Why Discord is the biggest threat Steam has faced in years

Research Manager Carter Rogers explains why Discord is a major threat to Steam

Steam is a fixture of PC gaming with a seemingly unassailable position. Some of the largest publishers in the business depend on the platform. However, more so now than ever before, Steam’s position is at risk.This is not due to a megahit game from a rival publisher, but instead a simple chat app, Discord. The more time gamers spend on Discord, the weaker Steam’s position becomes.

Discord is one of the hottest things in gaming this side of Fortnite Battle Royale. In May 2018, the platform hit 130M total users with 19M logging in every day. The app lets users chat with others (either through voice or text) and enter themed groups (e.g., for games or friend groups). Gamers have flocked to it because it offers a simple, efficient way to communicate and currently works across computers, mobile, and Xbox One.

While Discord is not yet as popular as other major PC gaming-related companies, young consumers are particularly fond of the platform.

 

Steam risks becoming less essential to the PC gaming experience if users end up spending their time outside of games hanging out on social platforms like Discord and Twitch. Previously, Steam was invaluable not only because of its storefront but because it facilitated social connections between players. In 2011, Electronic Arts got flak after breaking away from Steam to form its own storefront, Origin. At the time, players feared a slippery slope of multiple companies leaving Steam, resulting in the need to maintain friends lists across a wide range of platforms. Now, Discord is where gamers’ main friends lists live, not Steam.

As younger players enter the PC gaming market, the importance of gaming-related social platforms will grow. Currently, among US PC gamers who play multiplayer titles, 62% enjoy using games to hang out with friends. For young players 13-17, the share is 75%.

Discord’s rise also coincides with years of bad press for Steam’s parent company Valve. Fans of its classic franchises have grown impatient from a lack of new titles. In 2017, when Valve revealed their next game would be Artifact, a Dota card game, fans greeted the announcement with groans instead of cheers. Additionally, Valve has been criticized for everything from poor customer service to a hands-off approach to content moderation to item trading features that regulators say facilitated illegal online gambling.

With Steam less essential to the PC gaming ecosystem, AAA publishers will feel emboldened to go their own way and move their libraries to proprietary platforms. This fall, Activision Blizzard will bring Call of Duty: Black Ops 4 to its own Battle.net service and will avoid giving Steam a cut of revenue.

That’s not to say Valve is asleep at the wheel. It is in the process of launching a Discord-like Steam Chat app, but Discord users are unlikely to jump ship at this point. Steam will continue to be the premier storefront for indie and mid-tier studios without the resources to invest in making their own gaming platforms. However, its days as the main destination for AAA PC games may be numbered. AAA publishers will be less worried about player backlash from leaving Steam if they believe Discord will pick up the crossplay communication slack.