Should Valve spin off its Steam service into its own company?

Posted Sep 21st 2009 6:00PM by John Callaham
Filed under: Biz, Downloads

Valve launched its Steam download service with the release of its own game Half-Life 2 nearly five years ago. Since then the service has grown into one of the biggest, if not the biggest, service to download and purchase full PC games. It has hundreds of titles available from nearly every major PC publisher and has also opened up its service for independent game developers to offer their games via Steam. It has changed the way PC games are sold and, along with similar services, is slowly moving the PC game industry away from the brick-and-mortar retail store model.

But Valve is also a successful game developer and also sells its Source engine for third party developers to use. Does Valve's ownership of Steam ultimately become a problem for the PC game industry? Gearbox Software CEO Randy Pitchford seems to think so. In a new interview with Pitchford for the November 2009 issue of the Maximum PC print magazine (now on newsstands), Pitchford says,"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."

In fact, developer/publisher Paradox Interactive did exactly that when launched its GamersGate PC game download service in 2006 and in 2008 spun off the that business into its own company. Stardock, yet another PC game developer/publisher, runs the Impulse PC download service that offers games from third parties.

Pitchford also believes that " . . . 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 it's providing. It's exploiting a lot of small guys." We've emailed Valve to see if they wish to respond to Pitchford's comments but so far have yet to hear back.

Tags: gamersgate, gearbox-software, impulse, maximum-pc, paradox-interactive, randy-pitchford, stardock, steam, valve, valve-software

Reader Comments (Page 1 of 1)

Man I feel like I'm reading Atlus Shrugged all over again. I don't know anything that is behind the scenes that Randy could be talking about, but to punish Valve for making a system and bringing it to an absolute phenomenal height shouldn't be for them to blame. Hell, back when it first launched, people hated it so much but they stuck with it. They refined it with user feedback and created what it is today. There are other services to go too, and they are profitable. It is not Valve's fault that its service is basically number one on the PC market right now. Hell, they are about some of the only ones (Stardock in there also) that even give a damn about the PC market right now.Posted at 6:58PM on Sep 21st 2009 by sicsided

Imagine if Valve split a team off just to run Steam. Other publishers would instantly be that much more inclined to peddle their wares on the service because it doesn't directly benefit a competitor.

Also, Ayn Rand is complete crap, get over it.Posted at 7:12PM on Sep 21st 2009 by Jose

Opinion in tastes mate.

Publishers right now don't know what the hell their consumers want. Look at Activision. As far as I see it, a smart company running a great service should keep running it.Posted at 7:52PM on Sep 21st 2009 by sicsided

I think it could be a good idea.

It would definitely let the service progress at a faster rate. Honestly, I don't think Steam is pushing out enough features fast enough.Posted at 9:14PM on Sep 21st 2009 by Einhanderkiller

The converse to the problem you mentioned, Einhanderkiller, is that Valve isn't putting out games fast enough (HL2:Ep3 still MIA).

I might love Steam, but that doesn't mean that I don't have my criticisms. I don't like playing RF: Guerrilla and seeing an overlay for Steam AND a GFWL. Perhaps MS wouldn't be so inclined to push their own service if the current one wasn't owned by a direct competitor in their preferred genres (shooters). They've been known to pull this before, with IE bundled in Windows, with Windows itself, with HD-DVD, and I could go on and on, but still just hypothetically.

What the hell does "Opinion in tastes" mean? It means your book is crappy, because if I'm addressing your statement correctly: My opinion is that I have very good taste, and Ayn Rand is tripe.Posted at 9:47PM on Sep 21st 2009 by Jose

Hey, if there was one company I'd have to be exploited by, it would probably be Valve. They seem to be one of the few major game companies that actually really put a lot of effort into connecting with and appeasing their fans.Posted at 10:07PM on Sep 21st 2009 by Gastrodon

Publishers are kinda insecure. So they have such ideas of conflict of interest. This conflict of interest doesn't affect consumers frankly. They are afraid only Valve games sell better on it.

But on the other hand, if making Steam it's own company means improvement to the service as a whole, then I'm all for it. Let Valve decide when they want to do that.Posted at 12:04AM on Sep 23rd 2009 by frags

Well, Randy Pitchford sounds like a really bitter man. He probably hasn't heard of the phrase "Don't bite the hand that feeds you." In this case "fed" since it was Valve that took a chance on Gearbox to make the original Half-Life expansions.

Steam is primarily a way for Valve to keep their games up-to-date and keep track of the community. The fact that they have allowed others to come in and use it is a favor Valve has done to the industry. And it is often mentioned that 3rd parties get a higher profit margin on Steam than at retail.

Moreover, there are other alternatives already out. D2D being the most successful. What Mr. Pitchford forgets is that Steam didn't become number one by standing still. Their support and features is unmatched by any other competing product.

Lastly, if I remember correctly, it was Valve that asked Microsoft to create something like Steam within Windows, to keep track of games and update them automatically. Microsoft ignored the suggestion and rest is history.Posted at 11:39PM on Sep 21st 2009 by Jose

Wow, didn't know we had an episode of Formidable Opponent going here...Posted at 11:51PM on Sep 21st 2009 by Jose

Jose (2, 5, 8) is a Spy.Posted at 12:32AM on Sep 22nd 2009 by Jose

" . . . 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 it's providing. It's exploiting a lot of small guys."

Are they charging that much more than Impulse or Gamersgate? If not, then thats not exploitation, its market value. Plus seeing as smaller developers only get about 12 - 13% of the money made from retail, its odd that steam would be targeted for being unfair.Posted at 10:29AM on Sep 22nd 2009 by Solice

"Lastly, if I remember correctly, it was Valve that asked Microsoft to create something like Steam within Windows, to keep track of games and update them automatically. Microsoft ignored the suggestion and rest is history."

The problem is that MS now has a service, that isn't very good, and they're still pushing it just to stay competitive with Valve's service. You still can't get Halo 2 or Gears of War on Steam, and I bet if it wasn't owned and operated by Valve, you would.Posted at 3:21PM on Sep 22nd 2009 by Jose (The Spy)

Since we have already different competitos, like Direct Drive (I just got Bioshock for 5€) and even GFWL, I don't think we need Valve to spin off Steam, as long as there's good, healthy competition.Posted at 9:57AM on Sep 28th 2009 by Quijote3000