When Computer Gaming World reviewed Half-Life 2 in February 2005, its editor-in-chief, Jeff Green, loved the game and still took half a star off its score. The reason was Steam, the program Valve made every buyer install, which he called “an obtrusive, user-hostile abomination”. Eight months later he wrote that “the future of Steam looks very bright indeed”, and that it was only a matter of time before “downloading games online rather than buying them at a store” became the normal way to buy a game. He was right. By 2021 Valve counted 132 million people using Steam every month, and in March 2025 more than 40 million were logged in at the same moment.
Steam did not start as a shop. Valve built it to keep Counter-Strike up to date, and it grew, one step at a time, into the place where most PC games are sold.
Fast facts
- Made by: Valve.
- Announced: Game Developers Conference, March 2002.
- Out of testing: September 2003.
- First compulsory game: Half-Life 2 (November 2004), which needed Steam even when bought in a box.
- Other publishers’ games: from 2005.
- Open submissions: Steam Greenlight (2012), then Steam Direct (2017).
- Hardware: Steam Machines and Steam Controller (announced 2013), Steam Deck (2022).
- Scale: 132 million monthly users in 2021, by Valve’s figures; more than 40 million online at once in March 2025, as counted by SteamDB.
Built for Counter-Strike
Counter-Strike was free to anyone who owned Half-Life, and its popularity cost Valve money. Newell had “long complained that the success of Counter-Strike was actually costing Valve money in respect of support and servers”, Edge reported in 2005. Computer Gaming World later reported more than 100,000 people playing it at any moment, and every patch had to reach all of them.
Gabe Newell presented Steam at the Game Developers Conference in March 2002. Edge reported that players would be able to reach any game they had bought from any broadband-connected PC by logging into their account, that it included instant messaging for friends, and that Valve would license it to other developers through a software development kit. Partners included AT&T, the Australian telecoms company Telstra and the Korean publisher Nexon. The business case was plain: Newell reckoned that Valve would make about $30 on each game it sold direct, against $10 or less through its retail deal. A year later Ritual Entertainment told Computer Gaming World that its Counter-Strike: Condition Zero would use Steam to update the game continuously and “keep the code ahead of” cheaters.
Steam came out of testing in September 2003. At first it was optional. Then Valve made it the only way to get Counter-Strike updates, which Newell later counted as the first of two “painful periods”.
Half-Life 2
The second was Half-Life 2. Released in November 2004 on Valve’s new Source engine, it had to be activated through Steam, even from a shop-bought box, and many buyers spent launch day “waiting in a never-ending queue”. Computer Gaming World refused to review it at Valve’s offices and waited for the boxed game; its readers wrote in about “the one- to two-hour, five- or six-step install process”. The magazine’s staff gave Steam a mock award, Coaster of the Year, for 2004.
Newell admitted the problems. The two painful periods, he told the magazine in October 2005, were “one when it went from being optional to being obligatory for updates, and then the Half-Life 2 launch, when we couldn’t handle the capacity”. But he had no doubts about the idea: “It certainly turned out to be a great way to sell games.” The same issue graded Steam B+, “showing signs of improvement”. Steam also changed Valve’s relationship with its publisher, Vivendi Universal Games, and Valve took it to court over the right to supply its games to internet cafés; the Valve entry tells that story.
Other people’s games
In 2005 Steam began selling games that Valve had not made. Ritual was, in Computer Gaming World’s words, “the first developer to fully buy into Steam’s digital distribution technology”, with SiN Episodes: short instalments at $15 for about six hours each, sold only on Steam. The small games that arrived at the same time did better still. Introversion, a small British studio, had sold its strategy game Darwinia in shops and from its own website. “Then Steam came along,” Chris Delay told Edge in 2006. “Steam sold more in the first three weeks than we sold since the game launched, altogether, across shops, across the website.” He compared the terms with a retail deal, in which “the retailers take half of it, straight away”.
Mark Healey had written Rag Doll Kung Fu in his spare time while working as an artist at Lionhead. Its success on Steam gave him the confidence to leave and co-found Media Molecule, later the maker of LittleBigPlanet. “If it wasn’t for Steam,” he told Edge, “then Rag Doll wouldn’t have been as successful as it was, and if Rag Doll hadn’t been as successful, then I wouldn’t have had the confidence to come and do this.”
Steam still chose what it sold, though. Edge noted in 2011 that Positech’s Democracy 2 had been “turned down by Steam”, and it went on sale on Apple’s App Store instead (see indie games).
Friends, groups and sales
Steam became a place to meet as well as to buy. By 2007 it had Steam Community, where players formed groups, and Newell told Edge that he read every email players sent: one that morning had asked why “you can’t invite someone from the group admin tab in Steam Community”.
It also taught PC players to wait for a discount. By 2012 Edge‘s columnist Tadhg Kelly could name Steam sales, alongside second-hand games, as proof that the hardcore audience “likes bargains”. When Edge collected developers’ messages about the Steam Summer Sale in 2013, Matt Rix, the maker of Trainyard, wrote: “Ah yes, the Steam Summer Sale — where I attempt to buy a game because it’s on sale but then find out I already own it.”
Greenlight and Direct
In August 2012 Valve handed part of the choosing to its players. Steam Greenlight let developers post their games and let Steam users vote on which should be sold. It cost a one-off fee of $100. Not everyone found it fair. At the first BitSummit, a gathering of Japanese independent developers in Kyoto in March 2013, Edge explained that a Japanese game “must win over the English-speaking community before it can be sold on Steam”. “Greenlight is not very well suited to Japanese developers,” said Takumi Naramura, whose La-Mulana had just got through it.
Steam Direct replaced Greenlight in June 2017. Any developer could now put a game on Steam by paying a fee of $100 per game, with no vote.
The 30 per cent
For most of its life Steam kept 30 per cent of each sale, the figure Wireframe called in 2021 “the industry-standard 30%”. In late 2018 Valve changed the terms for its biggest sellers: from October 2018, its share fell to 25 per cent of a game’s revenue above $10 million and 20 per cent above $50 million. A few days later Epic Games opened its own store taking 12 per cent and began paying publishers to keep games off Steam for a time. Wireframe described Epic as “trying to muscle in on the digital storefront monopoly Valve enjoys with its Steam service”. Microsoft followed, cutting its own PC store’s share to 12 per cent in August 2021.
Valve also decides what Steam will not sell. In October 2021 Wireframe reported that Steam would no longer accept games “built on blockchain technology that issue or allow exchange of cryptocurrencies or NFTs”, because Valve does not allow items with real-world value on its platform.
The living room and Linux
At the end of September 2013 Valve announced three things at once: SteamOS, its own operating system built on Linux; Steam Machines, PCs from several makers designed to sit under a television; and the Steam Controller, which replaced a gamepad’s thumbsticks with two touchpads. Valve sent 300 prototype machines to testers on 15 December 2013. The obstacle was the library. Edge counted 468 Linux games on Steam against 8,012 for Windows, and found it “hard to imagine Linux gaming will take anything less than years” to catch up.
Valve’s answer, in August 2018, was Proton, a compatibility layer based on Wine that lets the Linux version of Steam run Windows games. Valve publishes Proton’s source code on GitHub, under a BSD-style licence for its own code, with the other components under their own licences.
Proton is what lets the Steam Deck, Valve’s handheld PC, play a Steam library built for Windows. The Deck runs SteamOS, and in Valve’s words, once you log in “your entire Steam Library shows up, just like any other PC”, with Proton making it “possible to run your games without any porting work needed from developers”. Before it shipped, Valve began rating games as Verified, Playable, Unsupported or Unknown on the Deck. The first units reached buyers in February 2022, and Wireframe reported that early owners loved having their library to hand, but complained about battery life during long sessions and the lack of curation of Deck-compatible games on the first day. In November 2025 Valve announced a new Steam Machine, a new Steam Controller and a virtual-reality headset, the Steam Frame (see Valve).
Sources
- Computer Gaming World issue 248, February 2005: Half-Life 2 review and the half star; readers’ letters on installation (see the Valve entry).
- Computer Gaming World issue 255, October 2005: Jeff Green’s editorial, “Still Steamed?” (p. 15; “an obtrusive, user-hostile abomination”, “the future of Steam looks very bright indeed”); the digital-distribution report card (Steam B+, “Coaster of the Year” for 2004); the Valve cover story and interview with Gabe Newell (“two painful periods”, “a great way to sell games”); Ritual and SiN Episodes.
- Computer Gaming World issue 226, May 2003, p. 67: Counter-Strike: Condition Zero preview (Steam updates).
- Computer Gaming World issue 234, January 2004, p. 47: the Half-Life 2 source-code theft (“Valve’s new content delivery system”).
- Edge issue 110, May 2002, p. 18: Steam at the Game Developers Conference (account access from any PC, instant messaging, the SDK, partners).
- Edge issue 144, January 2005: Steam and Counter-Strike’s costs; Newell’s $30 and $10 estimate (see the Valve entry).
- Edge issue 160, March 2006, p. 17: interview with Chris Delay of Introversion.
- Edge issue 168, November 2006, p. 13: interview with Mark Healey and Alex Evans of Media Molecule.
- Edge issue 181, November 2007, p. 67: Gabe Newell on player emails and Steam Community.
- Edge issue 246, November 2012, p. 134: Tadhg Kelly’s column (Steam sales); p. 26, a developer’s message on the “$100 Greenlight fee”.
- Edge issue 253, May 2013, pp. 14–15: BitSummit, Greenlight and Japanese developers (Takumi Naramura).
- Edge issue 257, September 2013, p. 24: developers on the Steam Summer Sale (Matt Rix).
- Edge issue 260, December 2013, p. 23: SteamOS, Steam Machines and Steam Controller (468 Linux and 8,012 Windows games).
- Edge issue 263, February 2014, p. 14: the 300 prototype Steam Machines sent to testers on 15 December 2013.
- Wireframe issue 51, May 2021, pp. 20–21: Epic’s court documents, “the digital storefront monopoly Valve enjoys”, “the industry-standard 30%”, Microsoft’s 12 per cent from August 2021.
- Wireframe issue 56, October 2021, p. 19: Steam’s ban on blockchain games; the Steam Deck compatibility ratings.
- Wireframe issue 61, March 2022, p. 20: the first Steam Deck units and early impressions.
- Valve, “Steam Deck: Software” and “Tech Specs”, steamdeck.com (web): SteamOS 3, the Steam library and Proton. https://www.steamdeck.com/en/software
- Computer Gaming World, December 2003: Counter-Strike’s player numbers (see the Counter-Strike entry).
- For Democracy 2, see the indie games entry and its citation of Edge, 2011.
- “20 Years of Steam: From Half-Life 2 to the Steam Deck”, TechSpot, 2023 (web, secondary): announcement in March 2002 and launch in September 2003. https://www.techspot.com/article/2742-steam-20-years/
- “Steam (service)”, Wikipedia (web, secondary): Greenlight’s launch in August 2012; Steam Direct replacing it on 13 June 2017 with a $100 fee; third-party games from 2005. https://en.wikipedia.org/wiki/Steam_(service)
- “Valve Adjusting Revenue Share For Steam’s Most Popular Games”, Game Informer, 30 November 2018 (web, secondary): the 25 and 20 per cent tiers from 1 October 2018. https://gameinformer.com/2018/11/30/valve-adjusting-revenue-share-for-steams-most-popular-games
- “Valve Rolls Out Wine-based ‘Proton’ For Running Windows Games On Linux”, Phoronix, 21 August 2018 (web, secondary). https://www.phoronix.com/news/Valve-Steam-Play-Proton-Linux
- Valve, Proton source repository, GitHub (web): LICENSE and LICENSE.proton. https://github.com/ValveSoftware/Proton
- Alex Forbes-Calvin, “Steam hits 132m monthly active players during 2021”, PC Games Insider, 10 March 2022 (web, secondary), reporting Valve’s 2021 Year in Review: 132 million monthly and 69 million daily active users. https://www.pcgamesinsider.biz/news/72901/steam-hits-132m-monthly-active-players-during-2021/
- Will Nelson, “Steam achieves a staggering new record of over 40 million active users”, PCGamesN, 2 March 2025 (web, secondary): 40,270,997 concurrent users, as recorded by SteamDB. https://www.pcgamesn.com/steam/40-million-users
- For the Steam Deck’s launch date and Valve’s 2025 hardware announcements, see the Valve entry and its citations.