Each server would likely have to utilize a payment service.

Yeah but that would mean each server has to take custody of funds, have their own individual contractual agreements with game companies, handle refunds, bear all the legal and tax burdens of this, and get people to trust they won’t scam them. It’s just too much of a burden, these are all things that benefit heavily from centralization and economies of scale, due to the legalistic nature of payments. You would end up with one dominant instance and unused federation, if there was even anyone willing to deal with all that stuff to begin with.

I feel like you could solve this stuff pretty well with crypto, having payment go directly to the game devs, and a no refund policy or something to simplify things, but crypto is too hated so that wouldn’t work right now.

hm that is a good point

Why don’t people? Because steam is just better

I am skeptical that this is the main reason (even though it’s true and is a reason). I think people don’t like the idea of having their games library split across multiple services, and don’t like using/learning software they aren’t familiar with, or that other people aren’t using.

Main problem I see is payments

Otherwise why would anyone use software they aren’t used to? Steam is really good, they’ve been putting massive resources into making it better for many years, and it has all the network effects.

I don’t mind it, Steam is nice but I don’t want them to have a monopoly on PC games

It cannot

does that ever actually happen

The biggest reason why not is that it requires the implementation of centralized tracking systems for everyone to confirm ID for accessing these services, which is a privacy nightmare and takes way too much agency away from individuals. If Reddit or something bans me for a stupid reason or because their broad brush modbots malfunctioned, I should be able to evade that ban with enough care and effort, and the government shouldn’t help them make sure I can’t. I should also have the ability to use social media pseudonymously without being subject to corporate tracking.

The other reason, of course, is that banning children from social media cuts them off from participating in society or having any sort of a public voice. That’s fucked up too.