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Then use a website to convert the video the .gif.
I used http://giffffr.giphy.com/
No account needed to create it. No water marks. Cool different settings after it uploads.
Then upload the .gif file to Steam. :)
That's how I did my banner .gif on my profile if you want to see an example.
It could be a hassle to do this. Some of the obstacles I see is that Steam would need; a recording function (maybe use part of the current Streaming Option?), a way to encode said video that works everywhere, make said method to not lag further the computer or crash the game (something that happened me once streaming COD: United Offensive) and finally, I think the Steam Default Install would increase on installation size.
I'd rather prefer to have the option to upload the file on a video format (webm/ogv are good for small demos) leaving me the decision on how do I record the game and how do I encode it.
To avoid any overload Steam could put a limit file-size (5 mb I think is enough).
I believe the most benefit of this would be the in the Guides, when someone is showing how to follow a route, for example, instead of taking like ten screenshots they'd just need to upload a video.
As for GIF I don't think is a good idea. Sure, there are already gifs but if you load the Artork section or the Screenshot section causes a small increase on the computer usage. It also "lags" the client from time to time.
With the option to upload video on small samples we could decide wether to play or not the file and pause it when we scroll it further.
Or, at the very least, let us embbed the video from somewhere like googlevideo which I have seen provide controls for the video on Browsers.
As for YouTube I think is out of the question as I see the purpose of YouTube on showing long sessions (ten plus minutes) and I'm making my case for small portions of sessions, of seconds.
What is the benfit outher services have for short videos?