It was only about five years ago that Netflix started streaming video content via the Web, changing the way we watch movies and TV shows. They weren’t the first mover; Apple has offered video via iTunes store since 2005. But Netflix has found the most success, with 23 million streaming subscribers in the U.S.; a study last year claimed Netflix account for 32.7% of peak U.S. Internet traffic.
Keep in mind that Netflix continues to face a huge number of rivals - Apple, Xbox Live, PlayStation Network, Amazon and Hulu, among others. Meanwhile, some content producers, including Sony, have begun to mull cutting out the middleman to boost returns.
In the video game industry, there are parallels to this situation. Online game sales are expected to surpass retail sales by next year. Electronic Arts has said it expects to be “100% digital” in the “near future.” As is the case in video, there’s a leading player – in this case, Steam – with new competitors springing up. Some companies, including both Steam parent Valve Software and EA, are both creating content and distributing it to customers.
The parallel is difficult to miss. Steam, with its 40 million users (compared to rival EA’s Origin with 9.3 Million) is leading the PC game distribution site, making it an attractive partner for publishers who want access to that vast audience. But publishers are beginning to wonder whether they need to share their income with Steam.
At this year’s E3 conference, publishers were focused on finding digital distribution partners. Everybody was curious whether more platforms would be adding free-to-play titles, as well as which online storefronts were friendlier towards games with large downloadable content libraries.. There was also talk about Amazon starting to add indie games to its PC download catalog.
Just as a strong field of players emerged in the video streaming field following the success of Netflix, we’re seeing the same pattern in game distribution. Many companies hope to replicate Valve’s success. EA thinks it can surpass Steam, and be the Facebook to Steam’s MySpace.
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Excerpt image courtesy of Forbes.