I can only speak for myself, but quite often, steam is less of a hassle than finding a full version of a game (or other means to implement this). Combining that with steam sales or the usually low prices of steam has resulted in game sales over piracy for me already, and I'm just a poor student currently.

I haven't used Steam, but I am becoming a fan of the relatively new Gamersgate (http://www.gamersgate.com/).

It doesn't even require a desktop client, which is one of the few complaints I've heard about Steam.

However, none of the games I've purchased there use DRM at all, so I don't know for sure how DRM games work with it.

100% spot on. Steam is totally awesome. I find your reference to steam _model_ disconcerting though. If more companies try to copy it & we've got a distribution for each publisher then its back to square one. Actually make that square -1.

With the free to play games on Steam, the two models converge. The advantage for the publishers is, apart from access to the large store window and access to the Steam tools and network for distribution and upgrading, that the micro-transactions become hassle free for the customers, as they all use the same shared Steam Wallet. The advantages for Valve is obviously that they can take a processing fee for the transactions.

It does work pretty well, but for new, big publisher games, "not too expensive" is simply not true. Buying the disc version on Amazon is usually 30-50% cheaper. I've bought indie games on Steam, though.

It is excellent indeed, for games where the developer/publisher isn't willing to publish DRM-free.

I generally go for GoG first, Steam second, then stop. I've quit bothering with physical copies a long time ago.

It's still around, and hasn't shut down, so that tells you they are doing something right.