A Few Brief Thoughts on Valve & Steam

As far as I’m concerned, there are four major consoles on the market right now: Nintendo Wii, Sony Playstation 3, Microsoft Xbox 360 and Valve’s Steam. Of course, you have to be willing to have a somewhat flexible view of what being a console is to share this view, and there are certainly other arguments to be made about what Steam actually is or is not, but right now it’s as close as you can get to a universal PC-based platform for games and content delivery. And, though I can’t necessarily stream HBOGo or Pandora through Steam (nor would I want to), it has become the central source for my PC life.

Even if you don’t buy into the idea that Steam is at least console-ish, it’s hard to deny the substantive impact it has had on the PC-gaming industry. Which is why I have this kernel of fear that steeps in the recesses of my mind, a vision that’s just a little too clear, a little too easy to conjure. It’s a vision of some Joystiq or Kotaku headline that reads something like, “Activision buys majority stake in Valve.” Besides the terrible question of how you might portmanteau that company now (Activalvizzard?) the possibility that this company might someday be lured from its lofty philosophies is deeply troubling.

I realize that many of us in the media and many of us in forums have labelled Valve a White Knight in an otherwise a dark time. Some would argue that there are no shortages of reasons to keep a skeptical eye turned ever toward a company that has the keys to the locks of our games -- games that some of us have spent hundreds if not thousands of dollars on. After all, if a company like Blizzard can undergo a cultural shift that seems to skew them away from the interests of their customers, presumably anybody can.

But for now, I can’t help but feel that the recent whispers of the PC returning as a competitive force in the business of gaming can largely be attributed to the success of Valve and Steam.

It’s not often I say this, but our own Pyroman brilliantly predicted the future back in September, 2003 with an article that I really wish I had written. At this point GWJ was still in its infancy, trying to figure out whether it was a news site, a forum community or a place for commentary. Less than a month later we would be the site that broke the news of the Half Life 2 source code theft -- though most of the attribution ended up going to Slashdot which referenced our story, so I guess I’m discovering that I’m still bitter about that -- but Pyro’s analysis of Steam which was only just coming out of beta at the time was almost prescient.

It talks about all the ways the kind of technology that powers Steam could be misused and at a time where everyone was worrying about server load issues, this was an article that looked forward and asked:

“Do you trust Valve to not screw you? As I've said in several speeches made to my dog while we were hiding from the government mind control beams, Digital Rights Management is a technology ripe for abuse that only works if it's not abused. For every Apple iTunes store there are 30 BuyMusic.coms. DRM has a horrible track record of benevolent enforcement with other media. However Valve has a great track record with regards to community. They treat their fans well and give all kinds of content away, if any developer can pull this off it's them. Really though, it's about trust. Who do you trust? “

In the end, or more precisely to date, Valve has been one of the companies that ended up being worth the trust a lot of people invested. But, once the genie was out of the bottle, we were rewarded with the treatment we’ve seen from companies like UbiSoft, Activision and, yes, even Blizzard. While we can take some solace that our faith was well placed in the hands of Valve, they have blazed a trail that far less benevolent overlords have since trod.

But, there’s still no guarantee about tomorrow, just like there wasn’t in 2003. I hope that Steam remains a reliable, customer-friendly platform. I would even say that I expect it to, that for what it’s all worth I actually trust Gabe Newell and the team he has put together to walk that tightrope line of innovative, successful and service-oriented. In an industry that constantly seems to one-up itself on marginalizing its customers, it’s hard not to be waiting for the other shoe to drop.

As the latest Summer Sale takes shape on Steam, it’s pretty easy to get a belly-load of warm fuzzies about Valve. After all, before them the idea of clearance discounts for games were little more than a way for the Gamestops of the world to unload two year old EA Sports titles and last Christmas’s duds. Now I can get games like Max Payne 3, Saints Row the Third and Shogun 2 for deep discounts.

That’s all well and good, but the more I invest my games into Steam, the more I can’t help but note how that means I am now married to the platform. Should the unthinkable come to pass and Valve suddenly take a turn for the worst, there’s no eject cord. No emergency exit. I either have to continue using their platform or give up, well let’s just say a lot of games.

I try to keep this in mind this time of year, because every time I start unloading dough into the Steam sales, it’s not just a transaction where I now own a product. It is a commitment that I will remain a Steam client. It is another root planted into the ground tended by Valve. And, for now and hopefully the foreseeable future I am comfortable with that because they have earned my trust.

But, I have a laundry list of companies that have done the same in the past, and most of those names eventually let me down. So, a part of me waits and worries.

Comments

So long as Valve remains a private company, it should remain relatively far-removed from the perils of being beholden to a purely profit-motivated company.

There was an interesting article in WSJ about Valve a few weeks ago:

Basically, it said that Valve is a "bossless" company, which I think has two effects on Valve from a consumer point of view:
1) Inertia is a bigger safeguard (or problem depending on the situation) at Valve than at other companies. It couldn't make a decision over-night, especially one as important as selling part of itself away.
2) There is no one person at Valve to make the decision to "sell out" It would take a group effort to make such a big decision.

If Valve ever disappeared, it would suck, but for some reason, I don't think I'd care that much if I lost all of my games (and I've got over 300). I can't for the life of me understand why that possibility doesn't horrify me.

Grubber788 wrote:

So long as Valve remains a private company, it should remain relatively far-removed from the perils of being beholden to a purely profit-motivated company.

Yup. The worst thing that could happen would be if Valve decided to go public or sell out to a major publisher.

If that would happen we customers would instantly go from the primary focus of the company to a distant third behind investors and executives.

Worse, Steam would be viewed by Wall Street as a "sticky" application that kept customers tied to the company so it could extract the maximum amount of money from us in the form of endless DLCs and micro payments for everything.

Elysium, don't you know that currently Activision-Blizzard has more to worry about getting bought than Valve/Steam?

EDIT: Joking aside, good article and a nice reminder that things really haven't changed all that much in nearly a decade. However, it's worth noting that (and this probably wasn't known at the time of writing) Valve is opening up their processes a little more by turning over some of the decision making to the customers and developers/publishers that use the service. So I don't think they're about to make any sort of heel turn in the near future.

Grubber788 wrote:

I can't for the life of me understand why that possibility doesn't horrify me.

I feel the same way and I think it's down to a few reasons. First and foremost are the sales. Not ever getting a chance to play a game I got for $5 is going to sting a lot less than one I bought full price for $60. Second, Video games are the epitome of throwaway entertainment, so by nature a lot of games are of the type where you're going to get your fill or beat it and never come back to it. Finally, I've got more games on the service (due to the aforementioned sales) that even if it magically goes poof, am I really losing anything that I haven't already neglected?

I would also like to point out that in the event of Steam going away, I'm sure the competition will be tripping over themselves to provide a new home for all the refuges that will be looking for a new home.

In the meantime, we have services like the Humble Indie Bundles and GOG that serve as a sort of umbrella policy in case of the Steamageddon. It's not an exact 1:1 overlap with Steam, but I'm pretty sure I have DRM free copies of the majority of my indie games (which also came with Steam keys) and I have GOG to round out some of the classics.

OG_slinger wrote:

Yup. The worst thing that could happen would be if Valve decided to go public or sell out to a major publisher.

From what I've heard they've rejected several offers to have the Steam business purchased from them. I imagine they've had plenty of times where they could've done an IPO and opted not to as well. Or been purchased by Vivendi or EA.

shoptroll wrote:

EDIT: Joking aside, good article and a nice reminder that things really haven't changed all that much in nearly a decade. However, it's worth noting that (and this probably wasn't known at the time of writing) Valve is opening up their processes a little more by turning over some of the decision making to the customers and developers/publishers that use the service. So I don't think they're about to make any sort of heel turn in the near future.

Wow. No more approval process for patches and eventually games. Really opening this puppy up. Maybe that'll bring in some of those more obscure titles that are only on other services now.

Valve and Gabe have stated that they think going public is a terrible idea:

"All [companies that float] end up getting their customers changed," Valve's Erik Johnson told the latest issue of PC Gamer.

"Any bad decision I ever see out there is because somebody created this different customer that was whoever funds them, and not the consumer of the product."

Gabe Newell added: "You end up with a totally different set of decisions, and the person who's trying to design the experience is like' Okay, I guess we'll put Christopher Walken in our game."

Assuming Gabe doesn't wake up one morning and decide to sell his soul to the devil, I don't think we will ever have to worry about Valve getting sold out.

...at least I hope not.

I am a Valve customer and I hope that they put Christopher Walken in a game

The way I see steam and many other similar issues is that it comes down to trust. Trust has to be earned, and given the way Valve have operated in their 16 years of operation I'd say they have earned it. Trust or reputation is not a tangible thing though, and it's not a guarantee, you can't point at it and say they will never do something bad, but it's all we've really got.

The other issue is control. DRM in all it's forms, by whoever programs it or uses it is about some form of control. Really for PC gaming over the years, it's one of many factors that can and already has got in the way of playing my games. Some have bitrotted, and some have used copy protection that is defunct or doesn't work on modern hardware (optical drives) or operating systems. They do what they can on their end to have control of what I am and am not supposed to play, and I do what I feel I need to preserve my ability to play games. With a long enough time in PC gaming though, I find that when steam is operating correctly it's most often not the thing that stops me, and there are very often official and unofficial backup options when it isn't.

Don't harsh my buzz, man. Not during the Steam Sale.

If Valve shifts to the Dark Side, and access to our existing libraries is curtailed in some way, I would hope that the wrath of the millions of consumers who fight back would be greater than the apathy of millions of gamers who simply roll over and take the beating because they gotta have their games. Based on past events I couldn't begin to predict which way that would go. EA doesn't seem to be hurting, and I find many of their practices to be blatantly anti-customer.

Jaunty wrote:

I am a Valve customer and I hope that they put Christopher Walken in a game

I can give you Christopher Walken in a game right now.

I would hope that the wrath of the millions of consumers who fight back would be greater than the apathy of millions of gamers who simply roll over and take the beating because they gotta have their games.

My guess is that wrath and apathy would achieve about the same thing. I don't think Activision is suffering from some kind of lack of gamer wrath, but it's been years now and they're still whistling the same tune.

Grubber788 wrote:

If Valve ever disappeared, it would suck, but for some reason, I don't think I'd care that much if I lost all of my games (and I've got over 300). I can't for the life of me understand why that possibility doesn't horrify me.

I will posit a theory that it's because their sales have given us such an incredible surfeit of practically free games that we always have something new on the horizon, so losing the ability to play our older stuff isn't really a blow. I just looked back through my steam list, which is in the lower 200s, and of all the games on there I would go back and replay maybe five, tops. So even if they did fold, and I had to re-purchase a few things like TF2, I'm coming out waaaaaay ahead due to all the wonderful $2.49 experiences I had.

I was late to Steam as I am paranoid dude who hates the idea of not "owning" things. I knew that the service is excelent and the prices are great but I still avoided any thing I could hold in my hand or play without logging into a service.

What changed was my realization that "ownership" is more or less dead, at this point we are paying market value for access to game, or music, or (increasingly) video. Once the idea of ownership is dead it is only about service.

I am still a skeptic, and am less than thrilled about the inevitable shift to streaming-only, or always online games. But at the end of the day I like to play so I have to keep with the times.

Always have a plan B. This is exactly why I don't flinch when I have the opportunity to buy (admittedly a deeply discounted) second copy of any Steam-loaded game. Sort of a reverse Steam-activated strategy.

In short, never have your favorite digital copies of a game in a single location if you can avoid it.

Budo wrote:

Always have a plan B. This is exactly why I don't flinch when I have the opportunity to buy (admittedly a deeply discounted) second copy of any Steam-loaded game. Sort of a reverse Steam-activated strategy.

In short, never have your favorite digital copies of a game in a single location if you can avoid it.

I did just that with VtM:Bloodlines. I love that game and have 1 original dvd copy, 1 copy of that dvd, and a download from steam.

such a good game...

I agree with parallax. Our generation will be the last generation that wants to own physical media. Our kids and their kids are just going to take it for granted that owning a disc that you have control and dominion over is not going to happen. They'll buy music, movies, books, video games, etc digitally and not think twice. They'll read about having to store all those disks and stuff and think how weird that was.

I wish Gabe started taking better care of his health.

Don't worry about Activision buying Valve. Activision is preoccupied right now because of its parent company Vivendi. Vivendi's CEO Messier was recently thrown out, and the new management of Vivendi now want to sell its 60% controlling stake in Activision. This is worth around $8B. Vivendi is under tremendous pressure to break itself up given the horrendous performance of its stock over the past 5 years. Vivendi needs to raise cash and one of the assets it wants to unload is Activision. Unclear, however, if there are any strategic buyers for this stake. So given this uncertainty, no way Activision buys Valve. Also Valve probably too expensive for them to buy anyways.

Also, if I interpret your loose definition of a console as a developer platform with some DRM, I would suggest there are at least 6. iOS and Android are also "consoles". Just look at the Ouya craze, which is based on Android and the Apple TV which could also become a console with Airplay.

iOS is definately a console, and the reason many have bought into it is based on their trust of Apple, a public company. Apple is beholden to their shareholders, but one of their biggest assets is that consumer trust, and (I hope) if they erode that trust too much, they will lose value as a company.

Valve is the Apple of gaming. They created a proprietary engine (Source), they created a proprietary store to sell it, and they legitimized the store by offering up their proprietary DRM to third parties so that they too could sell their games in the store.

It's a closed ecosystem, and yes, while I am aware that the DRM has been cracked, and the third parties grumbled at first, it's worked well for everyone involved.

Sort of like iTunes and the App store.

Gabe Newell is even Jobsian in the way he does/doesn't control the company.

I think we are starting to see what a post-Job's Apple will be (7" iPad anyone?), but let's hope that no one is stupid enough to try to buy Valve and remove Gabe and the trust he has built.

At the moment several of the big houses are either in deep trouble or in a position they could be bought out.

Ea - Stock price a shadow of its former price, CEO prob has less than 6 months to figure it out.

THQ - Slashing staff , stock price in penny land

Activision\blizzard - Doing great but is parent is in MAJOR debt (15 billion) and would love to shed this division

I know this sounds weird but there are folks on Wall Street who believe the future of gaming is in low priced phone games and micro transactions. Any organization in this industry that doesn't focus their efforts in this realm are getting hammered in their stock value. Personally I think this is one of those times when the market has it all wrong. I think long term there is going to be a market for a console or PC in the gaming world. Eventually the market will figure this out. However in the mean time I would expect to see some of the AAA devs merge or get acquired. I don't think there will be a buyer for Activision unless Microsoft decides to take them. THQ I think is more likely to just go under, and EA is probably going to re-structure cut staff kill a brand or two and get leaner.

mcdonis wrote:

Ea - Stock price a shadow of its former price, CEO prob has less than 6 months to figure it out.

To be fair, he's had almost 4 years to figure it out...

Valve, obviously, is unlikely to be overly influenced by Wall Street, at least from what we can tell from the outside. And they have better market data on PC sales than anyone anywhere else in the industry.

There's a lot of potential ways for things to go wrong, but right now I'm not too worried by them. Half my digital collection is from GOG. The Steam DRM turned out to be something I can live with: I don't like any DRM, on principle, but as it turns out, a game they're still selling with the Steam DRM is a game there is an incentive to make sure the game still works. If that breaks, in the long run, we'll be in for interesting times. So far I haven't heard of that being an issue.

It's been fascinating to watch "Software as a Service" roll out to gaming. Steam is the best gaming service on the PC, so they pretty much just swim in money pits every day. Their main competitors for your gaming time (services are measured in how much you use them) are F2P, consoles and mobile.

A little older and alot less paranoid, I look back on that article as technically accurate but ultimately asking an obvious question. Trust is an inevitable component of any service. So as we moved away from boxes and into services, that was going to become a big deal. Spend your money for a service only if you think they'll provide it.

I'm no longer a member of the prized 18-35 y.o. demographic but I buy stuff like one. My Steam library contains around 200 games and I've played about 150 of them to wildly varying degrees. Most were bought during a sale. People lament how large their un-played or under-played game pile is, but what if we had a running tally of how many movies we had paid to see, or even worse, a list of restaurant/bar tabs over the last decade? that number and cost would dwarf the Steam list.

If my Steam library was to disappear in a few years I'd be upset about having to re-buy a few of the games, but I've gotten far more value from that tab than any movie/restaurant/other entertainment expense list.

Pyroman[FO] is once again on the money here. Steam isn't a merchant so much as it is a service provider; it's closer to HBO than it is to Best Buy.

Games on Steam are on deep discount because you don't actually own them in any real way. You can access them on Steam in the same way you can access Pay-per-view on HBO, but you don't own the content in any normal way we associate with the word "own."

I think that the community's (not mine, I don't like Steam) continued patronage of Steam isn't a reflection of trust so much as it is a reflection of a continuing satisfaction for services well rendered. If Newell is smart, he'll realize that that patronage will only continue so long as the customers like the service, and there's no viable competitor. In this sense, it's entirely in Steam's interests to poll its clients for what they want and to give it to them as best it can.

Should Steam fold or render worse service than it currently is providing, it stands to reason that another company will pick up the slack and provide competition. Arguably, GOG is already nibbling at the fringes of that possibility today, though they're careful to be firm about where their boundaries lie. (And GOG actually does sell you software as a product).

Great article and a thought provoking read. On the outside edges of PC gaming here in lowly Indiana, I am just now starting to cache and put my trust into Steam. With all the direct download competition out there now, I only feel that such competition is going to keep Valve honest (but what do I know). I have loved Valve games for awhile now and have been on Steam for a long time, but just now got a dedicated gaming PC and am now thinking hard about my purchase decisions when it comes to major releases. A lot of good debates and conversations to be had going forward, I'm sure.

Budo wrote:

Always have a plan B. This is exactly why I don't flinch when I have the opportunity to buy (admittedly a deeply discounted) second copy of any Steam-loaded game. Sort of a reverse Steam-activated strategy.

In short, never have your favorite digital copies of a game in a single location if you can avoid it.

I love this. It's Disaster Preparedness. A Gaming "Go Bag" in case of earthquake or other natural disaster. A bunker in the backyard stocked with water and guns and cans of....games.

Smart, and probably all I need to keep myself safe from potential Steam disaster.

Le0hart85 wrote:

Great article and a thought provoking read. On the outside edges of PC gaming here in lowly Indiana, I am just now starting to cache and put my trust into Steam. With all the direct download competition out there now, I only feel that such competition is going to keep Valve honest (but what do I know). I have loved Valve games for awhile now and have been on Steam for a long time, but just now got a dedicated gaming PC and am now thinking hard about my purchase decisions when it comes to major releases. A lot of good debates and conversations to be had going forward, I'm sure.

I almost envy the horizon you've just crested. As a lifelong PC gamer, I imagine your passage from console gaming to PC gaming as an experience akin to discovering a whole new world ripe with potential

My first experience with Steam was in November 2004, when the ridiculous delay between the time I finished installing a retail copy of Half-Life 2 (on 5 CDs!) and the time I was able to play it made me swear never to use it again. Man did I hate Steam. I didn't use Steam again until I bought the first Assassin's Creed on sale in March 2009.

Since then I suppose I've forgiven them for the initial impression they made, but I can't forget it and every once in a while, when I realize that just about all of my games are on their platform, I feel a twinge of...remorse? regret? resentment? something, anyway, that almost makes me wish for the pre-Steam days.

Of course, then we wouldn't have the precious, precious Steam sales.

I only joined in 2008, when I noticed the Orange Box. I bought it for HL2, got TF2 as well, but was so confused about the game back then. Didn't know what to do with it (thought it was a FPS to be played alone....). Since then, it has become my main gaming hub.
And if Steam would go down, or undergo dramatic changes, maybe they will just unlock your game with your serial and you are free to go....(one can hope, right?)
If worst comes to worst, I will find a way to get all my games back that I have paid for. No qualms about how to get them even. Every way is good then in my eyes, despite EULAs, copyright and what not.

What I will miss mostly is the community integration, I think that is the closest thing to the console part. Never was it so easy to find your buddy and play a game.