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The advent of digital distribution has had a profound impact on the gaming industry, especially in PC gaming, through a shift pioneered and now dominated by Steam. This article examines Steam’s origins and how it stands out from its competitors. It sheds light on how Steam, during the course of time, has evolved as the market leader in the segment with the biggest market share. It also intends to explore whether the success of the platform can be attributed to it creating a “lock-in”, where customers find it difficult to leave because of how costly it would be.

Steam was first released by Valve corporation in September of 2003 as a background client to provide automated software patches and anti-cheat updates for its title games. Early versions of the software faced severe criticism over technical issues, and didn’t gain popularity until 2004, when Valve made installing Steam mandatory to play Half Life 2, one of the most anticipated titles of that time. Capitalizing on this newly acquired user base, Valve soon opened the platform to non-Valve titles in 2005, marking its transformation into a true digital marketplace and pioneering the industry’s permanent shift toward all-digital PC distribution.

But with Steam having grown to the digital marketplace it is today, what makes users continue to choose it over its rivals? Interestingly, Steam’s competitors try to distinguish themselves from it by carving out distinct value propositions. Epic Games charges developers a considerably smaller platform fee (12% against Steam’s 30%), and makes heavy investments in exclusive games and giveaways. GOG (Good Old Games) appeals to a niche community that prefers purchasing games without having to use a client or any form of Digital Rights Management. Publisher-owned launchers like EA App and Ubisoft Connect offer all-you-can-play library access through their respective monthly subscriptions.

But despite their attempts at chipping away Steam’s user base, they keep falling short. What really sets Steam apart from its rivals is the ecosystem that it has developed over the past twenty years; this includes the massive size of its library (over 117,000 titles), cloud saving, the Steam workshop (a centralized mod sharing hub), integrated social and progression systems, in-game economies, and compatibility with Steam’s own console, Steam Deck.

As more users join the network, the number of connections between them grows rapidly. This exponential growth increases Steam’s financial value and reinforces its market dominance, a classic economic network externality often described by Metcalfe’s Law. With 130 million users, Steam has far more users and developers than its competitors, giving it an edge over the others. Gamers attract developers, and developers attract even more gamers, making Steam the top choice for every developer. An ever-expanding community network, along with reviews, mods, guides, market items, and a marketplace for trading skins or card items, means that even newcomers get more value from the start.

As to whether Steam is a market leader or an example of market lock-in, the evidence suggests both possibilities. The platform holds approximately 74 to 75 percent of the PC digital distribution market and had generated $16.2 billion by November 2025, with a record $1.6 billion earned in December 2025. At the same time, Steam’s position is secured by the cost involved in leaving the platform; if a user has games in their library, friends listed and progress saved on Steam, then switching to another platform would mean having to give some of that up. It is this combination, more than any single advantage, that has kept Steam at the heart of PC gaming today.

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