OnLive/Steam Founders Slam Each Other

Forbes recently published an article highlighting Valve co-founder Gabe Newell and the overall success of Steam. The three-page story covered all the aspects, from the launch of Half-Life and Valve Software to Newell's double cornea transplants to Steam's current worth as an online digital distribution platform.

However the article also incorporated a few jabs from rivals like OnLive and Gaikai. David Perry, chief executive of the latter company, called Steam the "iTunes of the game industry." Perry warned that the service could easily follow Apple's footsteps and become a monopoly in the digital gaming sector.

This isn't the first time "monopoly" has been used to describe Valve's Steam platform. November 2010 brought reports that major retailers were threatening to ban Steam-integrated games from their shelves due to fears that Steam has a monopoly on the download market.

The fear is certainly understandable: a customer installs the game, installs Steam, and discovers other great digital titles that can be purchased, downloaded, and stored in the cloud without having to leave the house. This also keeps potential customers from purchasing the same digital games from distribution platforms offered by the major retailers.

"If we have a digital service, then I don't want to start selling a rival in-store," said one retailer executive.

Forbes even reports that Steam controls 50 to 70-percent of the $4 billion market for digital PC games. But one rival plans to take a chunk of that digital pie by reaching into 10 million homes by the end of the year and offering cloud-based gaming. To use the OnLive service, PC gamers won't need to buy expensive rigs or shell out $400 for one specific graphics card to play the latest titles. They can even purchase a $99 standalone OnLive "console" and hook it up straight to the TV, bypassing the PC altogether.

Gabe Newell seemingly recognized OnLive's achievements since its launch in July 2010, but said the distribution method is inefficient and expensive. OnLive Chief Executive Steve Perlman disagreed, indicating that the cost of streaming a game to customers averaged about 3 cents per gigabyte, similar to what Netflix shells out for streaming movies and TV content. He then said Valve's Steam was "limited to people who have a high-performance computer."

For some titles, that may be true. Magicka is a good example: while the game doesn't exactly require high-end PC's to run at a decent framerate, it's currently only compatible with Nvidia and AMD GPUs, leaving out gamers using Intel's integrated graphics. If the game ever lands on the OnLive service, hardware limitations would be eliminated. The big problem OnLive currently faces is its lack of content, offering around 40 titles including Unreal Tournament 3, Borderlands, and Metro 2033.

Currently Steam has around 30 million customers. The number of OnLive customers is unknown, but the service will be heading to tablets, smartphones and Internet-capable TVs soon.

  • fausto
    valve is a monopoly...but as long as the pricing isn't higher than retail and the service is good. who cares?
  • Prey
    You know what, good for Steam to catering to the PC gaming market. I'm sorry if we all don't want to play Sims3 or WOW. There are more games out there, and just cause you're suckin' hind tit doesn't justify bitching since you're weaker than your adversary. If you're using integrated graphics.. I don't think you're worrying too much about where to get the latest and greatest games.
  • tomasf
    ill stay with my steam account. they are just saying that because someine is better than the are and have an specific target. onlive is not for hardcore gamers.
  • giovanni86
    Steam is a great service, and On-Live won't be stealing any of there profits. I like what On-Live is doing but, theres a yes and a BIG fat No in my head. Give or take depends on the type of gamer. A poor gamer might take On-Live but a real gamer might not. Also what if ur friend is on Xbox does ur game on On-live connect with some of them, or PS3.. PC? I doubt it! So big No on On-live for me unless all my friends jump on as well, but i doubt they will.. The controller is a joke.
  • So if Steam is a monopoly that's bad but if OnLive or Gaikai (neither of whom can offer the resolution and response time of a local PC) become as big as Steam or bigger that's good? I love it when CEO's scream about monopoly and fairness when they are trying to become the very thing they are trying to destroy.
  • bv90andy
    i would not use OnLive as my main gaming device because the clarity is not good enough, you can't compare a compressed video stream with a normal pc game, which, even at the same resolution looks 10 times better.
  • -Fran-
    Funny thing is, Steam can't be a monopoly, because there's Games for Windows and the same dumb people making those statements are also digital games distribution services. So it's a blind shot at some lawyer buffet who can milk money out of Steam and make them less profitable so THEY get more people. Cheap tactics are cheap alright.

    Besides, like stated above, we can't actually tell if it is a monopoly, cause it doesn't look like one at first hand: lot's of offers, cheap/store priced games and friggin' sweet deals every F'ing week. If that's a monopoly, then they aren't so bad when in the right hands. Just like Monarchies and Dictatorships; sometimes, with the right people, they're actually good.

    Funny to say the least, really.

  • g00fysmiley
    i've been using steam since first release of Half-life 2

    been loving it ever since, some of their steam sale weekends and thier bundles make for some good cheap gaming on titles i wasn't willing to pay full price for... take bioskock.. seemed cool, borrowed it from a friend who bought it for xbox 360... when it went on steam sale for 15 bucks one day though i was like hey good game for 15 bucks i'll take it :D keep the deal liek that coming and i'll be thier customer for life :D
  • COLGeek
    Nothing like "friendly" competition!
  • hoofhearted
    onlive ... cloud ... NO THANKS!

    I'll stick with my Steam account

    meanwhile, I had beans, so time to make a gas cloud.