Valve founder Steams up D.I.C.E.

Gabe Newell keynote address discusses the company's service-oriented approach, reveals Team Fortress 2 comic being made by the developers.

LAS VEGAS--Each year, the Academy of Interactive Arts and Sciences' D.I.C.E. Summit serves as a more exclusive, more posh brother to the standard stable of gaming conferences. Held at the Red Rock Resort in Las Vegas since last year, the confab's stated goal is to give industry movers and shakers a chance to exchange ideas and examine the latest business trends. It also provides an atmosphere more conducive to schmoozing and networking than the Game Developers Conference and Electronic Entertainment Expo.

This year, D.I.C.E. kicked off with an opening keynote address on "Entertainment as a Service" delivered by Valve Software founder and managing director Gabe Newell. Although Newell's company is highly regarded by gamers for a lineup of hits including Half-Life, Counter-Strike, Half-Life 2, Portal, The Orange Box, and most recently Left 4 Dead, its most significant contribution to the gaming industry has arguably been Steam, the PC digital distribution service. For nearly an hour, Newell spoke to the assembled crowd of industry insiders and media about the sea change Steam--and some of its competitors--is making in the way people buy and sell games.

As an example of providing entertainment as a service, Newell pointed to one of Valve's own online shooters, Team Fortress 2. Newell said the company treated the launch of the product as just the beginning of a long-term service, one that includes not just bug fixes but also extra content for gamers, new achievements, and other perks. Since the game launched in October of 2007, Newell said it has been updated 63 times.

Part of the reason for its success, Newell said, was in the way the game's community has played a key role in shaping the product. Even though those updates were free for PC gamers, the designer said that Valve has still seen them translate directly to revenue in the sales spikes that accompany each significant update. Beyond that, Newell asserted that players have provided invaluable intelligent feedback to help shape the game and have served as evangelists to create new customers out of their friends.

Indeed, Newell said that the best way Valve has found to draw new customers to games is by creating a comprehensive entertainment service approach for existing customers. For example, Valve doles out guest passes to players of games like Team Fortress 2, which they can then give to friends so their friends can download and play the same game for a week. In such a promotion, it's the original customer's interest that his or her friend enjoys the game that helps spark new sales.

When asked by an audience member if he expects console makers to stand in the way of such direct interactions between game makers and consumers, Newell scoffed. That would be as bad an idea as limiting the console to just 2D graphics, Newell said, adding that he cares more about seeing the next-generation systems incorporate the sort of real-time feedback that Steam provides instead of better graphics.

Valve is also taking some business cues from its customers. Just as the customer base told the company what they wanted from Steam when the service launched in 2004, they're helping change the company's direction beyond games today. Newell said the customers want an entertainment company--not a games company--and that Valve has already started taking its first steps down that road with the Team Fortress 2 short videos released to promote the game's different character classes.

There's even a Team Fortress 2 comic in the works, and Newell insisted it will be made by the game's original creators. The Valve founder seemed less than thrilled with previous game-to-comic adaptations, saying this one won't be farmed out "to some third-party hoping to make a quick buck and take advantage of some opening weekend marketing push."

Returning to the subject of Steam, Newell pointed out that it gives Valve nearly instant feedback on who's playing its games, what hardware they're using, how many copies were sold through the service, and how many copies were purchased in stores. That allows Valve to experiment with its pricing and test different approaches with great frequency, something the traditional retail system doesn't allow for.

To prove his point, Newell talked about last weekend's Steam sale, which saw Left 4 Dead available for $25--half its suggested retail value. Sales of the game through Steam were better over the weekend than they were during a holiday sales promotion--or even during the game's launch week. In fact, Left 4 Dead sales were up 3,000 percent for the weekend, while new Steam users jumped 1,600 percent over the company's baseline. Anticipating a retort that sales like that undermine Valve's retail partners, Newell then showed graphs of the average Left 4 Dead weekend sales (as tracked through Steam, which is included in every copy at retail as well) and last weekend's, noting that both were about the same.

The switch from creating entertainment products to providing an entertainment service is a massive transition, Newell said, akin to the movie industry going from VHS to DVD to Netflix, or music jumping from vinyl records to CDs to iTunes downloads. And making the change promises to make companies more money with lower risk.

"We've been through this before, and we're going to go through it again," Newell said, "and I think it's going to be enormously beneficial to everyone in this room."

Check back throughout the rest of the week for GameSpot's ongoing coverage of the D.I.C.E. Summit.

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165 comments
andalore
andalore

I've been with Steam since 2005 and Its always been a source of classic games, and with the recent addition of more classics I hope it adds more of my favourite games in the years to come :)

gearsow
gearsow

gameking5000, what do you mean by saying Steam has too many problems?

martianrobot
martianrobot

Steam is great. It makes old fashioned trains work and lets me know my kettle is boiled when I'm making a cup of tea. It nearly caused London to be destroyed though in the Victorian era - I saw a film about it called Steamboy. It's a true story you know, just like Akira.

martianrobot
martianrobot

[This message was deleted at the request of the original poster]

martianrobot
martianrobot

Half-Life is my life (well, half of it anyway, arf arf) but I think I'm looking forward to the BlackMesa Half-Life remake mod more than Episode 3... though the way things are going I'm not expecting either of these until about 2019. By which time there'll be rogue replicants running around Los Angeles and we'll be getting forcibly shipped out to the off-world colonies.

alyxvance2731
alyxvance2731

I don't game much anymore, but the one game I refuse to give up is the Half-Life series. I can't wait for ep3, but I'm not sure I entirely agree on the Portal Gun... anyway, VALVe pwns!

thenephariouson
thenephariouson

VALVe simply rule, no other games Dev even comes close, they make such exellent quiality games and have a fantasic imagination (PORTAL), always giving gamers what they want, as they know that gamers come first. In my opinion no other FPS comes close to Half Life 2, and simply cant wait for Part 3, i really hope they incorporate the 'Aperature Portal Gun' into it, how much fun would that be?

somestupidloser
somestupidloser

I've been using steam almost since the day it came out. I have hardly ever had a problem with it. It's one of the best innovations I've seen in a long time.

DavidRI
DavidRI

Valve/Steam is da innovative BOMB!! I hope they steer the rest of the gaming industry in their direction and purge the industry of the archaic dinosaurs

DUUUUUUDEn51
DUUUUUUDEn51

aagh! when's a demoman update coming!!!???

Vurtex
Vurtex

And the scout update will be up soon, huzzah!

8smokes
8smokes

This is really great for Valve, and until now, I have never heard of Steam.

Shadow_th
Shadow_th

I'm pretty sure Valve is already working on a new engine already, just as they develop Episode 3. They know Source is aging.

BDL91
BDL91

So sick of hearing console gaming is cheaper because its not , a computer is essential no matter what u need one and for the extra price of a 360 or ps3 + accesories u can get a gaming rig , also games are cheaper.....etc

Vanine_28
Vanine_28

Valve is to good for the PS3..Thats why it on the XBOX360 ..Duuhhh Everyone knows that. keep up the good work GABE !! HAHA

redfrog111
redfrog111

I like steam, its downlode speeds ok it dose the job, a bit more expenseve than shops in the UK at release but when it does offers they are better. If the developers neeed copy protection then this is best, though i still prefer Stardocks aproach. (no DMR). They also make good games.

gameking5000
gameking5000

Valve is the reason I get a notice every 2 weeks say "You have passed your peak download limit". But that's a different story. The thing is about valve is that the games they sell are limited and unusually cheap. It just doesn't feel right.

Justinian103
Justinian103

Valve is the most sophisticated game developer in the industry bar none. They make the most polished intelligent games on the market and have a great corridor in serving their customers with Steam. They really must make other developers blush with envy.

razgriz_101
razgriz_101

i have to admit when it comes to PC games valves are possibly the best, especially HL since it feels built for PC's in general. Also that their games arent always huge behemoth's that demand a pretty high spec computer which is also good :P

Sassal
Sassal

I love PC games over console games because i can tweak the settings to what i want, if thrs a problem i can fix it (and in turn learn more about computers), and i can do a whole lot more stuff on my PC at the same time!

gameking5000
gameking5000

@plrhockey93 That's what happens when you spend too much time on the computer and don't exercise. Wii fit could help him ;) Steam has too many problems to make it a alternative. It's needs a major re-do, I'd say.

plrhockey93
plrhockey93

[This message was deleted at the request of a moderator or administrator]

TurambarGS
TurambarGS

Steam has had its fair share of problems but I guess that's to be expected with a new technology. I think the thing that keeps us coming back to Valve is their attitude: free game content, free auto downloading game patches and they keep adding features and titles to Steam. I can't think of any other company that does that.

d3athcr4ft
d3athcr4ft

@buffdaddy69: "Its called them protecting you. Anyone with a computer can easily hack into you're steam account and get what ever credit card numbers you used to buy games." Well considering I have never once put my credit card number into Steam, I'd say that's not much protection. All of my games were bought at the store, then registered through Steam, with no way to un-register the games from my Steam account. I have zero liability on fraudulent credit card charges, so I really don't care if the number is protected or not. But considering every other online service out there lets you change your login ID, I'd say its pretty crappy of Steam to lock you in. Besides, how does preventing my login ID from being changed protect me in any way? If anything, it would make it easier to hack into my account, since my only recourse would be to change my password, instead of changing both the login ID AND password.

thenephariouson
thenephariouson

Yes that just lovely 'Gabe', im sure a TF2 comic would be just spiffing. Now (big breath) WHERE THE HECK IS HL2 E3??????????? im eagerley awaiting for the first dribbles of news on it!

raptures330
raptures330

@runstalker HL3 = HL2 episodes. So sayeth Valve. "...Valve revealed that the just-released Half-Life 2: Episode 1 and the forthcoming Episodes 2 and 3 will serve as the third game in the series. Rather than make gamers wait another six-plus years for Half-Life 3, the developer thought people might appreciate playing the game in smaller chunks if they didn't have to wait as long...." Just thought I would let you know :) As for PC vs Console: I upgrade my PC once every 3-4 years switching whatever parts are more needed and enjoy those upgrades on more than just gaming. I do not buy any console when it is less than a year old because I find first generation consoles are the mass market prototype and cost way too much at launch. They each have their niche in my life and heart both. I like the mod community in PC and the constant patching and content updates (which are the new big thing in console gaming, DLC, about time!). Also the year of the upgrade is always a sweet year with very high settings on the latest games (never max, max settings are achieved next upgrade cycle) and max settings on my favorite games of the last couple of years. What I love the most about consoles is the ease of gaming. Short boot times, no config stresses, little to no maintenance of the machine itself, little to no installation of games and if the game is online, and last but not least I dont have to be worried someone will steal my cdkey. Also, due to the higher cost of games on consoles the 2nd hand market is my market. I only keep titles which I believe I will play again someday. The rest get recycled to make money to lower the cost of my next game.

junglejim99
junglejim99

I remember when Valve first announced the necessary Steam activation for The Orange Box. I also remember the screaming ("How dare they make me activate my game"), the moaning ("This is an invasion of my privacy"), and the gripping ("I'm never going to buy another game from Valve"). The cacophony almost caused me to not buy the Orange Box. I ended up getting it for a gift and actually contemplated returning it because of the outcry. Luckily the whiners got pushed aside, I installed the Orange Box (along with Steam), and I have since made 14 additional game purchases through Steam (gotta love those weekend sales!!!). Steam is amazing and Gabe Newell had the foresight and fortitude to see past and outlast the bit*hing of those who like nothing better than bit*hing (just look at any forum when the subject of Microsoft is brought up!). Congratulations Gabe and I can hardly wait to see where Steam goes next

WizengamotX
WizengamotX

"There's even a Team Fortress 2 comic in the works, and Newell insisted it will be made by the game's original creators. The Valve founder seemed less than thrilled with previous game-to-comic adaptations, saying this one won't be farmed out 'to some third-party hoping to make a quick buck and take advantage of some opening weekend marketing push.'" Quality--this is what makes Valve Software my favorite electronics company next to Microsoft, hands down.

Pete5506
Pete5506

I think its all goood, people do what they want

plrhockey93
plrhockey93

Can somone introduce me to the whopping good diet that guy is on becuase he is llooken fine!

vietboi89
vietboi89

well if u people want to do this whole pc vs console crap then whatever i dont really care because when a game is good its good and console gaming is cheaper when u think about it and the graphics are good enough for me, i dont really need that whole picture perfect on that tiny monitor when id rather play a game on my big plasma screen, and consoles are mostly for people who play with people without needing to pay for internet like the wii, but everyones got their own thing, but what puzzles me is why people boast graphics for the pc, i mean thats ur pc not that guy or that guy or mommies pc, u cant give a copy of a game to your friend and expect him to have the same MIND BLOWING experience u had with it unless ur willing to lend him ur pc and offer him to over the top pc parts, but hey if u got the money then go for it

Oni
Oni

Steam is fantastic. I will always buy a game from steam rather than a physical copy. Main reason: DRM. Plus, Steam also has these amazing sales! Can't beat that. :)

gamerguy845
gamerguy845

normally i don't agree that valve is "god", but i have to say that this article showed they are a great, dedicated gaming company.

Ledoubleu
Ledoubleu

I have a PS3 also but mostly because it's a Blu-Ray. I like it well enough but wouldn't have bought it if it wasn't bundled with my Sony TV. I do have a couple of games for it though, I occasionally view Hulu on it and streamed vid, music and podcast from my pc but mostly I just use it for movies. Gaming, well I stick to the PC, after all - Starcraft 2 and Warhammer 2 will be available on only one platform. Anyway, shouldn't have spouted off earlier and I apologize for that.

rktSNSdurnt
rktSNSdurnt

Normally I'd be a little annoyed when I see a $50 game I just bought get slashed down half price. However, when it comes to quality games with quality developers, I know my money was well spent.

guardofdead
guardofdead

Ledoubleu Posted Feb 19, 2009 10:36 pm GMT OK Mr console fan-boy owner, (25 years worth of gaming as stated below). Hmm, last time I checked I believe you still need to have a PC for email, home office apps etc, not to mention posting on these very boards (do that from your PS3 heh) ____________________________________________ i can do all of that on my ps3, and some with out linux installed, and im on my ps3 right now posting this very message, basically what im saying is that my ps3 is also a computer, yes it has its limits because sony has locked some hardware... ( grrrr) but i cant still do all that stuff your computer can do.....

NR1224
NR1224

Alright, my 2 cents: Both the PC and console come up in a pretty even draw across most levels. PC's are more expensive, both with consoles you've got accessories, etc. For me at least, the real difference is in controls, game selection, and community. Keyboard and mouse are more precise. Maybe not better, but more precise. End of story. I prefer the game selection on PC's better, if only because most are extended with mods and other content. But most importantly, I prefer the PC gaming community, because it is mostly made up of more mature players who built their equipment with their own hands, or at least earned the money for one, vs. your average console gamer, whose mommy and daddy bought them everything(including those dam mics). Just preference, that's all...

da_odd
da_odd

Yes, a P.C. can pump out much better graphics than a console. If you're willing to pay more than $600 for it. Yes, a mouse/keyboard setup is much more precise. If you're willing to master it. I'm lazy and poor, so i'll take my $150 used 360 with it's easy-to-learn gamepad and inferior graphics anyday. At least I don't have to upgrade the thing every year to be able to run a new-release. Seriously, my p.c. was top of the line in like, 2003, and as soon as i found out that i had to upgrade that thing to play something from a year later, I was like "screw it back to gamecube...."

Ledoubleu
Ledoubleu

OK Mr console fan-boy owner, (25 years worth of gaming as stated below). Hmm, last time I checked I believe you still need to have a PC for email, home office apps etc, not to mention posting on these very boards (do that from your PS3 heh). Take my machine for instance, not only a KA gaming machine it's also a DVR/Media server. I use it to work from home occasionally also. My brother bought an HP machine off the shelf for less than $750.00 and has similar capability's as mine (no graphics upgrade yet). How much do I love Steam? Tons, I always check the weekend sales and have bought many many games. I also check GFW and a few others but Steam is best. My Steam account follows me wherever I want to go and no discs needed, just log in anywhere and do a little DL and your games are with you ready to play on a capable machine. Not to mention that new PC games are $10.00 to $20.00 or better cheaper than console. I have an Xbox 360 wired controller for Windows if I want to play console style games too. Bigger bang for the buck? Yeah I'm in "it" and "It" ain't going anywhere for a long time!

Owner34
Owner34

Valve is very kind to its community. I think Gabe Newell is very cool because of the way he runs the company.

IndianaJosh
IndianaJosh

@da1writer 1) DDR2 is in no way obsolete, and there is no reason to upgrade to a DDR3 motherboard at this time. 2) The Orange Box does not look as good on consoles, TF2 in particular has significantly worse character and environment textures and a lack of anti-aliasing. 3) PS3 has support for mouse, but without any of the sensitivity that you would expect on the PC, so it's basically useless. 4) I've bought 70 games on Steam this year alone, and with the number of Steam users increasing 100% every year, there are a lot of people in my same shoes too.

Dante2710
Dante2710

Valve is awesome, nothing new

smitty5000
smitty5000

I really prefer this method of increasing sales, you wind up with a product that is always getting better.Or you could take the Activision approach and simply put out a slightly better version of the same game out every year and expect full price for it again. Valve is run by gamers for gamers.

da1writer
da1writer

@runstalker: I agree with what you just said also, at least you can as well when it comes to certain games on consoles ;)!

runstalker
runstalker

Without any PC 'leetness, I can honestly say the FPS experience is fundamentally superior on PC. So in those cases, I'm always selecting the PC version over console. On the other hand, I'm obliged to adopt console controls for games like GoW 2 and Resistance 2, because that sh!t must be played.

jev55_basic
jev55_basic

PS. Someone who is a PC gamer only, name more than 5 FPS PC games that have come out in the last year that aren't also available on consoles......I can name 5 for the PS3/Xbox360.

runstalker
runstalker

You look at Left 4 Dead and the tweaks to lighting, character animations, etc. -- they've pushed good 'ole Source about as far as it's going to go. I look forward to the rumored all-new Source 2 introduction that's supposed to come with Half-Life 3. But yeah, we're supposed to get an HL 2 ep.3 on current tech before that arrives... maybe they've moved all those resources to HL3.

jev55_basic
jev55_basic

"most of us pc users have already bought our rigs a long time ago. so really we only spend around $300 for a new card and other things at the arrival of the next generation of gaming. This is all while you console gamers spend 400-600 dollars when the new platform is introduced." Most console gamers agree that anything over $400 is too much for a console. Also you spent probably $2000 on that original gaming rig. That's FIVE game consoles......25 years worth of gaming. Hmmm.....the PC graphics aren't that much better when you think about it in that perspective.