From Forgotten to Essential: Why Third-Party Distribution Is Back in Play

Published on · By · 5 min read
From Forgotten to Essential: Why Third-Party Distribution Is Back in Play
The global distribution renaissance is here

In an industry dazzled by what’s trending - AI breakthroughs, booming UGC ecosystems, and cloud-native experiences - it’s easy to ignore something as unsexy as distribution. But that’s exactly where one of the biggest untapped growth levers is hiding.

Welcome to the global distribution renaissance.

More Games, Less Growth

Let’s set the stage. The global gaming market hit a high of $258B in 2022, then slipped into its first major contraction in over a decade, falling by 7% over two years (1). Not devastating, but well… let’s call it a wake-up call.

Most of that contraction came from mobile. It’s part of a broader shift in entertainment consumption - short-form video platforms like TikTok and Instagram Reels are eating into gaming time, especially on mobile. That’s hitting free-to-play conversion rates hard and pushing studios to pivot. Many are now shifting focus to PC, where monetization is more stable - which, in turn, is flooding the market with even more PC titles.

The result is clear: the pipeline is overflowing. In 2024 alone, over 19,000 games launched on Steam - an average of 52 new titles a day (2). But players? They’re not always biting. From Q1 2021 to Q4 2023, total minutes played across PC and console dropped by 26%, with another 10% decline in early 2024 (3). And 61% of total playtime? Still dominated by games over six years old.

So where do all these new games go? Into a distribution funnel that’s more congested than ever, and… more dependent on the same known handful of global platforms. That’s the problem.

What the Data Says

Steam is the behemoth of PC gaming - but did you know 28% of all Steam game activations come from third-party sellers (4)?

And this isn’t just anecdotal. The data above clearly raised strong concerns. A prime example is Valve, which – seemingly uneasy with the scale of third-party activity

– introduced a 5,000-key cap on default Steam key requests in late 2023 (7). The move was widely interpreted as an effort to reassert control over how and where games are sold. (We broke that down here.).

At VaultN, we see a similar pattern: across publishers we work with, third-party accounts for roughly 22% of units sold and 25% of total revenue. That said, regional dynamics matter - third-party share tends to be lower in the U.S. and higher in emerging markets where alternative storefronts play a bigger role in accessibility.

Third-Party = Discoverability Engine

Time for the real kicker. Maybe it’s already obvious, but… we don’t just need more channels. We need better visibility and discoverability. In a world where hundreds of titles launch every week, getting noticed on Steam, PlayStation Store, or Xbox is like yelling into a hurricane.

Third-party platforms and storefronts - especially regional and niche ones - offer a way out. They’re better positioned to:

  • Surface the right content to the right (and already existing) audience
  • Cater to localized buying habits
  • Support mobile-first and low-spec markets
  • Offer bundles, deals, and mechanics the majors won’t touch

In many high-growth markets - like China, India, Southeast Asia, Latin America, and MENA - players often rely on third-party storefronts because the “main” platforms aren’t built for them, whether due to pricing, payment systems, or general accessibility.

Distribution Is Evolving. Fast.

We’re entering a distribution innovation phase (8). It’s a structural shift. Just like Steam redefined digital PC gaming in the 2000s, today’s market is ripe for rethinking where, how, and through whom players access games.

Developers are already adapting. AI triggered an explosion in game production - tools, engines, and assets now flow off the shelf. The AI-powered gaming market soared from ~$1.2B in 2022 to $2.3B in 2023, with generative AI alone topping $1.8B in 2025 (9)(10). That surge is powering browser revivals like Quake II demos, low-spec projects, and multi-platform rollouts. Players want content they can find, afford, and run anywhere. Distribution just became a strategic advantage.

Emerging Markets: The Next Frontier

Emerging markets are leading this shift. In 2024, China alone accounted for over $47.5B in game revenue, driven by more than 700 million players. Meanwhile, 12 other Asian and MENA countries generated a combined $39.1B, bringing the regional total to $86.6B - 46.4% of global game revenue - from 1.65 billion players. Latin America added another $8.7B, fueled by a 335 million-strong player base. And India? It’s racing toward the $1B mark, with only 3% of its massive gaming population currently paying for games (11).

This isn’t just about language localization or regional pricing. It’s about infrastructure - and distribution. Players in these markets need platforms that understand their payment preferences, device realities, and cultural buying habits.

Valve’s move in 2023 to shift pricing in Turkey and Argentina from local currencies to USD wasn’t just financial housekeeping - it was a strategic response to fraud and arbitrage in fragmented economies (12). It proves that even the biggest names are adapting to the messy realities of global access.

Solution Hidden in Plain Sight

There’s no shortage of content. What we’re missing is smart, adaptive distribution.

Third-party sales aren’t just a workaround. They’re a discovery engine. A revenue stream. A way to reach the players your primary storefront isn’t serving. And in a market where attention is currency, that might just be the most valuable play left on the board.

The future of game sales won’t be won by platform loyalty. It’ll be won by availability, access, and the flexibility of finding new ways to be seen.

Sources:

(1)(8) Aldora (2025). SXSW 2025: State of Play Report
(2) Financial Times (2024). How to survive gaming’s age of superabundance (https://www.ft.com/content/4ed1ac0e-0920-4dbb-9841-9dbff9693c53)
(3) Newzoo (2024). The PC and Console Gaming Report 2024.
(4)(7) Ars Technica (2019). Why Valve actually gets less than 30 percent of Steam game sales (https://arstechnica.com/gaming/2019/04/why-valve-actually-gets-less-than-30-percent-of-steam-game-sales/)
(5) Epic Games (2025). Epic Games Store 2024 Year in Review (https://store.epicgames.com/en-US/news/epic-games-store-2024-year-in-review?lang=en-US)
(6) Sony Group Corporation (2022). Consolidated Financial Results for FY2021 (https://www.sony.com/en/SonyInfo/IR/library/presen/er/pdf/21q4_sonyspeech.pdf)
(9) Market.us (2024). AI in Gaming Market Size, Share, Forecast 2024–2033 (https://market.us/report/ai-in-gaming-market/)
(10) The Business Research Company (2024). Generative AI in Gaming Global Market Report 2024. (https://www.thebusinessresearchcompany.com/report/generative-ai-in-gaming-global-market-report)
(11) Statista (2024). Gaming revenue and user forecasts for China, India, MENA, LATAM. (https://www.statista.com/)
(12) Game World Observer (2023). Steam to abandon regional pricing in Turkey and Argentina by converting user wallets to USD in November (https://gameworldobserver.com/2023/10/25/steam-turkey-argentina-usd-convert-regional-pricing-abandoned)