Ever since my little brother convinced me to try out Steam back around 2008, my consumption of PC games has increased dramatically. Steam is such an incredibly convenient service; it only takes a handful of clicks to buy something, and their occasional super sales allow you to pick up some great stuff at good prices. It should be no surprise that Valve has reported 100% growth for the platform in 2011.
All the money I've spent on Steam has made me wonder why I've hardly spend any money downloading games or videos from Xbox live. I've owned my 360 since the fall of 2005; through that whole time, I think I've bought one movie rental, two TV episodes, and one game (Dead Rising: Case Zero). In contrast, I own at least twenty games on Steam.
I think the reason that I've been so hesitant to spend money on Xbox Live downloads is because of Microsoft's ridiculous insistence on pushing Microsoft Points as a means of currency. You can buy Microsoft points in 400 ($4.99), 800 ($9.99), 1600 ($19.99), 4000 ($49.99), and 6000 ($74.99) increments. Games and rentals on Xbox Live seem to run around $15, so customers tend to be forced to purchase larger increments of points, with the remaining point balance just sitting uselessly on one's account. I suppose Microsoft thinks that it can make more money by connecting content to their make believe currency (and now that I think of it, I suppose it simplifies things across the global market), but for me it's another step in the process and makes me less likely to want to purchase anything. Steam tells me exactly the price of a game, in real US currency, and in a few clicks I can purchase what I want. Microsoft throws an extra step into the mix by forcing me to figure out how many points I'd need, and then add them to my account before I can buy what I want. I think Steam's success (and iTunes success in the music and video rental marketplace) proves that it's important to make it as easy as possible for customers to pay for the exact content they want. Any extra step, like Microsoft forcing customers to buy its abstract currency, is an added step that could force a lot of people away. I really think they could make more money off their digital downloads if they just charged for the cost of the content in local currency, rather than forcing people to buy their points. Of course, I have no actual research to back this up, simply my own personal experience. I'd be really interested to see if Microsoft carries along the points system to the new console they're working on. I'm sure they're always looking for ways to maximize their revenue stream: if they wind up ditching the Microsoft points system, then I suppose I wasn't the only one with an aversion to buying from Xbox Live.