Your Next Game Buy Could Be from Battle.net
Battle.net could very well be the next big Steam.
Blizzard has been very successful in building Battle.Net as a closed gaming service and expanding its features to grow its audience. While Blizzard has always maintained a position that Battle.Net is different than Steam, the time may come for Blizzard to open up its service to other publishers. And it may have a good case that sounds very appealing to gamers: No DRM. Sort of.
Steam and Battle.Net are the two Goliaths of PC gaming networks, yet they could not be any more different. Steam has about 25 million subscribers, Battle.Net is rumored to be somewhere in the range of somewhere between 25 - 30 million. Steam dominates the online game retail market with an estimated share of about 75%, while Blizzard, the creator of Battle.Net, controls about 62% of the global MMORPG online subscription market – lead by an estimated 11.5 million World of Warcraft players (at the end of 2008.) Blizzard has not released official membership numbers for Battle.Net, but claims that Microsoft’s Xbox Live, which currently has about 23 million members, is “not even close.”
Compared to Steam’s model to provide game titles from a variety of publishers, the Battle.Net gaming service is limited to Blizzard titles. However, I wonder whether Battle.Net has a ginormous opportunity right mow that may be lost, if the company does not react soon. Can Battle.Net be the next, better Steam?
Battle.Net almost seems like a luxury at this time if it limits is network to its own titles. Granted, with 4600 employees, Blizzard has vastly more resources than Steam’s Valve with 225, but the user behavior economics have certainly changed since Battle.Net’s launch in 1997. The economics of scale also apply to these networks and both are trying to reach new users.
Steam has expanded to the Mac and Battle.Net, which has always had much more of a community appeal, said it will be integrating its service in Facebook, where Battle.Net gamers will be able to instantly connect with their friends and add friends to their Battle.Net friends list. StarCraft II will be the first game to feature Facebook integration. The new service due this summer will also feature Real ID, which will identify players in Battle.net by using real names on their friends list. This addition clearly caters to community building as it makes your friends readily accessible.
Attaching itself to Facebook may create a dependency for Battle.Net, but it may also be the single most important opportunity to attract interest and users for its products. And if you have such a user base, there is always the question how you can leverage it.
Breaking Down Barriers: DRM
Over the past 10 years, DRM, a rather euphemistic expression of approaches to prevent piracy in often rather inconvenient ways or the consumer, has been an interesting journey. DRM in the Internet age really took off with the rise and fall of Napster and ended up as trial and error what works and what not. In many areas we have seen content access restrictions come and go. It appears that gaming will be the next major battle ground.
Ubisoft has recently made waves with forcing gamers to always stay connected to the Internet to be able to play games, for example in Assassin's Creed 2 and Silent Hunter 5. Valve has a different, much software approach to prevent piracy on Steam: The company uses a system called Custom Executable Generation that "makes unique copies of games for each user allowing them to access the application on multiple machines without install limits and without having to install root kits on their PC."
Blizzard eliminates DRM entirely and simply requires a one-time activation of its titles. Star Craft II, for example, needs to be registered and activated once and gamers are subsequently able to begin a single-player campaign in offline mode. Both Blizzard and Valve are leading the industry in making gaming much more convenient again.
Blizzard has said before that it has no intentions in becoming the next Steam. However, back in 2009 the company said "we can only say so much right now, but the plans are much bigger, much grander... and have long-term positive implications for gamers," which referred to Battle.net that could be much more than just a free match-making service.
So, what could be much bigger? The value of this huge opportunity for Blizzard only goes so far. T some point, the company will have to make a decision whether it is opening up Battle.Net to other publishers as well. 30 million potential customers with the intent to play video games could be a convincing argument. Over time, as both services expand the differences between Steam and Battle.net may blur and it may be just a matter of time until Battle.Net will announce the first outside game customer. In the end, it may be just financials that decides such a move.
Steam has conquered the online game distribution market and leads with no apparent rival in sight. However, there is no doubt in my mind that Battle.Net is eyeing Steam as a possible expansion model and prepare itself for a real world battle. If there is a service strong enough that can challenge and out-resource Steam, it is Blizzard. At the very least we should be seeing lots of innovation in this field over the next few years.
For Valve, it seems that Steam is relatively secure at this time, but it also seems that its expansion into the Mac market has given others lots of ideas as well.
Wolfgang Gruener is a technology journalist and analyst. He was managing editor for the Tom’s Hardware news section from 2003 to 2005, before launching and acquiring TG Daily. Today, Wolfgang works with startups and publishes his thoughts and analysis on critical and emerging technologies and products at Conceivablytech.com.