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Randy Pitchford, Steam, and Conflicts of Interest; or, Getting one’s bottom covered before the regulatory commissions come calling.

with 3 comments

So Randy Pitchford of Gearbox Software (who I’m inclined to be nice to, what with his being in Texas, like me), has been popping up all over the place lately to market his studio’s upcoming game, Borderlands. He’s raised some eyebrows before, but today he’s been making the rounds on the Internet over comments he made about Valve and its pet colossus, the Steam distribution service.

A shooter in bright colors? Say it ain't so!

A shooter in bright colors? Say it ain't so!

Yesterday, MaximumPC published an interview with Pitchford about Borderlands which quickly turned into a very decent interview about the state of PC gaming, and of gaming in general. Following directly after a discussion on the difficulty of controlling piracy, and how difficult it is to sell and release PC games, the following exchange occurred between MPC and Pitchford:

MaximumPC: The download services, like Steam, are helping make it easier to buy games though, right?

Randy Pitchford: I’ll tell you what. Steam helps. As a guy in this industry though, I don’t trust Valve.

MPC: Because they’re competitors?

RP: Right.

MPC: You guys have worked with them a lot!

RP: I know. And I, personally, trust Valve. But I’m just saying, honestly, I think a lot of the industry doesn’t.

MPC: So you think Valve should spin off Steam?

RP: They should! It would be much better if Steam was its own business. There’s so much conflict of interest there that it’s horrid. 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. Valve is taking a larger share than it should for the service its 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.”

If you can past the confusion about “trust vs. not trust vs. banana nut bread,” (it makes more sense if you read it out loud), you’re left with a relatively interesting point about Steam: namely, for Valve, it’s a legal headache waiting to happen. Honestly, it’s a bit surprising there hasn’t been any sort of sinister government noises directed towards Valve so far, considering they’re having to balance interests as a private developer and as a distributor for both their own games and their competitors’.

For those who don’t know, Valve does not allow developers to put their games on Steam out of the goodness of its heart. Rather, for every time a customer purchases a game through their service, Valve takes a cut of that customer’s money before it reaches the developer. Now that’s perfectly fine: it’s capitalism after all, and I’m not about to ask Valve to be charitable with a service that must require an inordinate amount of bandwidth and server space to operate.

No, the the biggest problem I can see for Valve is this “conflict of interest” issue. I’m not going to pretend thatI have a perfect understanding of copyright and anti-trust and insider-trading law, but I will pretend that I know what I’m talking about when I say that if a company has the ability to sabatoge a competitor’s product, or when the company gets a better deal than its competitors on a service that has become something like integral to those competitors’ industry, then someone is eventually going to get pissy enough to call in the US Cavary of Private Business Interference in the form of the FCC or the CIA or the IRA or whoever, and then I’ll be stuck not knowing who to support in the issue. On the one hand, you have Valve, which has created a service that is not only revolutionary, but consistently stellar; it has its irritating quirks but all that’s balanced by some really incredible innovation and the glistening level of polish we’ve all come to know and love about the company and its games. And speaking of games, this is Valve, the people who made Portal AND Left 4 Dead AND, you know, Half-Life; put simply, some of the best games we’ve ever had the privilege of playing.

But on the other hand, you do have some icky business issues to deal with. It could be argued that because Steam is now such a major part of the PC market, Valve’s ability to post games on the service, effectively for free, is unfair to all of the other publishers who have to lose a cut of their sales from it. You could make a decent case in saying that Valve was perpetrating  foul play or insider trading or extortion or incest or something, and if it’s all coming up on election time we could see some ugly repercussions to that, like seeing Steam torn apart into its own competition, Bell Telephone-style.

It's pretty indeed! Oh, a shooter you actually WANT to look at!

It's pretty indeed! Oh, a shooter you actually WANT to look at!

I don’t know if I would really be able to pursue Valve down this track with my heart in it though: I mean, they made the best content distribution services in the industry, they convinced multiple competing publishers to support the service while simultaneously giving the players a very fair deal (ie, owning what you purchased for all eternity) in an industry known for downright evil practices (ie, you own what you purchased for as long as we still find you pretty.)  I mean, if they put all that work into their product, then that means they wrote their own rules, and if you don’t like it you can go buy your product from some other near-monopoly, like GameStop or Amazon, or even some of the instant-download competition like Direct2Drive. But I imagine there are many lawyers and politicians who would happily try to tear Valve apart, and I hope Valve know that.

Really though,  it probably wouldn’t make that much of a difference if Steam was spun off as a separate company or not. Unless Valve completely transferred the holdings of the service over to another corporation (Pitchford suggested Microsoft, but by that point he seemed to be thinking out loud, and I hope he wasn’t serious because I’d rather not see us dragged back to the stone age), that money is going to stay in-house anyway, just with different logos on the checks. And maybe Valve already is aware all of these risks already have the issue covered; something tells me that this is the case – Valve is not composed of idiots. And on a closing note, I don’t believe it is composed of bad people either. Pitchford paints them as money-grabbers, and I know many indie devs say that Valve’s price cut is too harsh (which maybe it is, but maybe the indies are getting a better deal and still aren’t happy; I don’t have enough evidence to go on. It is possible that I only believe Valve is good because it give us gamers such an honest, common-sense, why does nobody else give us this kind of deal in their services, service, and Gabe Newell just always seems so happy. He’s like a teddy bear you really would love to hug, or play Left 4 Dead with.


Written by johnfram

October 8, 2009 at 7:54 pm

3 Responses

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  1. This is a double sided issue, but I’m for the way things currently are. There are two options in this circumstance… to keep Valve a part of Steam, which while still a business, keeps the controls in the hands of a GAME DEVELOPER (who are by default gamers)… or sell it off and into the hands of a 3rd party who is (in a perfect world) disassociated with all game developers and publishing companies.. and have a service that is then run more by straight business men and marketing guys.

    STEAM is so good because it is run by a Game Dev / Gamers. They know exactly what a gamer wants, and deliver it in spades. It blows every other service out of the water… from GFW to D2D and even Stardock (who has their own similar service selling their games and others).

    Currently we are in a landscape of small competition and a monopoly has not come into play in Digital Distribution. This is the perfect place to be, as competition clearly drives each service to perfect itself, while the smaller guys still have a chance of surviving and overtaking others. I think if valve did separate from Steam, it would be able to further monopolize the industry, but not in a way that would benefit gamers and developers as much. I’d personally prefer a monopoly run by Valve than anyone else.


    October 9, 2009 at 11:37 am

  2. That’s very true: the thought of Steam in the hands of, say, Activision, is terrifying. And really, I don’t think there’s anything for Valve to really be worried about: there’s enough competition doing well enough to avoid calling Valve a complete monopoly. And yeah, Valve would probably be the best autocrat we could ask for.

    My one concern on that note however, is simply that power always corrupts; I wonder how long Valve can remain semi-perfect with so much power in their hands. I may just be being romantic, but something as big as Steam could be thoroughly buggered in nanoseconds if some moron were to take the reigns, and that would be a real shame, because nothing else can even compare.


    October 9, 2009 at 9:41 pm

  3. Ya. You’re right. That’s why right now is that time of ‘delicate balance’. It’s not meant to last long. We can only hope that when it does end, it doesn’t take with it the insane amount of options we currently have. It won’t though, I don’t think. The internet has forever opened the door for the smaller guys to get a chance, even if it becomes difficult for them to profit outright.


    October 10, 2009 at 9:06 am

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