (Mayers et al., 2014)
According to PwC's yearly Global Entertainment and Media Outlook forecast 2016-2020, the total game market is predicted to grow to USD20.28bn by the year 2020. "There are a number of reasons for this relatively low growth. The largest component is physical console games sell-through revenue, which was already in decline in 2015, and that decline is accelerating as viable subscription and digital offerings become more compelling... revenues declined from US$7.60bn in 2015 to US$6.23bn in 2020". Digital game sales, however, are growing in a rapid pace - from 2bn to 3.6bn dollars in console digital games and from 3.53bn to 4.78bn in PC games. They predict that physical game sale will not disappear, as the core group of PC gamers continues to prefer physical to digital editions. (GamesIndustry.biz, 2016)
!3 2. The Video Game Distributors 2.1. Humble Bundle
Humble Bundle is a digital storefront that combines video game sales with fundraising for charitable causes. Though it is incomparably smaller than Steam, it does manage to collect hefty sums for charities such as the Red Cross, Child's Play and Electronic Frontier Foundation. The games are sold individually or in bundles at a price determined by the purchaser (but there are often minimal limits to how much one can offer). Initially, Humble Bundle featured mostly indie games with multi- platform support, but due to their incredible success have expanded and included games from renowned developers, AAA games, games for Android and bundles of various content such as music, books and comics.
The idea for such a venture came when, viewing sales of bundle packages on the Steam platform, Jeff Rosen ('Wolfire Games') noted that such bundle sales would have a wide viral reach across the online community, so he organised to form a bundle of indie games containing: 'World of Goo', 'Gish', 'Lugaru', 'Aquaria', and 'Penumbra Overtur'. "Everyone in the promotion is 100 percent independent, and we are all buddies, so it only took a few emails to organise the whole thing", Rosen stated, (Thompson, 2016) implying a strong sense of community and support between indie game developers, adding that "there are a lot of indie forums, and mailing lists, so most indies have really easy access to each other." (Thompson, 2016) Humble Bundle was praised by most gaming platforms such as 'Ars Technica' and 'PCGames' (Francis, 2016) for their success at alleviating socially relevant issues through video game sales.
Humble Bundle has contributed to their causes with USD50m by 2014, surpassing expectations from even the largest charities they raised funds for, such as the Red Cross and Doctors Without Borders. "Charities often are very surprised by the amount of money sent their way by our community,” John Graham, the co-founder and COO of Humble Bundle said. “Even the larger charities like the Red Cross are amazed once the payment arrives. It has often been the case that we exceed charity expectations and they've had the good problem of figuring out how to scale up the work they do." (MCV UK, 2016) "We owe our thanks to the generosity of the Humble Bundle community -- to the content creators who entrust us with their works of art and to the consumers -- for making this possible." (GamesIndustry.biz, 2016)
The Humble Store was opened in 2013 where single games, as well as various other content like music and ebooks can be purchased on daily sales instead of bundles.
!4 10% of the revenue goes to charities. They have thus far contributed USD5.4m to charity. (Humble Bundle, 2016)
The charities Humble Bundle supports a wide selection of 35 000 different charities, out of which five are featured: 'Charity: Water', that has a mission to make water available where there is no access to drinking water, 'The Red Cross', 'The Wikimedia Foundation', that fights for equal and free access to education and data via the Internet for all, 'Child's Play', who try to bring video games into children's hospitals in an effort to lift children's spirits and to shed the demonisation of video games, and 'Games Aid'.
Humble Bundle's inspirational business model serves as a reminder to all that it is possible to combine 'dulce et utile' and to make a difference in our day and age.
2.2. Steam
Steam is the world's largest digital gaming platform, developed by Valve in 2003 Windows operating systems, later also adding support for OS X and Linux. (PCMAG, 2016) Steam paved the way of the gaming community ever since by supporting indie games developers, adding in-game social features and digital rights management (DRM). Today it is celebrated by ten million gamers at a time, and a mind-blowing record 13,242,687 users at its peak this year, who play online video games such as (most popularly) DOTA 2, Counter Strike: Global Offensive and Grand Theft Auto V. (Store.steampowered.com, 2016) These numbers continue to grow steadily from month to month within a world-wide fan base of over 125 million subscribers (2014). (VG247.com, 2016)
The idea to develop this gaming platform came to Valve when it was brought to their attention that online games, of which Counter-Strike was most popular at the time, take a long time to patch. This led to displeased gamers being disconnected from their favourite form of entertainment for hours, or in some cases even days. Other various factors were taken into account. Such was the game development crisis that began in the nineties as the industry was drying up because of high retailer fees and high shelf prices, and consequently the expansion of piracy. Such was the case in developing countries in Eastern and Southern Europe where third parties (Internet cafés) were profiting illegally by using pirated versions of Valve's games and connecting them in internal networks to create a fight-club-like underground gaming scene.
Valve created Steam: "...a platform that would update games automatically and implement stronger anti-piracy and anti-cheat measures". Once game purchase has been completed the users can get game patches and updates automatically, meaning that game servers do not fall for extended periods of time, also, users are provided with a rollback mechanism in case that the patch or update needs to be pulled back (in contrast to before Steam, when the user would have to re-install the entire game) and
!5 even install and save games on a cloud server in order to play on multiple computers once they've downloaded or purchased them. With Steam, gamers can conveniently communicate via extensive forums, which contain many useful gaming tips and information, friend lists and groups, chat, and in-game team-speak (meaning they do not have to shift between the game and a communication media such as Skype). Steam has exquisitely good servers that allow very fast downloads and an extensive choice of various games, from AAA to indie to classics. (Store.steampowered.com, 2016) In some cases the gamers get to beta test new game versions. (‘Steam (software)’, 2016) All of the stated leads to a fairly pleased worldwide gaming community.
Though Valve doesn't disclose any sales figures, and no game developers may do so due to non-disclosure agreements, there are approximate estimations to Steam's share in digital game distribution and gross share in gaming distribution. Estimations from 2009 state: "Our estimation is that Steam - as the current market leader - enjoys approximately 70 percent of the overall digital distribution market with Impulse at 10 percent and all others combined at 20 percent in terms of actual dollars generated per month". (Graft, 2016) 'Stream spy' analytics platform estimates USD3.5bn spent on Steam games in 2015, (Wawro, 2016) the best-selling titles from this year being 'Rockstar's Grand Theft Auto V' at circa 3.6 million activated copies, followed by 'Fallout 4' at circa 2.5 million copies and 'Evolved' at 2.1 million copies activated. (Wawro, 2016) Unlike Humble Bundle and despite its huge financial success, Steam does not give their profits over to charity nor does it implicate itself in social issues.
Games on Steam are sold at a price chosen by the developer. This price turns out to be far more affordable than any physical copy as Steam is the only one to take a share of the profits for server maintenance and interventions, unlike in physical sales, where in most cases there will be costly fees for retailers, multiple distributors, transport costs and the costs of making the physical copies themselves. To protect the interests of the gamers, there is a refund policy with no questions asked for any game that was played for less than two hours and owned for less than two weeks, and other refund possibilities that depend on circumstances. (Store.steampowered.com, 2016) The Steam Community feature allows for character mods and customisation creation and trade, which even allows devoted gamers to make profit by creating new, fan content. (Steamcommunity.com, 2016) At the same time, Steam protects the developers' copyrights, as the content is located on centralised servers, which makes piracy, illegal use and cheating practically impossible. This is not the case with physical copies on CDs and DVDs, as even the most advanced copyright protection mechanisms are fairly easy to by-pass by creating cracked versions and using keygen software. (PCMAG, 2016)
Since the online gaming industry does not produce such enormous amounts of waste as the physical copies, one would think that Steam's pioneering shift towards cloud saving and centralised server system would contribute to the World's ecological struggle. As broadband subscriber numbers rise towards one billion and the modern world strives towards a completely on-demand online market, the power consuming
!6 needs for such enormous servers grow exponentially. Organisations such as Greenpeace warn the wasteful Internet corporations of harmful effects of what is referred to as the 'dirty cloud' - the servers that do not switch to more sustainable, greener, renewable sources of energy, stating that "It's not inherently green to download". Gaming platforms such as Steam have so far avoided tackling this issue. (the Guardian, 2016) However, there is a choice of eco-system simulation games such as 'Tyto Ecology' and 'Spore', for those who concern themselves in both gaming and ecology.
Steam features a wide variety of educational games (Store.steampowered.com, 2016), amongst which the most popular is 'Kerbal Space', a space simulation where the goal is to build a space vehicle out of given parts with each their own specific purpose. Part of this game was even developed in collaboration with NASA. The game itself is benignly humorous and interesting, proving that rocket science can be fun. (Program, 2016)
Steam is surely the pioneer of online gaming, a strong market leader of digital games distribution. Their innovation in the field of gaming was a game-changer for the entire gaming industry, steadily pushing out competition in both the digital and physical market. Surely, one would think that this huge gaming corporation doesn't compare with the noble causes of Humble Bundle. After all, Steam does nothing to give back to society. However, I would like to state that Steam did conceptualise the entire digital game distribution as we know it today. They are a profitable company, but in Steam's defence, they are not making anything worse. Steam shows great care for their users and great care for the developers. The gaming community Steam has single-handedly built up connects like-minded people from all around the globe. Furthermore, if it weren't for Steam's revolutionary appearance, there would hardly be a Humble Bundle, or indie gaming scene for that matter. In addition, developers who earn their wages through Steam, such as Cliff Harris of 'Positech Games' have reported giving large donations to charity. He donated all sales revenue from 'Democracy 3' sales to the charity 'War Child'.
3. Conclusion Though the examined platforms - Steam and Humble Bundle - are different in most aspects (such as size, business model and revenue) their respective impacts are enormous to our social and economical situation. Humble Bundle proactively supports charities and is openly socially active, while Steam represents the entire core of the online gaming system, without which we wouldn't be able to discuss, for example the different ecological impacts of physical copies and digital copies, as there would be none. Educational prospects of video games wouldn't have been explored if there were no platform to model how video games can be shared online conveniently and quickly. The indie game geeks that profited so based on Humble Bundle's amazing viral reach would surely be out of their jobs if there weren't for Steam's strong presence in the online community. After all, it is not an easy task to keep such a large capitalist machine greased up and running.
!7 Reference List
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Michael J. Coren, F. (2016). Foldit Gamers Solve Riddle of HIV Enzyme within 3 Weeks. [online] Scientific American. Available at: https:// www.scientificamerican.com/article/foldit-gamers-solve-riddle/ [Accessed 20 Nov. 2016].
PCMAG. (2016). Valve Changes Online Gaming Rules. [online] Available at: http:// www.pcmag.com/article2/0,2817,41291,00.asp [Accessed 23 Nov. 2016].
VG247.com. (2016). Steam has over 125 million active users, 8.9M concurrent peak. [online] Available at: https://www.vg247.com/2015/02/24/steam-has-over-125- million-active-users-8-9m-concurrent-peak/ [Accessed 20 Nov. 2016].
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!8 Graft, K. (2016). Stardock Reveals Impulse, Steam Market Share Estimates. [online] Gamasutra.com. Available at: http://www.gamasutra.com/php-bin/news_index.php? story=26158 [Accessed 20 Nov. 2016].
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Thompson, M. (2016). Humble Bundle: greatest sale of indie games ever?. [online] Ars Technica. Available at: http://arstechnica.com/gaming/2010/05/the-greatest-indie- game-sale-ever-and-how-it-came-to-be/ [Accessed 20 Nov. 2016].
Francis, T. (2016). The Humble Bundle guys - PC Gamer's community heroes of the year. [online] pcgamer. Available at: http://www.pcgamer.com/the-humble-bundle- guys-pc-gamers-community-heroes-of-the-year/ [Accessed 20 Nov. 2016].
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MCV UK. (2016). Humble Bundle raises $50m for charity, developers gross $100m. [online] Available at: http://www.mcvuk.com/news/read/humble-bundle-raises-50m- for-charity-developers-gross-100m/0143027 [Accessed 20 Nov. 2016].
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