Micro-transactions are coming to Steam.

MARCH 21, 2010 • In a brochure detailing new features for its Steam service, Valve outlined support for micro-transaction in 2010. “Want to offer your customers a scabbard for their sword?  New tires?  The latest in night vision goggles?  Now you can through micro-transaction support in Steamworks.  Your item server can now be easily integrated with Steamworks so that Steam users can buy and instantly use the items they want – all without leaving the game.  Steam handles all of the billing through the user’s Steam account.”

Impact: Valve’s Steam has clearly been the leader at the digital distribution of full-packaged games.  However, the race for distributing virtual goods is still the wide open Wild West.  A major advantage Steam has is a large user base of high-end games that could make a perfect upsell for virtual goods.  Of course, there is talk about consumer resistance to paying a large upfront sum for a game and then having to buy items on top of that.  But, the reality is that type of griping has not stopped consumer spending in the past.  A game that provides constant entertainment for months or years at a time is clearly worthy of continued consumer spending.  If consumers don’t like it they can move on to another product.  We think that a microtransaction model will be an exciting way for developers to obtain significantly more revenue from their heaviest users.