EA versus Valve: Who will blink first?

It was only a few years ago that analysts had proclaimed the death of the PC games market in a continuous orgy of crocodile tears. It must come as a shock to them to see what’s happening now: two of the biggest companies in gaming – EA and Valve – fighting over… scraps, right?

If anything is testament to the health of PC gaming, it is Electronic Arts’ surreptitious bid to rise above Valve as the market’s digital kingmaker.

Make no mistake: both groups are at war – locked in battle over a DLC policy dispute that neither will back down from.

This is not a typical industry clash. Neither side has issued a statement filled with the bravado you’d expect from a publisher at war. This is a dispute being fought away from the public, largely in silence, broken only by the removal of a high-profile game on Steam. First it was Crysis 2, later it will be Battlefield 3. Yesterday it Was Dragon Age 2. More will dissapear.

Occasionally, EA will break cover to claim that it is Valve who is removing these games. That’s honest enough, but the question of who’s to blame is thorny one.

What I have heard, and what both parties are edging ever closer to confirming, is that a disagreement on DLC policy is at the centre of the dispute.

EA wants to mix full games on Steam with DLC provided through its own services. EA wants to sell the downloadable content directly to avoid Valve taking its own royalty cut.

It’s a Trojan horse strategy. EA is one of many PC publishers that knows that Steam is not going to be usurped any time soon. Pending a galactic error on Valve’s part, the service will almost certainly remain first choice for PC customers for a long time.

So, sell a game through Steam, give Valve their double-digit royalty cut, and direct customers to your own shop of game add-ons.

While that may seem inoffensive enough, one suspects it’s the precedent that’s at the centre of the issue here.

Valve can’t allow other groups to sell add-ons to Steam games because, while DLC isn’t the most lucrative element of a triple-A game today, downloadable content and microtransactions are mushrooming in importance.

Games are increasingly becoming online based – a ‘service’ as Valve likes to say – and the digital market is moving to a point where the initial product is becoming less crucial as the goods you can sell on top.

Core games are entering the add-on age. Sony and Microsoft, who tend to be as nimble as supertankers carrying aircraft carriers, are now both working to include in-game add-ons to their product.

Commendably, EA has moved faster into the digital age than any of its competitors, and has demonstrated a immediate understanding of the value of add-ons. It appears that Valve taking a royalty cut from each transaction is intolerable to them too.

It leaves both companies embroiled in a game of brinkmanship. I’m not sure either will blink: both know that add-ons, DLC and microtransactions will help shape the future of gaming – both want their cut.