Steam is a video game digital distribution service by Valve. It was launched as a standalone software client in September 2003 as a way for Valve to provide automatic updates for their games and expanded to include games from third-party publishers. Steam has also expanded into an online web-based and mobile digital storefront. Steam offers digital rights management (DRM), server hosting, video streaming, and social networking services. It also provides the user with installation and automatic updating of games, and community features such as friends lists and groups, cloud storage, and in-game voice and chat functionality.

The software provides a freely available application programming interface (API) called Steamworks, which developers can use to integrate many of Steam's functions into their products, including in-game achievements, microtransactions, and support for user-created content through Steam Workshop. Though initially developed for use on Microsoft Windows operating systems, versions for macOS and Linux were later released. Mobile apps were also released for iOS, Android, and Windows Phone in the 2010s. The platform also offers a small selection of other content, including design software, hardware, game soundtracks, anime, and films.

The Steam platform is the largest digital distribution platform for PC gaming, holding around 75% of the market share in 2013. By 2017, users purchasing games through Steam totaled roughly US$4.3 billion, representing at least 18% of global PC game sales. By 2019, the service had over 34,000 games with over 95 million monthly active users. The success of Steam has led to the development of a line of Steam Machine microconsoles, which include the SteamOS operating system and Steam Controllers.

Valve had entered into a publishing contract with Sierra Studios in 1997 ahead of the 1998 release of Half-Life. The contract had given some intellectual property (IP) rights to Sierra in addition to publishing control. Valve published additional games through Sierra, including expansions for Half-Life and Counter-Strike. Around 1999, as Valve started work on Half-Life 2 and the new Source engine, they became concerned about their contract with Sierra related to the IP rights, and the two companies renegotiated a new contract by 2001. The new contract eliminated Sierra's IP rights and gave Valve rights to the digital distribution of its games.

Around this time, Valve had problems updating the published games. They could provide downloadable patches, but for multiplayer games, new patches would result in most of the online user base disconnecting for several days until everyone had implemented the patch. Valve decided to create a platform that would update games automatically and implement stronger anti-piracy and anti-cheat measures. Through user polls at the time of its announcement in 2002, Valve also recognized that at least 75% of their users had access to high-speed Internet connections, which would continue to grow with planned broadband expansion in the following years, and recognized that they could deliver game content faster to players than through retail channels. Valve approached several companies, including Microsoft, Yahoo!, and RealNetworks to build a client with these features, but was declined.

Steam's development began in 2002, with working names for the platform being "Grid" and "Gazelle". It was publicly announced at the Game Developers Conference event on March 22, 2002, and released for beta testing the same day. To demonstrate the ease of integrating Steam with a game, Relic Entertainment created a special version of Impossible Creatures. Valve partnered with several companies, including AT&T, Acer, and GameSpy. The first mod released on the system was Day of Defeat. In 2002, the president of Valve, Gabe Newell, said he was offering mod teams a game engine license and distribution over Steam for US$995.

Prior to the announcement of Steam, Valve found that Sierra had been distributing their games in PC cafes which they claimed was against the terms of the contract, and took Sierra and their owners, Vivendi Games, to court. Sierra countersued, asserting that with the announcement of Steam, Valve had been working to undermine the contract to offer a digital storefront for their games, directly competing with Sierra. The case was initially ruled in Valve's favor, allowing them to leave the contract due to the breach and seek other publishing partners for retail copies of its games while continuing their work on Steam. One such company had been Microsoft, but Ed Fries stated that they turned down the offer due to Valve's intent to continue to sell their games over Steam.

Between 80,000 and 300,000 players participated in the beta test before Steam's official release on September 12, 2003. The client and website choked under the strain of thousands of users simultaneously attempting to play the game. At the time, Steam's primary function was streamlining the patch process common in online computer games and was an optional component for all other games. In 2004, the World Opponent Network was shut down and replaced by Steam, with any online features of games that required it ceasing to work unless they converted over to Steam.

Half-Life 2 was the first game to require installation of the Steam client to play, even for retail copies. This decision was met with concerns about software ownership, software requirements, and issues with overloaded servers demonstrated previously by the Counter-Strike rollout. During this time users faced multiple issues attempting to play the game.

Beginning in 2005, Valve began negotiating contracts with several third-party publishers to release their products, such as Rag Doll Kung Fu and Darwinia, on Steam. Valve announced that Steam had become profitable because of some highly successful Valve games. Although digital distribution could not yet match retail volume, profit margins for Valve and developers were far larger on Steam. Larger publishers, such as id Software, Eidos Interactive, and Capcom, began distributing their games on Steam in 2007. By May of that year, 13 million accounts had been created on the service, and 150 games were for sale on the platform. By 2014, total annual game sales on Steam were estimated at around $1.5 billion. By 2018, the service had over 90 million monthly active users.