The hat economy: Digital goods revenue grows as Valve expands tools for developers and community

Valve sees the future of gaming as a collaboration between developers and its community, and that vision is already producing results.

The Half-Life publisher, which operates the popular Steam digital-distribution platform for PC, Mac, and Linux games, expanded its developer and community tools for creating and selling virtual items recently. This will enable more companies and more outside creators to earn money on Steam, and we can already see evidence of that demand. In-game item sales make up $94 million of digital PC revenues, according to research firm SuperData. That is a majority of that market, and it is up 13 percent year-over-year. With more games going free-to-play — and even premium-priced titles looking for ways to maximize profits — this sector is only going to get bigger.

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“Valve launched the Steam Inventory Service beta and expanded the Steam Workshop last month,” said SuperData lead researcher and founder Joost van Dreunen. “Steam Inventory Service will help developers to create more virtual items that can be unlocked or purchased and then can be sold or traded in the Steam Marketplace [by gamers].”

These types of tradeable items are already extremely popular in games like Valve’s team shooter Team Fortress 2 or its multiplayer online arena battler Dota 2. Often in the form of hats, these digital goods can fetch high prices (occasionally in the hundreds of dollars) from players who desperately want a way to visually indicate how dedicated they are to a game. And with the new features, more developers will have access to this market.

Valve also expanded the Steam Workshop to support player-created digital goods for third-party games. This is a big move for a multitude of reasons, but it further cements Steam as the go-to platform for PC gamers, PC developers, and gaming communities.

The first non-Valve games to get this support are the medieval online-combat game Chivalry and the fast-paced strategy game Dungeon Defenders: Eternity.

“Since its 2011 debut, 1,500 Steam Workshop contributors have earned $57 million by selling virtual items for Valve titles like Dota 2 and Counter-Strike: Global Offensive,” said van Dreunen. “Moreover, MMOs like EverQuest Next, City of Heroes, and Star Trek Online have since adopted similar UGC tools and markets [outside of the Steam platform].”