Valve – A Different Kind of Game Maker

The New York Times is running an article discussing Valve’s business and development model, as well as a more interesting aspect – EA’s attempts at buying Valve.

Valve is a unique company – they are light on middle and upper management, don’t focus on financial quarters and are willing to move deadlines back if a game is not finished, rather than rushing it out to meet some marketing release date. they are also one of the largest privately owned videogame companies, worth over $2 billion according to some estimates.

What interested me is that the article talks about Electronic Arts’ efforts to buy Valve:

Not that Mr. Newell hasn’t had opportunities to sell out. Valve has been pursued over the years by Electronic Arts, which would very likely have valued Valve at well over $1 billion had the talks progressed that far, said two people with knowledge of the discussion who spoke on condition of anonymity because the talks were private.
….
Mr. Newell said that there was a better chance that Valve would “disintegrate,” its independent-minded workers scattering, than that it would ever be sold.

“It’s way more likely we would head in that direction than say, ‘Let’s find some giant company that wants to cash us out and wait two or three years to have our employment agreements terminate,’ ” he says.

Valve is, in some ways, better known for their cross-platform game distribution system “Steam” which has extensive support for Mac gamers, and offers a total of nearly 1,800 games (400+ Mac games) with tens of millions of customers.

    Here’s just a few of the OS X titles available on Steam

  • Counter-Strike (Valve)
  • Sid Meier’s Civilization V (Firaxis/2K Games)
  • Portal 2 (Valve)
  • Trine and Trine 2 (Frozenbyte)
  • Halfe-Life 2 (Valve)
  • Assassin’s Creed II (Ubisoft)
  • Bastion (Supergiant Games)
  • The list goes on…

It was a huge deal for Mac gaming back in May of 2010 when Valve started offering all of their games for OS X users. I don’t think it’s a coincidence that some companies are starting to offer more Mac ports of their games, including EA.

The article mentions that EA didn’t like it that Valve received a cut of the revenue generated by games distributed through Steam, and would go on to found Origin.com last year as a result. I don’t agree with that – prior to last year, I remember EA executives talking about moving to digital sales, and EA makes much more money by distributing all of their own games than having other distributors like Valve’s Steam. I think Origin.com was going to happen regardless of Steam, and I think EA was going to bring all of its digital distribution in-house at some point. According to a Forbes article, EA is moving towards every EA every game having online components. By driving everything through Origin.com, and by increasing the interaction with social media, EA is hoping that it will drive revenue up quite a bit.

Back to the original story, I’m thankful Valve did not sell out to EA – EA has a well-deserved reputation for buying up competing studios and eventually closing them down/disbanding them (Origin, Maxis which they are trying to revive, Westwood Studios, etc.) and driving famous, well-lved franchises into the ground (Ultima, Wing Commander, Sim City, etc.).


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