Gabe Newell on piracy and Steam's success in Russia
We’ve already covered Valve co-founder Gabe Newell’s thoughts on Team Fortress 2’s lucrative decision to go free-to-play, but during the same talk Newell also spoke a little bit about the highly lucrative Russian games market. It seems that the country - which is notorious for high levels of piracy - is actually something of a nest (headcrab) egg for Valve.
“Russia now outside of Germany is our largest continental European market,” Newell was quoted as saying on Geekwire. Presumably this also means the UK is Valve’s largest continental European market, unless Pantelleria has a huge amount of PC gamers. But Newell’s statement also indicates that Russia eclipses France, Spain and Scandinavian countries in terms of profits.
It seems other games companies who had tried to penetrate Russia hadn’t done so due to a the infamous levels of piracy. “The people who are telling you that Russians pirate everything are the people who wait six months to localize their product into Russia,” said Newell. “It doesn’t take much in terms of providing a better service to make pirates a non-issue.”
Although the Russian market may have been a particularly tough nut to crack, it’s not hard to see where Valve’s new customers are coming from. With a population of 141.8 million, it’s far bigger than Germany (81.8 million) and the UK (61.8 million). But, only 42.8% of Russians have internet access, compared to the UK’s 82%, making it pretty much an even playing field in terms of numbers of gamers.
Of course, a lack of internet access could have contributed to Russia’s sky-high piracy levels, with cracked black-market DVDs offering many an offline gaming experience. But the inevitable, interminable spread of internet access across the country comes with improved anti-piracy measures on most titles.
This wasn’t Valve’s approach, though - it offered the carrot instead of the crowbar. “The easiest way to stop piracy is not by putting antipiracy technology to work,” Newell said. “It’s by giving those people a service that’s better than what they’re receiving from the pirates.”
Valve recently struck a deal with Xsolla so gamers in Russia could use real rubles to buy games on Steam.