Steam accepts bitcoin with BitPay

The Valve Corporation recently started accepting bitcoin payments on the digital distribution platform Steam. The service offers some of the world’s most popular video games, including Grand Theft Auto, Dota, Fallout, Team Fortress, and Counterstrike.

At any given time of the day, several million users are on the platform, the peak number of players logged in last weekend was just shy of 13 Million. More than 125 Million gamers had active accounts in 2015.

Steam’s popularity stems from its various features, such as the ability to synchronize game files across various platforms, as well as semi regular discount and sales bundles. The company also encourages game developers to offer access to games that are still in development, which makes the service an attractive avenue for game makers hoping to test out ideas or crowdfund new projects.

“Steam is our direct pipeline to customers. It began as a little sleeper project—a handy tool to update Counter-Strike—and morphed pretty quickly into the world’s largest online gaming platform.”
— – Valve Corporation

Founded in 1996, by former Microsoft employees, Valve started the service to simply patch and upgrade video games. As the market matured, and bandwidth increased, Steam was perfectly positioned to become the leading platform for computer games.

Steam has used the last decade convincing gamers to move from store-bought discs to their online only platform. Over 3,500 games can now be played through Steam, on PC, Mac, Linux, SteamOS, and in virtual reality via SteamVR. The platform is available in 237 countries and 21 different languages.

Three out of every four times a game is sold for a PC, it’s sold through the Steam platform. According to data from industry researcher PwC. PC game sales are expected to reach $29 billion by the end of 2016, compared with $28 billion in sales for the console market.

The platform has been rolling out bitcoin as a standard payment method option around the world, one country at a time. While the inclusion of Bitcoin as a payment method was added to Steam without an official statement, Valve recently announced a deal to expand the content on offer, through a partnership with Lionsgate studios.

The partnership will provide over 100 feature films to Steam customers, including movies from the Company’s blockbuster Hunger Games, Twilight, Saw and Divergent franchises. There are now around 200 titles available on the Steam website, for between US$1.99 and $4.99 per viewing, and more titles will be added as the partnership continues to expand.

Lionsgate studios had approximately 7 percent of studio market share in 2014, and reported revenue of US$2.4 billion for the fiscal year 2015. The studios added the option to buy movies for bitcoin on their website last October, coinciding with the release of the Bitcoin-centered movie Dope.

"Our acceptance of bitcoins at our online Company shop reflects our commitment to offer greater choice, convenience and accessibility to our next generation consumers."
— – Michael Burns, Lionsgate Vice Chairman

As part of the Hollywood furniture, Lionsgate owns and distributes a library of approximately 16,000 motion picture titles and television programs. The company leads the industry with its box-office-to-home-entertainment conversion rate, ~15% above that of the industry average in 2014.

Lionsgate’s many businesses include motion picture production and distribution, television programming and syndication, home entertainment, digital distribution, news channel platforms, video games and international film distribution and sales.

"Whether they pay in dollars, francs or bitcoins, people are spending more money to watch content across more distribution platforms than ever before, and our goal is to offer them greater choice in what they watch, where they watch it, how they watch it and how they pay for it.”
— –  Burns

A range of companies now accept the cryptographically secured currency for payment. Overstock, Amazon, and Target in the retail sector; CheapAir, Expedia and Virgin Galactic in the travel industry; The Pirate Bay and Mega.co.nz for software, to name a few.

Gaming giant Zynga became the first major gaming company to accept Bitcoin early in 2014. The cryptocurrency could be used to buy tokens for virtual goods on the web versions of FarmVille 2, CastleVille, ChefVille, CoasterVille, Hidden Chronicles, Hidden Shadows and CityVille.

The majority of companies that accept bitcoin use BitPay to process payments, including Steam. With offices in the US, Canada, Europe, and South America, Bitpay has raised over US$32 million from 17 investors, including Index Ventures, Founders Fund, and Sir Richard Branson.

News of Steam’s acceptance comes during a time of strong bullishness for bitcoin, with around US$20 in growth on the BNC.BLX between the announcement and press time.