Valve's domination of digital distribution dangerous - Gearbox CEO

Randy Pitchford says Steam creates "conflict of interest" and exploits smaller developers due to lack of competition.

Gearbox Software got its start in the industry back in 1999 working hand-in-hand with Valve, creating add-ons for the Bellevue, Washington-based developer's influential Half-Life series. Still, despite those beginnings, Gearbox president and CEO Randy Pitchford is wary of the control his former associate has on the future of digital distribution, itself considered by many to be the future of the game industry.

Randy Pitchford

In an interview with Maximum PC, Pitchford addressed the benefits of downloadable game services such as Steam, saying that it would be dangerous to let Valve run away with the digital distribution business.

"Steam helps. As a guy in this industry though, I don't trust Valve," Pitchford said, noting that his misgivings arise from the fact that Valve directly competes with Gearbox in the first-person shooter genre. He continued, "I, personally, trust Valve. But I'm just saying, honestly, I think a lot of the industry doesn't."

Pitchford went on to note that his concerns would be assuaged were Valve to spin off Steam into its own business entity. "There's so much conflict of interest there that it's horrid," he said. "It's actually really, really dangerous for the rest of the industry to allow Valve to win. I love Valve games, and I do business with the company. But, I'm just saying, Steam isn't the answer."

"Steam helps us as customers, but it's also a money grab, and Valve is exploiting a lot of people in a way that's not totally fair," he continued. "Valve is taking a larger share than it should for the service it's providing. It's exploiting a lot of small guys. For us big guys, we're going to sell the units and it will be fine."

While Valve is the preeminent player in PC game distribution, Steam does have a number of competitors. Namely, Stardock operates the Impulse downloadable game service, and publishers such as Electronic Arts often distribute PC titles through their own Web sites. Valve had not responded to requests for comment concerning Pitchford's statements as of press time.

193 Comments

  • Search_for_Vali

    Posted Nov 22, 2009 1:53 am PT

    I would like to hear some news from Valve regarding their games not their services. When was the last time, some information surfaced about Portal 2, Episode 3, Half Life 3 maybe or some new IP. I am sorry, but as for now, Valve is no longer a game developer, it is just a greedy small business company competing with the likes of Gamestop. And L4D2 was a f****** bad move. I bought it, but with the fear, that we will see next year L4D3 and than they are going to change it to L4D2011, 2012 and voila Valve has its own cheap way of milking the consumer for some cash.

    Because right now, that is all they do, milking. I wouldn't mind, if they would blow my mind with the next big shooter or game experience, that will revolutionize the genre. But with only L4D2, I am not as impressed about them, as I was once, when it was all about the gaming.

  • KoRniTo

    Posted Oct 29, 2009 3:46 am PT

    Give props to Valve, they did an amazing job with Steam. With over 20 million registered users, it's pretty damn taking over the industry through their great work.

  • Hevon_V48

    Posted Oct 24, 2009 4:59 pm PT

    valve created the best software for this kind of thing. Steam is much more better than game for windows live man! so steam still be the best way of it.

  • Yokuz1166

    Posted Oct 16, 2009 1:50 pm PT

    This is another example of hard work creating something successful, and the people that were late to the punch get left out so they whine. Who says that no other company can compete with Valve's Steam? Who says that they can't make a software game distributor? Valve did a great job with a project and this guy doesn't like it? It's called success through hard work.

  • Circlestrafe

    Posted Oct 14, 2009 2:08 pm PT

    How is it exploiting the smaller guys, when in fact, it gets them on the map? It's an excellent marketing opportunity for the little guys. For starters, talk to the guy behind Audiosurf and the two guys who developed World of Goo. I'm sure there are a LOT more who will embrace Steam as a way to get their software noticed, purchased, and played.

  • djpetitte

    Posted Oct 14, 2009 11:00 am PT

    Steam/Valve- The Walmart of gaming. You just have to shop there.

  • Duy_the_turtle

    Posted Oct 13, 2009 7:50 pm PT

    Steam sells their competitors' games as well as small developers' games. If you read other articles on this like on N4G.com the article give the other point of view. World of Goo developers stated that Steam gave them a good share of the profit, so maybe Pitchford is just a little greedy.

  • Inconnux

    Posted Oct 13, 2009 10:37 am PT

    I buy all my games through steam now... I know it is a form of copy protection, but it is not intrusive like Securom. The problem with other Digital distribution sites is that they still include other forms of DRM. Steam rarely does, and if it does, they warn you before hand. If Gearbox doesn't like the steam setup, they can always start up their own competitive service... remember that Valve was a small developer when it started the steam service.

  • vicsrealms

    Posted Oct 13, 2009 10:37 am PT

    Oops, it either cut off the ~grin~ or it didn't make it. Sorry, ladies and gentlemen it was supposed to be a bit of sarcasm to @fps_d0minat0r comments that didn't make it in. It would be like saying the only true hardcore gamers were pen-n-paper gamers.

  • bennae66

    Posted Oct 12, 2009 11:16 pm PT

    @fps_d0minat0r pc gaming isnt quite a joke, but its getting close. i much perfer my games operated from a couch

  • bennae66

    Posted Oct 12, 2009 11:13 pm PT

    @vicsrealms if thinking that makes you happy then continue thinking that.

  • Javieralijandro

    Posted Oct 12, 2009 6:20 pm PT

    Yes, there goes my favorite ps3 dev.
    Go Valve!!!

  • zaphod_b

    Posted Oct 12, 2009 12:06 pm PT

    Oh gee, wait. I figured it out. Direct2Drive is owned by IGN and Gamespot's digital distribution was a flop. No wonder it doesn't get a mention.

  • zaphod_b

    Posted Oct 12, 2009 12:04 pm PT

    I actually think Direct2Drive is pretty good, and they don't even get a mention here.

    @fps_d0minat0r and @vicsrealms:

    It's a gaming platform, guys. Get over yourselves.

  • vicsrealms

    Posted Oct 12, 2009 11:50 am PT

    Well, I sort of have a love/hate relationship with valve right now. I love their Half Life games, but I hate them for making me wait this long for Half-Life 2 Episode 3. Thank goodness for FakFactory CM10!!!

    @fps_d0minat0r

    The only true hardcore gamers are PC gamers. ~grin~
    -----
    Edited for missing sarcasm.

  • fps_d0minat0r posted Oct 12, 2009 11:32 am PT (does not meet display criteria. sign in to show)

    fps_d0minat0r

    Posted Oct 12, 2009 11:32 am PT (hide)

    pfffft PC gaming, what a joke.

  • payne6705

    Posted Oct 12, 2009 11:04 am PT

    so he hates valve or likes them? he says he doesn't like them or trust them and turns around and says I like em and I trust em....huh? it sounds like there is a little bad blood between valve and him also most of the independant games on steam are dirt cheap (10-15 dollars) how much is steam taking that would effect the independant companies?

  • partytimekegs

    Posted Oct 12, 2009 10:26 am PT

    I wish Steam would have the ability to register/activate non-Valve games via a CD-key on Steam so I don't have to keep up with CD's. >

  • remysola

    Posted Oct 12, 2009 8:27 am PT

    Taken from Games for windows forums:
    'Small developer' responds to Randy's Steam comments:

    http://news.bigdownload.com/2009/10/10/tripwire-interactive-head-doesnt-feel-exploited-by-valve-or-ste/

  • brian_13un

    Posted Oct 12, 2009 7:11 am PT

    Looking forward to you guys ^_^

  • Dante2710

    Posted Oct 12, 2009 6:23 am PT

    @Shiftfallout, you are forgetting that Valve is a very small group of developers, yet they still managed to pull out AAA; if their concept has paid off to them (which certainly has) why change it? if it isnt broken, dont fix it.

  • Shiftfallout

    Posted Oct 12, 2009 5:22 am PT

    @bennae66, it is amazing how one running joke about "cake" at digipen could turn into a phenomenon. Thats where it all started, one student, one cake, one school and a game the students made called Portal. @Dante2710, Valve is different. Their games certainly are good however their difference comes from how they structure the company. At Valve, everyone is on the same level, there is no major heirchy of positions. An entry level level designer would be on the "level" as the lead. Everyone has equal input and is left to do their own thing. The concept is good, almost "moral" in a way, but is it really good for the type of business they are running now? That being a publisher and AAA game developer.

  • bennae66

    Posted Oct 12, 2009 3:44 am PT

    one thing though: portal changed my life. the cake was a lie they say. how can that be true?? the nice human robot female voice thingy (glados to some) told me there would be cake. perhaps instead of arguing on steam (which i still dont like) maybe we should be trying to clarify the launch date of said cake. surely its in a viral marketing website hidden somewhere in numbers. my money is that the cake will launch in the holiday period just before christmas, because thats when all the good stuff comes out (except fro dragon age and borderlands) but noone has been told what type of cake it will be? well we have got a hint already that the cake will have 3 layers plus icing... look closer and perhaps the truth will be revealed... its delicious and moist, possibly a mudcake. id like to think it will be chocolate, but that is mere speculation. i asked MS what they thought and they told me they wont comment on rumors or speculation. i asked Sony and they told me it would be incredible. i asked Nvidia and they told me thats the way cake is meant to be eaten... i asked Randy (above) and he got really excited about the cake. conspiracy?

  • Dante2710

    Posted Oct 12, 2009 2:48 am PT

    valve is one of the best devs on the pc, this guy is saying nothing but bs.

  • bennae66

    Posted Oct 12, 2009 1:06 am PT

    @bowlingotter how does it feel being proven wrong? hey its all good, baby. i readily admit im not a massive pc gamer (is that perhaps why you were so snide in your response?) i prefer my console. all is good, people are human and ive made a mistake i will own up to it like a man. like i said, all good. let the forum hear my voice: i made a mistake, and i wont shrivel from it, and i will learn from the experience. from years of posting on gamespot, its about time i said something inaccurate. my track record is not that bad, so im not fussed. good day to you, sir. your excretement doesnt stink, and i applaud you for it.

  • bennae66

    Posted Oct 12, 2009 1:01 am PT

    @naomha1 cheers for the clarification. i still dont like steam, but i feel a little more comfortable knowing thats its not all bad. the community is good.

  • cowmaster2k3

    Posted Oct 11, 2009 8:53 pm PT

    steam is awesome, valve is awesome. Possibly the best video game company out there

  • npkgardens

    Posted Oct 11, 2009 8:49 pm PT

    I will take Steam over GFWL any day (I have used both). Sure the competition works out being good for the customer (usually), but GFWL can't hold a candle to Steam. And I also like that Steam is PC-centric, since I own neither a console nor a TV.

  • Joesocwork

    Posted Oct 11, 2009 6:34 pm PT

    I still like my sales (unless it really will blow the little guy out of the water). My one quibble, and I presume it's the anti-piracy thing, is that at least Steam only operates on one computer at a time per account. I buy a fair amount of games for both me and my children such as Braid and World of Goo, in addition to my own adult games like Assassin's Creed and Oblivion. It is annoying to not being able to play the games on both of our computers at the same time. I really don't want to set a second account and buy the games all over again.

    Annnd, I'm mad myself for missing Dawn of Discovery for $25 a few weekends ago on Impuse!

  • iisl33t

    Posted Oct 11, 2009 4:53 pm PT

    Honestly, Valve's games, to me, are great. The actual company, however, come off to me as manipulative bastards who let all their popularity get to their heads.

    Now, I'm not saying I hate Valve, I'm just saying they don't appear the kindest of people to me. They are a big, powerful industry, and it definitely seems they put money and players who are willing to spend it far ahead of average gamers.

    That was the problem - is the problem - with Left 4 Dead 2. Original L4D players were promised more free content, which Valve is known for giving. How much of this content was actually given? Two major updates, I've counted. And already they are releasing Left 4 Dead 2. Of course, they are more than doubling the features content-wise, but still, they didn't wait long enough to let players build up their wallets readily for a second game.

    Short version: Valve makes great games. But they are not number one on my list of trusted developers. What Randy Pitchford said, I agree.

  • sonicmask

    Posted Oct 11, 2009 4:12 pm PT

    HE MAYBE RIGHT BUT NO ONE DOES IT BETTER THEN VALVE!

  • electroban

    Posted Oct 11, 2009 7:41 am PT

    If the steam system was better, then it would be ok, and that if it just literally was a place to just host games from, not try and cross sell me with lots of adverts.

  • MetallicFPSNut

    Posted Oct 11, 2009 7:39 am PT

    @noodles297

    That's the exact same thing for me. I love having a solid copy of my games. The biggest issue is that if the storage medium fails, there goes my money. But also, they can easily remote-delete anything you download, or otherwise corrupt it to keep you from playing.

  • FlashCharge

    Posted Oct 11, 2009 7:20 am PT

    I agree with noodles297 that digital distribution is not all that great. I also am a gamer that likes the real software thing.

  • noodles297

    Posted Oct 11, 2009 4:23 am PT

    I hate digital distribution anyway. A game would have to be near at least half the price of a retail copy for me to buy it. Not because I think thats a fair price but because I just can't stand the idea of having just a piece of software and no box, manual, or disc. Games for me are like a collectors type of thing.

  • Humorguy_basic

    Posted Oct 11, 2009 3:14 am PT

    Gamers are happy to talk about things they no nothing about. Do you know Steam charges for making patches,etc available after number 5? So release a 3 patches, and expansion and a patch for the expansion and everything will be charged thereafter.

    Also,for smaller companies, the publishers get to keep as little as 30%.

    Steam have already shown they are taking advantage of their near monopoly, and there is a reason they are so disliked around the gaming industry. Steo back and think about it without getting emotional. Valve started the all the horse armor for $5 and 10 hour gameplay games like Dead Space when it released the 5 hour gameplay Half Life 2 EP1 with a retail price of $20 in the U.S. and $30 in the UK. Iam not saying HL2 is not a good game or anything, I am just saying step back and realise how Valve operate.

    Let's face it, if gamers weren't so gullible we wouldn't get the crap released that we do, DRM would never have been allowed to happen and we wouldn't have let the market end up the way it is with a biased media, no innovation and a publisher like Valve being able to be a retailer too. A very dangerous thing for PC gaming

  • usule

    Posted Oct 11, 2009 12:07 am PT

    My problem is that I just like Valve too much... They have never disappointed... Love half-life, portal, team fortress, counterstrike, left 4 dead, and yep, I really like steam too...

  • PublicNuisance

    Posted Oct 11, 2009 12:06 am PT

    I trust Valve right now more than this guys company. I don't see Valve delaying the PC version of their games by a week with no explanation.

  • trastamad03

    Posted Oct 10, 2009 11:55 pm PT

    well said Remysola! thumbs up!

  • remysola

    Posted Oct 10, 2009 8:35 pm PT

    The reason why I like Valve is that they still belive in the PC

  • electroban

    Posted Oct 10, 2009 6:14 pm PT

    What he's trying to say, Steam/Valve are used by ALOT of users, and that because Steam uses such a platform it can easily market Valve games. It's the reason why Left4Dead got so popular, it's pumped out via Steam. When Steam was first released to handle Counterstrike everyone seriously hated it. Also you can't block people on your friends list without appearing offline to all your friends.

  • XIntoTheBlue

    Posted Oct 10, 2009 1:59 pm PT

    Giant11, D2D definitely had some good deals lately with their $5 games. But the downside to D2D? I can't purchase a lot of their games for being in Germany. When I tried to take advantage of their deals and found out that the games I wanted was sold only in North America, I pretty much turned my back on D2D.

  • metalkid9

    Posted Oct 10, 2009 1:26 pm PT

    Steam is also probably the most successful digital distribution system. Theyre the grand daddy of em all. STEAM FTW!!!

  • metalkid9

    Posted Oct 10, 2009 1:24 pm PT

    At first he contradicts himself then he says they have too much share. Someone seems to be jealous. Seriously Pitchford, you make no sense. Oh and Steam is awesome. Everyone loves it including me.

  • Joshua250

    Posted Oct 10, 2009 10:43 am PT

    The Steam prices are competitive for retail games that aren't new. The sheer amount of packs containing hard to find games for cheap are truly amazing. Secondly, the majority of other services for downloading games suck. Steam does have its quirks at times but those are usually quickly sorted out.

  • giant11

    Posted Oct 10, 2009 8:50 am PT

    Steam is great and I've been using it nonstop. However, it's prices are very unimpressive. They're usually no different from retail. Also, consider the $5/game sale on Direct2Drive over the last few weeks. There really isn't anything like that on Steam.

  • talonslash

    Posted Oct 10, 2009 8:08 am PT

    I use steam and found it very handy. You can make backup copies of the games you download to disc by the way, but true that it's merely a backup and I think you should be able to play without having to login.. The major point I see here is if Valve were to release a new game and charge significantly lower against a current competing title unfairly in order to suay customers to buy their game as oppose to a competing title. I have not seen this happen mind you, but I think that's really the major point that was being made from my perspective.

  • Richterman

    Posted Oct 10, 2009 8:03 am PT

    I like how from his perspective of Steam being his competitor he does not trust the service. On the otherhand though, he personally trusts it. Conflict of interest?

    Personally, I don't know the percentages when it comes down distributing money between Steam and a small time developer but what I can say is that it is not always a bad thing. For example, look at Mount and Blade. Indie game that becomes available on the service which one cannot deny increased it's popularity. In the past year the game was picked up by a publisher Paradox Interactive and the expansion will feature multiplayer and improved graphics.

    Personally, I'm for online distributors because it gives gamers more access to more obscure games.

    @Humorguy basic - What makes Steam's DRM system so troublesome? If you purchase from Steam you already garnish a right to use the game you download. No conflict. Additionally, you can play your games in offline mode, say you moved and didn't have an ISP at the moment. Not a conflict.

    What is so troublesome about that?

  • evaneself

    Posted Oct 10, 2009 7:31 am PT

    I have all the Valve's Half-Life and Counter-Strike, and that because there was not otherwise, without Steam. But I will never buy a game that is not mine after I bought, which allowed someone to give me permission to play when I want. It's silly. I do not want to ever tell me that a server is busy when I want to play something. What's the difference if you download a torrent or on Steam? Both not mine, my closet is empty, I have no DVD case, finally I have nothing after the server died. I am for traditional sales, without DRM. Piracy has been and will always exist, and if we continue with the DRM crap, I collect movies on Blu-ray. I did not need votes, is just my opinion.

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