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GamersGate: "We're not afraid of Steam"

Download service sees 72% revenue boost, thinks Valve is "peaking"

Theo Bergquist, CEO of digital download service GamersGate has told press that his company doesn't fear market leader Steam, instead believing that Valve's service has reached peak numbers and can only lose market share from now on.

Talking to Industry Gamers, Bergquist was bullish about the two companies' relative future prospects, buoyed by strong figures form the Christmas period which saw GamersGate's sales rise by 72 per cent.

"To be honest, we're not afraid of Steam. We think they are peaking now while the market is still very hardcore. In fact, we know from the feedback we receive from customers, one of the reasons we have such great growth is because many gamers out there don't like Steam and see Gamersgate as a better alternative," said Bergquist.

"Once digital sales are superior to physical sales, we believe Steam will have a harder time remaining #1," the CEO continued. "We don't have any market breakdown of the overall numbers. Some people say Steam has 50 per cent of the market, some say 80 per cent, but we don't know.

"What we do know is that Steam's marketshare will shrink in the future and that GamersGate is well positioned as one of the digital distrubution platforms that has strong momentum to gain marketshare."

Bergquist also believes that 2011 could well be the year in which the much talked-about tipping point from physical to digital sales could finally transpire, accelerated by customer preference and simple economics.

"You should never underestimate the importance of the physical store," Bergquist said. "At the same time, the market is moving faster now. Some of our partners tell us that in only a year their revenues from digital downloads have moved from 10-20 per cent of their revenue to over 50-80 per cent.

"I think 2011 will be a tipping point for digital downloads in which they should really take off. Digital distribution is no longer a business development project for publishers; it's an integral part of the sales organization. They look at the greater revenue split they can get from digital as compared to physical, and it's easy math to decide that they should focus on digital."

At the end of last year, Gamersgate began rolling out a planned swathe of European language sites to broaden its audience. The company's catalogue currently includes over 2500 titles.