Chat app Discord's new online PC gaming store has a secret weapon to beat giant rival Steam

  • Steam, the largest online video game site, adds thousands of titles each year.
  • Discord, a popular gamer communication service with 150 million users, has created a new PC gaming store, which leverages human curators to select a much smaller menu of gaming options.
  • While streaming-media giants Netflix, Spotify, Apple and others push out more content than ever, human curation offers a way for upstarts to appeal to an overwhelmed consumer base.
  • Microsoft is closely watching how gamers respond to this 'less is more' approach for the future of its Xbox business.

A new player in the video game sales business is betting that a smaller marketplace of curated titles will win, helping customers cut through the clutter of an overcrowded ecosystem.

Gamers play a game on the Xbox One console in the Microsoft Xbox booth during the Electronics Expo at the Los Angeles Convention Center.
Getty Images
Gamers play a game on the Xbox One console in the Microsoft Xbox booth during the Electronics Expo at the Los Angeles Convention Center.

Discord, a popular software service that lets 150 million gamers communicate through chat, text, audio and video, announced in August that its new online store will feature games picked by staff and eventually community input. The goal is to create "almost a local boutique bookstore experience that's highly curated," said Discord CMO Eros Resmini.

Founded in 2015, the company enters the digital distribution space as the video game industry continues to grow rapidly. Globally, gamers are expected to spend around $138 billion on games in 2018, up 13.3 percent from the previous year, according to Newzoo. The market research firm projects PC games will likely bring in around a quarter of that revenue.

Currently, Valve Corp.'s digital storefront Steam dominates the PC market for buying games with an enormous selection. Technology news website Ars Technica estimates approximately 23,000 games are currently available on the platform, and third-party tracking site Steam Spy reports that more than 6,000 games have been added in 2018 alone.

"It strikes me as being a lot like what YouTube and Facebook and other tech companies are dealing with, where there's an incredible amount of content and they don't know how to surface it to the right people," said Brendan Sinclair, an editor at GamesIndustry.biz. "The industry standard is to rely on algorithmic curation, but it's competitors looking to do new things that are trying to use human curation as almost a selling point."

The number of games published to Steam doesn't seem to be slowing, particularly as Valve announced in June that it would allow everything onto the store that was not "illegal, or straight up trolling." At the same time, Steam is actively adding ways users can tweak their experience to find games they want to play. A September blog post detailed new features that allow users to follow specific developers and publishers, as well as more comprehensively filter out content they don't to see. Steam also has long offered a community feature that allow users to follow external curators such as news outlets or YouTubers for recommendations, but almost anyone can become one of these curators.

The platform's low barriers to entry benefit smaller developers trying to get their games out to the wider community. However, content can easily get lost among the vast selection depending on how the algorithm surfaces results. "For a company like Steam, it's almost an impossible problem because there are too many worthy games being released to feature all of them appropriately," Sinclair said.

Discord's new game store is currently live as a beta version.
Discord
Discord's new game store is currently live as a beta version.

Microsoft is monitoring the content overload problem

With an alternative approach to the oversaturation problem, Discord has a chance of establishing itself as a significant player in the PC gaming market. Discord's digital storefront is already live as a beta version in Canada. The beta upgrades Discord's subscription service, which costs $4.99 a month and mainly offers customizations, as well. The service will now include a selection of approximately 100 games to download.

Microsoft also may be favoring the less-is-more approach with its subscription gaming service. Head of gaming Ben Decker recently alluded to a curation model for the Xbox Game Pass.

"When we launched it, we thought an ever-increasing number of titles might be something that was really important to gamers," Decker told Gamesindustry.biz in August. Instead, he said they found customers wanted a curated portfolio of around 100 quality games rather than a subscription with thousands.

The challenge of recommending content is occurring across media industries as companies of all sizes experiment with combinations of human and algorithmic curation.

Spotify did not offer its own curation for years until it acquired a small firm that was providing human-created playlists by activity in 2013, paving the way for popular music discovery features. The music streaming service now programs around 31 percent of listening through a mix of humans and algorithms — up from less than 20 percent two years ago, the company reported in February.

Apple worries about 'humanity being drained out' of art

Apple has long relied on human curators for its media products.

The company worries "about the humanity being drained out of music, about it becoming a bits-and-bytes kind of world instead of the art and craft," CEO Tim Cook told Fast Company in August. For the Apple News app, editors select stories from reliable sources. Google News, by contrast, aggregates all its content through computer algorithms.

Art-house video streaming service MUBI sets itself apart from the streaming giants by offering a handpicked selection of 30 films — often foreign and independent titles — at any given time.

"In order to survive in this business, you need a very clear differentiation to Netflixes and Amazons of this world," MUBI founder and CEO Efe Cakarel told Bloomberg last month.

Discord feels it now has a large enough user base for its gaming communication software to leverage its social features for selling third-party content.

"We have an amazing relationship with our community. It feels like a friendship oftentimes," said CMO Resmini. "When I think about these large app stores or game-store experiences, they don't feel very friendly. They don't feel very personal. We wanted to bring that feel we have with our community to our store as well."

Discord will use algorithms to help gamers discover the titles on the platform that already have been selected by its staff (who will write accompanying reviews). Data on what users' friends play will also guide the selection.

"We ultimately believe that friends are the best source for understanding what we should play," Resmini said. "Discord is built for you to hang out with their friends. To make that a frictionless experience, from talking about it to purchasing it, we just think we have a major opportunity there."

While consumers may desire recommendations, the convenience of vast selection remains a strong draw regardless of the platform. And if Discord is successful, it may not stay small.

"Just like with Microsoft, if [Discord's] approach works, I would not expect them to keep it smaller scale," Sinclair said. "That doesn't mean they would abandon [curation] the way Valve seems to want to do. But there's plenty of room to grow between those two extremes."

Erica Yee, special to CNBC.com

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