EA versus Valve: It's All About the DLC

Electronic Arts (EA) has until lately sold many of their hit games through Valve's "Steam" digital game distribution system (as well as in retail stores). Suddenly EA have started pulling their games from Steam. EA are selling these games on their own internal digital distribution system called "Origin," as well as on other digital distributors -- just not Steam.

Valve professes to be terribly puzzled by this unpleasantness. EA grumbles that it's all Valve's fault but won't say why.

The latest: Today, Gabe Newell, head of Valve and its Steam money-printing machine, emerged from his den to say that he's a little puzzled by all this, but he hopes EA will realize that it can make more money keeping its games on Steam, and gosh, he sure hopes all this unpleasantness can get sorted out soon.

Newell is reported to have said:

"We really want to show there's a lot of value having EA titles on Steam. We want EA's games on Steam and we have to show them that's a smart thing to do. I think at the end of the day we're going to prove to Electronic Arts they have happier customers, a higher quality service, and will make more money if they have their titles on Steam. It's our duty to demonstrate that to them. We don't have a natural right to publish their games."

Everything I've read so far says that this slapfight is not about the Main Game at all. It's about the follow-on sales of "downloadable content," or DLC, which is gameplay that's added to a game after it's initially released for sale.

Based on comments from EA, it appears that Valve are insisting that if the Main Game is sold through Steam, then any/all DLC for that game also has to be available through Steam. For their part, EA apparently (again, this is just my reading of the public comments from all involved) feel it would be a bad idea to allow Valve to dictate to them any terms of how their (EA's) game content will be distributed, so they are taking their Main Game and going home (to Origin).

If that is an accurate reading, then Gabe Newell is being a little disingenuous. The things he's quoted here as saying are all perfectly sensible, but he's (deliberately?) not saying anything at all about the actual source of contention.

I'm not even suggesting Newell's position on DLC is wrong. I can see the possible point that it is necessary for a digital distributor to be able to to provide the DLC along with the patches for a game in order to properly support that game, and to insist on that as a matter of effective business practices. The problem I have is with the principals in this little drama not simply coming out and saying so, if that is in fact what's going on here.

What makes this rather fuzzier is that it makes sense for EA to stand up their own digital distribution system. Even without the comments made by EA during their investor calls to describe their "forward-looking" intentions for digital distribution as part of their overall five-year strategy, it's simply smart for EA to not only distribute its own games digitally but to try to elbow its way onto the playing field as a distributor for other peoples' games as well. EA is big, but Steam is getting big; EA can't afford not to get into that game. The only thing that's been holding them back has been retailers, with whom EA has maintained a happy monogamous relationship in public... until now. I guess somebody at EA finally decided Steam was getting too successful and pulled the trigger on Origin.

My free advice to EA and Valve: sort this before it snowballs and really starts costing you money.