20 Years of Steam: From Half-Life 2 to the Steam Deck

Few things are as closely associated with PC gaming as Steam. Microsoft might provide the operating system used by most gamers, and Nvidia and AMD power the most popular graphics cards. Intel and AMD fight over the CPU space. But for most people, Steam is PC gaming. To celebrate the platform's 20th anniversary this month, let's explore some of its defining moments over the past two decades.

A Small Start

Announced at GDC in March 2002, Valve moved Steam out of beta on September 12, 2003, not long after MySpace launched, unleashing what would become the largest gaming distribution platform and storefront for PC.

However, its evolution was a slow process. Initially, Steam was as a software client for Valve to automatically patch games like Counter-Strike, grant early access to content, and enhance anti-piracy and anti-cheat mechanisms.

Using Steam wasn't mandatory for Valve title owners – a wise decision given the initial resistance from many PC gamers opposed to the constant internet connection requirement. The service was plagued with bugs, and the thought of a world without physical discs, which eventually became a reality, unsettled many. Moreover, Steam's authentication servers frequently faltered.

Steam didn't gain much traction among those who weren't Counter-Strike enthusiasts. Only Valve's games were supported, with no option to purchase them directly through the platform. But the tide turned on November 16, 2004. The day Half-Life 2 was released.

Gordon's Alive!

It's impossible to overemphasize the importance that Half-Life 2 had on making Steam what it is today.

Forcing people to install, sign up, and activate a service just to play a game, even if you'd bought a physical copy, was unheard of in 2004. It also meant that buyers required an internet connection, though the single-player campaign was playable offline after this initial authentication.

Not surprisingly, the vast number of people trying to play what is still considered one of the best PC games of all time resulted in more server problems and people unable to log in. Any potential appeal Steam might have had was being severely dented, as illustrated by the many complaints aimed at the team, accompanied by warnings that the platform was detrimental to PC gaming.

However, Half-Life 2 rave reviews continued to attract new sign-ups. It's fair to say that many of today's long-term users of Valve's platform initially joined after purchasing the iconic FPS and have been building their libraries ever since.

The Arrival of Non-Valve Games

As amazing as Half-Life 2 proved, Steam's potential was hampered by only featuring Valve's creations. This changed in 2005 when Valve finalized agreements with third-party publishers, allowing them to market their games on Steam, transitioning the service into a bona fide digital marketplace.

Ragdoll Kung Fu and Darwinia were the first non-Valve games, paving the way for a system that would play a huge role in killing off the PC's physical disc drives.

Keep 'Em Coming

Games continued to be released at a relentless pace, supplemented by the likes of demos and even videos. 2007 saw the introduction of some of the features that are still on Steam today, such as search, top sellers, and new releases. It was also the year the Steam Community launched, bringing with it friends lists and community groups that helped make the service more than just a place for buying titles and keeping them updated.

By May 2007, 150 games were for sale, and 13 million user accounts had been created. It was also the same month ATI offered a free Steam copy of Half-Life 2: Lost Coast and Half-Life 2: Deathmatch to Radeon owners, while including the Steam client in the ATI Catalyst GPU driver.

The benefits of becoming a Steam member were increasing rapidly: new releases, sales events, Steam Cloud, "Under $5" and "Under $10" categories, Spotlight, and even Mac games. Another major step was the Steamworks software development kit that landed in May 2008, allowing anyone to integrate Steam into their game without Valve's direct involvement.

By 2010, the platform offered around 3,000 products. That year, Valve announced that 10 million of the 25 million active Steam users had registered with the Steam Community. A few years on, this burgeoning community warmly welcomed the Steam Workshop, facilitating the sharing of user-generated content and modifications.

Off to the Marketplace

In 2012, Valve introduced what has become one of Steam's defining features: the Steam Community Market, also known as the Steam Market. This trading platform lets users spend and make real money by trading items from supported games, such as trading cards, emotes, and profile wallpapers.

With the ability to speculate and invest, it shares similarities with a real stock market, all while Valve makes 5% from each sale.

From Green to Direct

Not everything in Steam's 20-year history has been a success. The Greenlight feature designed to streamline games being added to the service was launched in 2012. It let users vote which indie titles should get a full release on the service, but the rate of game approvals was low, and Valve CEO Gabe Newell later confessed he wasn't a fan.

In 2017, Steam Greenlight was replaced by Steam Direct. Rather than the games being voted onto the platform by users, devs pay Valve a fee and the company review them.

Valve is very lenient when it comes to what it allows on Steam Direct. Soon after a game called Active Shooter was pulled from the store, Valve announced the only content it would restrict was anything deemed to be illegal or "straight up trolling." That means there is an absolute ton of porn games, though Valve showed there was a limit when it banned sexual-assault game Rape Day in 2019.

The Steam Machine

In 2012, Valve introduced Big Picture Mode – a Steam interface designed for the living room holy trinity of big TVs, joypads, and couches. It was also the year that the company revealed it was working on a video game console, of sorts.

In September 2013, Steam OS based on Linux, the Steam Controller, and console-style PCs from various partners, called Steam Machines, were unveiled. The company said the mini computers were a "powerful new category of living room hardware."

Newell was so confident Steam Machines would be a success that when asked if he could beat the then 3 million Xbox One consoles that had been sold, Newell replied: "It's going to take a lot for them to catch up. We're at 65 million," referring to the number of Steam accounts.

Steam Machines were quickly consigned to the history books as one of Valve's greatest missteps. Valve liked to push the narrative that they offered the best of what a console and a PC have to offer, when in reality they weren't as satisfying as either. However, the machines and SteamOS paved the way for the successful Steam Deck a few years later.

Other Hardware

Valve's other hardware endeavors included in the Steam Link. Originally a small box that allowed the streaming of Steam content from a PC, or Steam Machine, wirelessly to another display on the same network, it was an excellent and cheap option for those who wanted to stream their PC games into another room – this writer loved theirs at the time. Valve discontinued the Link in 2018 in favor of a software-only version.

Valve has also been a staunch supporter of virtual reality. The arrival of the Oculus Rift and the HTC Vive, which were part of a collaboration with Valve, saw a VR category added to Steam in 2016.

In 2019, the company created the Valve Index, an in-house VR headset. The device's success has been helped by the inclusion of what most consider the best VR game ever: Half-Life: Alyx.

The PC Survey That Matters

It would be remiss not to mention another big feature of Steam, one that arrives every month: The Steam Hardware and Software survey.

While user participation is optional, it gives us a good idea of what gamers are packing in their machines – we've been covering it for years. These 2008 results containing the likes of ATI Radeon 9600 GPUs are an entertaining read. Interestingly, the CPU split between Intel and AMD 15 years ago is almost identical today.

Epic Games Store

While there are other PC gaming digital stores, none have come close to challenging Valve's service. That looked like it could change in December 2018 when Epic launched the Epic Games Store, aggressively pursuing gamers, developers and leveraging Fortnite's massive popularity.

Epic CEO Tim Sweeney had blasted Valve's 30/70 cut from every sale, noting that Epic would only take a 12% cut, making it a much better deal for publishers. The Epic Games Store also offered some massive PC exclusives (or timed exclusives) like The Division 2 and Metro Exodus, while also giving away games for free each week, including GTA V in 2020.

Valve responded by lowering its take for games that earned over a certain threshold. And while some of Epic's exclusives might have impacted Valve's bottom line, the latter company's position at the top was hardly threatened. Plus, Microsoft and EA both started selling games on Steam, which no doubt helped.

The Steam Deck

It's easy to forget that many people were skeptical about the Steam Deck. The disastrous Steam Machines, also powered by SteamOS, remained a ghost of Valve's past that it couldn't forget; there were already several handheld PCs on the market; and the Nintendo Switch looked unshakeable at the top of the tree.

Despite some delays and difficulties with the pre-order system, the Steam Deck has proved to be a success for Valve, hailed as the best way to play (most) PC games on the move.

It's led to a slew of competitors, from the Asus ROG Ally to the upcoming Lenovo Legion Go. Sadly, Valve recently confirmed that we won't be seeing a successor for at least a couple of more years.

The Future

There are over 30,000 games available on Steam today. The platform boasts over 120 million active monthly users, and this year it saw a new concurrent user record of 33.5 million.

It's hard to know where to go when you're on top, though Valve isn't one to stand still: more games, new UI features, and better seasonal sales might be the platform's bread and butter for keeping and attracting users, but we could see a few major new additions in the next era, including some form of Game Pass-style 'Steam Pass' subscription service.

So we'll say it again. Steam is PC gaming, and that's not going to change anytime soon.