The basic idea is that it’ll soon be possible to authorize your library to be shared with up to 10 other people. You cannot just share a single game but the whole library. Let’s say you authorize your brother. If your brother wants to play Papers, Please through your shared account but you’re down for some Call of Duty: Black Ops 2 at the same time, he’s kicked off and told he has to purchase Papers, Please on his own account. If you’re not playing, though, he can keep going.
This takes some obvious idea off the table pretty quickly. You cannot purchase one copy of a co-op game and play through it with a friend.
The big question: does this require people to be playing on the same PC? The above example makes that seem obvious, but strangers things have happened. The FAQ for family sharing mentions that it’s possible to authorize “up to 10 devices at a given time,” which would suggest one PC could act as a host library for 10 other computers. I’ve asked Valve for clarification on this, since it has the broadest ramifications for this.
It’s also currently unclear how this would impact Steam’s offline mode, or if developers would have the option of opting-out of participation.
As it stands, Valve is already saying not every game can be a part of this. Games that require “third-party key, account, or subscription in order to play cannot be shared between accounts.”
You will, however, be able to access downloadable content already purchased for a game.
The idea of sharing your digital games became a topic of conversation earlier this year, as Microsoft flirted with the idea for Xbox One. As a result of its massive turnaround on DRM policies, however, these potentially progressive and interesting ideas were kicked down the road.
Family sharing will enter into beta next week, with 1,000 users on Steam gaining access.
More information is available on Valve's official page, which also includes a detailed FAQ.