For a real comparison steam is the distributor, storefront, advertiser, and support. A bit more than just 'a middleman'.

I would make the comparison to the monopolized railroad instead of selling shovels. There is Vanderbilt level moneys in setting up a transport network that only you control and rent seek from.

IDK, retail can be a tough business, just ask GOG and Epic.

It's a lot of work becoming the de facto standard, but once you've made it, the money just rolls in.

Your comment about guys selling shovels is in violation of my patent about commenting about shovels.

You'll need to pay me a license of $300 USD for every day this comment is left online.

And there's a lot of other guys selling shovels, too. It's not that anticompetitive when someone is selling better shovels than anyone else and also charging a premium for them. Anticompetitive would be having the best and undercutting everyone else on pricing in order to make sure no other sellers had a chance.

The customer is always right, in matters of taste.

They seem to use the extra money to try to create new product categories too. Failed with the steam machine and steam controller, but that laid the way for steam input so people didn't have to mess with potentially sketchy software anymore for non Xbox controllers. And explored VR and tried a different take on the Steam machine with the Steam Deck the next go around.

However, you rarely want to make the product customers ask for. If you asked customers what they wanted when Valve started, they would've said a better way to store CDs. Or for the iPhone, customers wanted a better physical keyboard (like BlackBerry), whereas Apple provided an on-screen keyboard to provide more screen real estate.

A good company should listen to what customers say, and then design products the customer didn't expect that solves the problem even better. But rarely should you build what the customers claim to want.

The customer knows the problems they have, they don't necessarily know what an effective solution looks like.

"Piracy is a service problem."

Customers always know they can resort to a hidden extra option. They choose not to because Steam makes it so easy and painless.

Streaming services are now going to learn that lesson the hard way.

build a product that people want and they’ll buy it.

Gabe knows better, they are a professional salesman. Nobody wants or wanted a third party launcher to launch their games, or borrowing them with DRMs, or getting all your personal information mined. With gimmicks such as releasing games that only work on steam or sales applied to products that never expire, they managed to build a monopoly and get so popular that steam self propel its need.

I feel like the people who think of steam as a small/indie company have that impression because it's not public and is shockingly uncontroversial for a company its size (at least in terms of revenue).

Valve also makes ridiculous buck from their games. Every VR user wants to play Alyx, and Dota 2 with Counter Strike 2 are two of the most popular multiplayer games without being complete shitshows (like Fortnite, Roblox and whatever the hell goes on on mobile phones). Not to mention an occasional instant classics like Portal 2.

IDK, I think the Microsoft comparison is fair. Yeah, Microsoft has a ton of software development, but they also have a massive software sales side, perhaps bigger than the development side. Like Microsoft, hardware and ads are a very small part of their business, and software sales is a large part.

Comparing to Walmart or a restaurant chain doesn't make sense since they have physical locations and a high headcount to support that physical network.

Maybe Sony or Nintendo would be a better comparison since both make a ton of money from selling games on their platforms.