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Steam China is partnership between Valve and Perfect World

Mike Futter

Steam China is partnership between Valve and Perfect World

More than a year after announcing its plans to fully enter the Chinese market, Valve is gearing up for full Steam release in China.

Mike Futter,Wed, 21 Aug 2019 18:11:00

Steam has existed in China since 2013, thanks to the international appeal of Dota 2. Now, it will do so in a way that conforms to that country’s strict content and licensing rules.

Valve and Perfect World have announced a partnership to create a segregated version of the Steam platform that will operate exclusively in China. It will launch with approximately 40 titles, only some of which have fully gone through the regulatory approval process. However, there’s a built-in audience ready and waiting for the new service to launch.

“[Steam] has amassed more than 40 million users in Mainland China alone,” Niko Partners senior analyst Daniel Ahmad told GameDaily via email. “We note that the international version of Steam currently operates in a grey area as Chinese law requires digital games to be approved by China’s gaming regulator before they can be distributed in the country, something that Steam does not currently abide by. This has helped drive the popularity of the platform somewhat as gamers in China are able to access titles that should theoretically not be available as they have not been approved / received a license from China’s gaming regulator. The addition of localised games, pricing and payment methods has also continued to drive growth of Steam in China.”

One game in the first slate announced for the platform is RageSquid’s downhill biking game, Descenders. Mike Rose, founder and director of Descenders publisher No More Robots, said that a larger portion of the game’s sales have come from China than the U.S.. 

“Over the last year, China has become the top-selling region for Descenders on Steam, outselling the number of units that come from even the U.S.,” Rose wrote. “Indeed, nearly 30% of Steam units sold for Descenders have come from Chinese players in this last 12 months, compared to 24% in the U.S.”

However, Descenders isn’t yet approved for release in China. GameDaily spoke with Rose via email to learn more about the process.

“Currently Descenders and other titles that were announced for the platform today, are either going through the approval process right now, or the devs are working with Perfect World to prepare their games for the approval process, removing anything from the titles that would get caught by the approval process,” Rose told us. 

“So, unfortunately, I'm not able to tell you how long it's going to take via the Steam China platform. What I can tell you, is that Perfect World and Valve have told us that they'll be essentially handling everything for us—we have to get the build into an appropriate state for approval, but after that, Valve has assured us that the vast majority of the approval process itself will be handled by themselves and Perfect World, which as you'd imagine is extremely nice for us, as it's apparently not the easiest process!”

According to Ahmad, the approval process can take quite a while and that some games already available on the international version of Steam may not have an easy time getting cleared for release.

“The process can take longer than 90 days and many games currently on the international version of Steam may have difficulty receiving a license due to certain elements within the game that are prohibited in Mainland China,” Ahmad said. “It will require developers to tailor their games to be inline with Chinese policies.”

One large question looms as Valve is about to launch a dedicated version of Steam in China: what happens to the international version in that territory? Ahmad posits that it may become unavailable once a fully legal version of the platform launches.”

“So far Perfect World is planning to launch around 40 titles, with licenses from China’s gaming regulator, on the Chinese version of Steam on day 1,” he said. “We note that this pales in comparison to the more than 2,000+ games on the international version of Steam with Chinese localisation currently. It’s unclear at this point whether the international version of Steam will be blocked in China once Steam China launches. We would expect Chinese gamers to use a VPN or other service to access these games if there is a block.”

In an interview with Eurogamer, Valve says it doesn't have any plans to make changes. The company wants to ensure that customers in China that have been using Steam don't lose content or saved games. However, the Chinese government may take action to prevent access to the Steam global version. 

Steam’s formal entry into China creates a legal foothold for Valve, while also creating a safe harbor that up-and-coming competitor Epic Games Store doesn’t have (yet). EGS is available in the same grey market manner that Steam has been for years, and may need to rely on Tencent (which owns 40% of the company) to help get on the right side of Chinese law. This shift may ultimately put a barrier between Epic and the Chinese Mainland, unless it takes steps to create a version of its storefront that is legal and compliant with that territories stringent rules. 


This story was updated August 21, 2019.