The Inner Workings of Valve Part II

So I’ve been talking about Steam for some time, discussing what it is and how it generally works. One thing we haven’t talked much on is the history of Steam. More specifically, what was it that made Valve decide to create the system? In this second part of this written documentary, we discuss the ways in which Steam has grown to become the force it is now.

‘One of the things that the internet represents is an enormous broadening of distribution channels…opens the door to titles that would have difficulty finding and developing an audience otherwise’ – Gabe Newell on Steam, 2009.

It was 2004 and Half Life 2 had finally been released to much anticipation. Game critics were quickly lauding it as a piece of ‘perfect art’ and ‘redefining the gaming culture’ (or words to that effect). It eventually would set the benchmark to fellow games companies about the capabilities that games can achieve, especially in regards to the game’s physics engine.

But Valve had struck a one-two punch. Along with Half Life 2, Steam was officially released. From the beta testing previously, they had manage to address many of the problems from before. It still wasn’t perfect by any means, but it was much better improved.

By 2005, Valve had secured the first of its publisher deals, fulfilling one of the project goals of cutting out the ‘middle man’ of game sales. In 2011, Forbes estimated that Steam sales accounted for roughly 50-70% of the $4 billion for the online PC games market. As Steam become more and more bigger, various videogame companies saw the sales potential of the system and started marketing their games. They varied: some were triple-A titles, others were smaller indie-style games.

Regardless of who made them, they were available to buy and play. Steam has changed the market landscape for PC games in the same way that Amazon had changed the landscape for various goods, including videogames. We’ve seen from earlier posts that Steam holiday sales help with this process. Valve doesn’t usually publish their actual sales figures but you can bet it’s pretty high.

From being an unstable system that sagged underneath the weight, to a polished and significant system, Steam is almost a rags-to-riches story. It’s no laughing matter.

I don’t want to act as a Steam salesman. But it’s hard to ignore the facts that make Steam into the force it now is. It now sells over hundreds of different titles at substantially cheaper RRPs. It now has automatic update downloads, which has been perfected over time to become nothing more than just a sit and wait. It has a user base of close to 35 million. I am one of them.

Something I didn’t mention a lot, but is really important, has been spoken by Gabe Newell himself. He spoke of Steam allowing doors to open for people wanting to promote their products/ideas. This is something that Steam has allowed people to do. By introducing the Workshop/Greenlight options, and allowing other developers access, Steam has effectively opened a very large door to opportunity.

This is largely to do with the modernization of the internet itself. When Steam first came out, to do those things would have been technologically difficult to implement. But it present an enormous opportunity for commerce. Not only would it help promote their Half Life 2, but Steam would also begin to trend of internet buying. And bang, the door has been kicked down.

We’re now seeing all sorts of projects on display. Valve has always taken a dedicated view on their community activity. We’re seeing all sorts of weird and wonderful games, and getting to know people, as Gabe quite rightly said, would have trouble developing themselves.

I think the important issue for my own project…is to allow it so that people can have the option to ‘develop themselves.’ Not necessarily in making videogames, but in academic projects, works, documents. The internet provides us with the biggest space available for communications (if we ignore the Earth entirely), and a social network-style system would allow this to be achieved. The possibilities are…expansive.


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