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Steam for Xbox 360?

by on April 22, 2011

Earlier today we were somewhat surprised to see an announcement from Microsoft announcing Lionhead’s Fable III on PC is coming not only to Games for Windows (GFW) but also Valve’s Steam platform. This seems to be a direct contradiction of Microsoft’s approach to counter Steam with the launch of a new Games for Windows Marketplace last fall, which the company said had a “leg up” on Valve’s service.

We couldn’t help but wonder if this meant that Microsoft is beginning to give up on GFW, but in reality, the more important aspect of this Fable III announcement may be that Microsoft is actually strengthening its relationship with Valve and could perhaps allow for Steam support in future Valve titles on the Xbox 360. Michael Pachter of Wedbush Securities agrees.

When we asked Pachter if the Fable news meant abandonment of GFW or the chance of Steam support on Xbox 360, he answered, “I think it’s the latter. Microsoft has a great relationship with Valve, and I think that their support for Steam is not necessarily a sign that they are giving up on Games for Windows.”

After all, Valve just released the critically acclaimed Portal 2 on consoles, and most gamers would tell you the PS3 version is superior. Microsoft execs probably don’t like reading quotes from Valve’s Gabe Newell like this one: “We made a promise to gamers at E3 that Portal 2 for the PlayStation 3 would be the best console version of the product. Working together with Sony we have identified a set of features we believe are very compelling to gamers. We hope to expand upon the foundation being laid in Portal 2 with more Steam features and functionality in DLC and future content releases.”

If Microsoft is smart, they’ll work with Valve to make sure future Valve titles on 360 are on par with their PS3 counterparts.

DFC Intelligence’s David Cole isn’t so sure it’ll happen though. “Obviously Microsoft wants to be a big distributor of digital content and that is why they have Xbox to begin with. So I see them being very limited in bringing on other distributors to Xbox,” he told us. “Their PC distribution is weak. So they need to use competitors. With Xbox they control digital distribution. So it is totally separate and I wouldn’t read anything into Steam PC implying a change for Xbox.”

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