We ask Gabe Newell about piracy, DRM and Episode Three

Tom Francis at

Gabe Newell 6

I was at Valve last month to interview pretty much everyone I could find, and play one of the most exciting PC games on the horizon: Portal 2. The preview I wrote, and the profile on Valve themselves, is in the new issue of PC Gamer in the UK. But we've also been putting up the interviews here on the site, one a day for the last week.

Today's is the final part, in which I ask Gabe and co the big questions: what's the point of Steamworks? Is piracy a solved problem? And where's Episode Three? I wasn't optimistic that they'd be willing to talk about it, but I couldn't leave without asking. I'm afraid it didn't go any better than I expected, but I've included the transcript so you can read for yourself. What they did tell me was how Steam revived the Russian games market, why Valve's competitors actually help their sales, and how not to do DRM.

PC Gamer: What have you guys gained from people using Steamworks?
Steamworks is Valve's free toolset for developers wanting to make Steam-compatible games - see here for more. Wait, that's not it... here.

Gabe Newell: We're getting much better visibility into what their experience is like, and much better tools for making those experiences better.

PC Gamer: The developer's experiences?

Gabe Newell: Customers, but then developers get that same visibility. Like, the first time that a guy at a developer logs into the Steamworks page and finds out what's really happening, it's like, “Oh my god, I'm not selling any copies in Germany. Why am I not selling any copies in Germany?” And they find that out three months before they would through traditional brick and mortar, waiting for the charts to hit. They find out the German localisation is actually Lithuanian, or, I don't know, what's a real problem that they would have? Oh, that they hate the German localised version so they're buying all of their stuff grey market from France. And that their decision to do some update that blocks the ability for those games to run in Germany might be a bad idea - that kind of thing.

So it gives our partners the same kinds of tools that we've been using. That's super valuable. Just the ability to create value for customers and solve problems for customers is vastly increased. We had one company that shipped a whole bunch of DVDs to their customers that didn't work.

Erik Johnson: They didn't have keys.

Gabe Newell: Yeah, they didn't work. And they're in a position of, because they have Steamworks, their problem magically went away for their customers. And what went from being a potentially incredibly expensive recall that was super frustrating and damaging to their reputation, rightly so, suddenly just went away. And it went away over an 8 hour period, more or less invisibly to customers.

Erik Johnson: It was a hiccup to customers, that something didn't work one morning and then it did.

Gabe Newell: The biggest thing is not just the distribution kind of issues, it's the fact that you understand your customer a lot better, and you understand how your customer is reacting to the stuff you're doing. That's going to help you fundamentally make a better product. I don't actually believe that we ever shipped Half-Life 1, because there's no way you could actually build a product without giving it to customers to find out what you're doing wrong. It would feel completely like you were on a trapeze without a safety net if we didn't have those capabilities built. We can see what our customers are doing, where we've screwed up, see where our mistakes are and fix them so much faster than we've ever been able to before.

PC Gamer: I can see why it's a good thing for developers that use it, but why is it good for Valve?

Doug Lombardi: Well, it's more people on Steam. We've always been pretty up front about that, right? We make it free for developers to use, and the gain to us is that more people are on Steam. I mean, it's very plain.

Gabe Newell: It's one of those things where everybody benefits. I mean, we benefit from having our competitor's products on Steam, and they benefit from our products being on Steam. There's this presumption that our industry is a zero sum game, and it's so not a zero sum game. Nothing is more likely to make a customer less likely to buy other games than a really bad game experience. And nothing makes them buy more games, and want to buy more games, more than having a good gameplay experience.

Doug Lombardi: And the bigger the hype on the game, the more true that is. It's an amplifier.

Erik Johnson: Finishing a really high quality game makes you want to go out and buy another game right at that moment.

Gabe Newell: Call of Duty on Steam takes advantage of Left 4 Dead 2 customers.

Erik Johnson: Batman. Really good game, same thing.

Gabe Newell: We all win by being able to cross sell.

PC Gamer: It seems like that was really borne out by Killing Floor, which came out hot on the heels of Left 4 Dead, and couldn't be more similar without actually being a Left 4 Dead game. And yet it sold really well at the same time.

Doug Lombardi: And we were totally cool about that, and Tripwire's one of the people we talk to the most and are friendliest with out of all the developing community. That was totally a fine thing, they got it and we got it and there was never a moment of like, “Hey you're treading on our stuff!” or vice versa.

Gabe Newell: Torchlight wouldn't exist without Steam and Steamworks. So, yeah. We really do view ourselves as being part of this larger community, and our big competitor is not just another first person action shooter, it's thinking that games aren't worth our time. Games sucking are a much bigger threat to us than good games from other game companies.

Torchlight was a huge hit for Runic Games, and they really needed one.

PC Gamer: Do you have a good sense of piracy rates with Steam games?

Gabe Newell: They're low enough that we don't really spend any time [on it]. When you look at the things we sit around and talk about, as big picture cross game issues, we're way more concerned about the stability of DirectX drivers or, you know, the erroneous banning of people. That's way more of an issue for us than piracy.

Once you create service value for customers, ongoing service value, piracy seems to disappear, right? It's like “Oh, you're still doing something for me? I don't mind the fact that I paid for this.” Once you actually localise your product in Russia and ship it on the same day that you ship your English language versions, this theoretical hotbed of piracy becomes your second largest- third largest after Germany in continental Europe? Or third after UK?

Erik Johnson: In terms of retail units?

Gabe Newell: In terms of sales of our products, yeah. Overall, Steam plus retail.

Erik Johnson: Probably second. It's a big number.

Gabe Newell: The point is that there's this market that you shouldn't waste your time on, that went from, “You shouldn't waste our time on it, they'll just pirate it,” to “it's actually a really large market for us now,” once you actually do the things that allow your product to be played. And that's why some of the DRM approaches are so bad, because they create negative value, not positive value.

I've had this problem with software, where my machine crashes and I wasn't able to release my license. So I have high-end CAD software that I have for hobbies, and my machine crashes and now I'm screwed because of their DRM solution. And that's bad because it's much harder to justify purchasing software that might just magically disappear and create a huge hassle for you to recover. What you want to do is go the other way, and say, “Anywhere in the world, any time, you can get your software.” It's even better if you can get it to run on more platforms, which is why Steam Play is cool, so I can buy it on a Mac and play it on a PC and vice versa. That's a good thing, that moves customers in the direction of thinking, “Oh, my content is more valuable.”

Erik Johnson: There hasn't been a case where we're making a trade off that could negatively impact a customer's experience to reduce this theoretical piracy rate. Those always seem like awful decisions.

Gabe Newell: You were just saying, you're making this trade off, and it's always the wrong one if any customers can be affected negatively by it.

Erik Johnson: Being able to log into any computer and play our games on Steam was a feature that we thought was interesting in the early days of Steam, but has turned out to be an incredibly high value thing for customers, and that's the kind of thing where a flawed anti piracy strategy would be at odds with that.

Doug Lombardi: The other thing, too, is that gamers are generally good people. If you're making a good game and you've done a good job both from a quality and on the communications standpoint, they're more than happy to give you their money. I mean, we get mail all the time. Gabe gets more mail I think directly from customers but EJ and I get a fair amount. And like, after we ship something that's good, we get mail saying, “I just went out and bought a second copy of it, just because I liked it so much I wanted to pay you guys again.” Or, “I went and bought it from my uncle or brother,” or whatever. So that's my take on a lot of it, just do your job and people are more than happy to pay for it.

Gabe Newell: The other thing that's always funny is how unbelievably smart the gaming community is, and how accurate. You see other people just lying or making up stuff, and it's like, “Oh my God, no. Don't go there.”

PC Gamer: Last time I was at your old office, on the whiteboard there was a pros and cons analysis of another weapon versus the Gravity Gun - something called the Weaponiser. Was that an Episode Three thing?

Gabe Newell: No, it was an internal design experiment that we were doing, which hasn't seen the light of day.

Erik Johnson: That must have been a long time ago, that must have been during our direct to design experiments.

PC Gamer: Is there some sort of big surprise in Episode Three?

Gabe Newell: ...

(Long, uncomfortable pause)

Doug Lombardi: Next question! (Laughs)

PC Gamer: When are you going to start talking about it?

Gabe Newell: ...

(Long, uncomfortable pause)

Doug Lombardi: Next question!

PC Gamer: Nothing at all? I have to ask.

Gabe Newell: I understand, and I have to not say anything.

PC Gamer: Every now and then you guys give a hint of something.

Gabe Newell: And then he (points at Doug) yells at me!

Doug Lombardi: So I tend to sit in and just cut it all off. (Laughs)
 

The sheer awkwardness of that exchange made me glad I'd left those questions till last. For the rest of our enormous interviews, everyone at Valve had been remarkably candid, articulate and obliging. You expect Valve to be smart, you don't always expect them to be so accommodating. So while I'm still no wiser about when the Half-Life series will continue, the sheer tonnage of everything else they told me paints an extraordinary picture of what they're up to in the meantime.

We have our own ideas about where Episode Three will go, what will be special about it, and why they're taking so long about it. We'll be putting those up in a special speculation post soon.