Gearbox' Pitchford: Steam a Conflict of Interest & Exploiting the Little Guys

[DoctorFinger]

PC gamers have grown to absolutely adore Steam, Valve's digital distribution platform. After a bit of a rough start, it's become the shining example of just what digital distribution of games can be. But what does the other side of the gaming industry, the developers and publishers think of it? We saw at least part of that answer today when Gearbox Software honcho Randy Pitchford made some frank comments about Steam and what it does to, and for, the industry at large. RP: 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.It is a bit odd to essentially be relying on a competitor to distribute and sell your product. So who would Pitchford like to see run the digital distribution outlet? Why, who else: Microsoft. Since we more or less all run Windows, they would be the logical choice to sell us games. But as Pitchford concedes Microsoft doesn't seem to know how to property run a digital distribution platform on the PC, as evidenced by the problems with Games For Windows Live Marketplace. I have a feeling that while many gamers respect or even like Randy, they likely won't share his feelings on this particular point.

Sources - Maximum PC (http://www.maximumpc.com/article/features/randy_pitchford_talks_borderlands_piracy_and_why_h e_doesn%E2%80%99t_trust_valve?page=0%2C0); 1UP (http://www.1up.com/do/newsStory?cId=3176406).

[digitalErich]

I can see where he's coming from, but who else is doing it even half as good as Valve? And the harsh reality is that, as a consumer, this isn't really my problem. I love Steam and I want more games on it.

If Valve is indeed taking too much from the little guy, there are other avenues for them to DD their game. They choose not to.

[bapenguin]

I can see where he's coming from, but who else is doing it even half as good as Valve?

Nobody knows because none of the platforms release sales numbers.

[PathMaster]

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?

How the hell does that answer lead to that question?

I too understand what he is referring too. While I would love to see an independent company prove they have a viable DD platform, it would be so hard to get the backing and support from developers. Besides, being truly independent would require some interesting financing and revenue streams.

[Food Nipple]

I see his point, but as a consumer I'd much rather have it in Valve's hands.

All the features that make Steam great exist because Valve had the guts to try this stuff with their own games first. Preloading games, steam achievements and stats, and weekend deals all exist because Valve stepped up to the plate and advocated these things with their own products first.

Valve has hands down the best digital distribution, I don't see the logic in fixing what isn't broken.

[Chimpbot]

Pitchford feeling threatened by Valve would be like any number of developers feeling threatened by Nintendo's, Microsoft's or Sony's in-house development teams.

The situation is really no different from that of the consoles, wherein Steam is the "console" for this example. You don't see publishers complaining about the console manufacturers releasing their own games for their own consoles very often and it's most definitely not a conflict of interest for them to do so.
Valve sells games other than their own through Steam for the simple fact that it makes them assloads of money.

At the end of the day, there are plenty of alternative DD providers out there; Direct2Drive, Impusle, GamersGate, Greenhouse and, to a certain degree, Good ol' Games. If John Q EveryDeveloper doesn't particularly care for Valve's terms, they still have a number of options, up to and including simply releasing it themselves on their own website.

I can see where he's coming from, but who else is doing it even half as good as Valve?
I would wager Direct2Drive gives Steam a run for its money. Impulse, although comparitively new, is certainly picking up steam(yeah, that pun was intended. heh.) and slowly coming into its own.

[Philonious]

I think he's just running his mouth so that people pay attention to Borderlands. I don't see how Microsoft, or anyone else for that matter, would do things any different/better than currently Valve does.

[hunterx280]

Randy Pitchford is either the ballsiest guy in the industry or the nuttiest. I'm not sure which...

[Urizen]

Impulse, although comparitively new, is certainly picking up steam(yeah, that pun was intended. heh.) and slowly coming into its own.

Sorry. (http://www.thebestpageintheuniverse.net/c.cgi?u=puns) I had to do it. I had to do it for the lulz.

[mightbe]

Randy Pitchford is either the ballsiest guy in the industry or the nuttiest. I'm not sure which...

After interacting with him many times at MS and PAX, I think it's both.

[mightbe]

Pitchford feeling threatened by Valve would be like any number of developers feeling threatened by Nintendo's, Microsoft's or Sony's in-house development teams.
Ask Randy about GFWLive and you'll know right away that he has no love for MS's style of doing things either.

[Xerxes]

Randy Pitchford is either the ballsiest guy in the industry or the nuttiest. I'm not sure which...

Maybe his balls are the nuttiest. Hmmm, or his nuts could be the ballsiest.

[J Arcane]

It's been a while since the last break down of costs to publish on Steam I've seen, but as I recall, he's right in saying Valve takes a pretty hefty cut for what they offer. They're still cheaper than traditional retail distribution, but the cut they take was a hell of a lot more than needed to cover their bandwidth and hosting costs and still make a profit.

That might not be too big of a deal for the big publishers that make up most of it's stock, but for the little guys I can see that being exactly what he says it is.

[Esquilax1138]

This guy has Glenn Beck syndrome, his head is up his ass.

RP: As a guy in this industry though, I don’t trust Valve.

RP: I know. And I, personally, trust Valve.

Throw the brick and then in the next sentence try to pull it back. Kind of like saying...

As a guy on the street, I think your mother is a whore.

But as just a guy, I think she's really not.

Less QQ more pew pew.

[DoctorFinger]

Valve may screw the small developer, but do they screw them any more than the other DD options out there?

[MagGnome]

It seems like all the DD providers screw the small developer. We know for sure that MS and PSN do this, as several indy developers have complained about not getting a good cut of the sales.

As for Randy, his idea of MS controlling Steam is mind-boggling. I couldn't think of a worse company to run the platform, except for maybe Activision.

An MS-run Steam would likely serve as just advertising for the 360, as GFWL does.

[Narradisall]

I can completely understand his point.

I would still MUCH prefer maybe two or three companies to equally share and run a digital distribution service.

Valve are pretty much the only game in town at the moment. It could lead to anti-competitive practices or breaches.

I dont think Steam is anywhere close to being that bad, Valve seem to be running it extremely well.

[roboninja]

Much of this interview makes no sense whatsoever. Valve has a conflict of interest because they make games, so Microsoft would be better?

I agree with digitalErich; this is none of my concern. Until Valve has a monopoly on DD, and abuse that power, I will shrug at these statements with a big ol' "meh".

EDIT: Ironically enough, I just pre-ordered Borderlands on Steam last night.

[Dukefrukem]

Nobody knows because none of the platforms release sales numbers.

Numbers were unconfirmed a while back. I can't find them now.

[Adam Blue]

This guy has Glenn Beck syndrome, his head is up his ass.



Throw the brick and then in the next sentence try to pull it back. Kind of like saying...



Less QQ more pew pew.

Actually, what he made makes sense. Comparing industry to consumer. There are things about Steam that I do not like. Every other DD platform has Far Cry 2 with expansion for $20. Steam still wants you to buy the original game for $20 and the DLC separate. They do this because they know they can.

[Superman's Dead]

This guy has Glenn Beck syndrome, his head is up his ass.



Throw the brick and then in the next sentence try to pull it back. Kind of like saying...



Less QQ more pew pew.

I think what he's saying is as 'a guy in the industry' he doesn't trust them. As himself, he does. From a business perspective, why should a small studio put basically their future in the hands of a competitor? As a gamer and a person, sure, you can like them. But it's good business sense to remain cautious.

I think it's a really good point.

[muddi900]

I think the headline is tad sensationalist.

[tacitus]

I sort of understand where Randy is coming from and I am a bit concerned about the dominance of steam. Not currently, but at sometime it WILL be bought out or go public. And then really bad things will happen as the new landlords seek to get their money back.

But without steam where would DD be ... nowhere. Remember way back when you have EAs half assed attempt at DD; not sure how it is now. And as with others I have much more awareness of independent and smaller games because of steam.

But Randy mouthing off like is pretty poor; and Microsoft ... shesh give me a f***ing break. GFWL is clunky and stupid and MS is not upfront about the number of activations. The few times I have used it something odd had happened. Classic example, I bought street fighter 4, well it turns out I have to change my router to static addressing for all of my PCs and do some port forwarding and ghod knows what else. I will probably avoid Borderlands in the immediate future because his asinine statements.

I use both Impulse and GOG (Itsa different beast) for DD; I actively avoided GFWL for Fallout 3 DLC.

[Deadend]

What he is saying makes perfect sense. He personally knows that Valve is good, as Gearbox has a long and happy history with Valve. But from an objective point of view.. a publisher has to be pretty desperate/scared to fully trust Valve as their only distribution method. Valve really DOESN'T have motivation to do right by others anymore.

I think an ideal situation would be for Valve to spin-off Steam, and to sell it's technology to other companies to run online stores with. As right now, the DD stores all work differently and have their own special friendslists. So that there could be dozens of online stores selling games that plug into the Steam tech. It would probably end up being better for consumers as well.

[Food Nipple]

Actually, what he made makes sense. Comparing industry to consumer. There are things about Steam that I do not like. Every other DD platform has Far Cry 2 with expansion for $20. Steam still wants you to buy the original game for $20 and the DLC separate. They do this because they know they can.

Valve doesn't tell people what to charge, if there's something wrong with FarCry 2's pricing, that's on Ubisoft.

[muddi900]

Valve doesn't tell people what to charge, if there's something wrong with FarCry 2's pricing, that's on Ubisoft.

I don't know about Steam policies, but traditionally the retailer sets the price, the manufacturer or producer just "suggests" it, that's why its called Manufacturer's Suggested Retail Price. That's how retailers have sales and giveaways.

Of course, Steam could have a different deal, but I doubt it.

[Primus]

Maybe his balls are the nuttiest. Hmmm, or his nuts could be the ballsiest.

This is literally the first time I have laughed out loud at a post here.

[Vigil80]

As a guy in the industry, he may not like Valve. Most folks don't like it when their competitors succeed. As a guy buying from the industry, I like Valve. They're doing it right so far. And the idea that Microsoft would be better is crazy.

Microsoft generally produces good product, and I'm not about to start using the cute "M$" bit, but would they have brought us the Weekend Deal? And why would it be "dangerous" for Valve to succeed? There's a lot about this little interview that seems like Pitchford was put up to it or something.

As for small indy developers, they should work on becoming big developers, and in the meantime get on their knees and give thanks that they have an avenue for selling their tower defense clones, "innovative" games where everything is rendered in wireframes, and other wacky crap.

[Xerxes]

As a guy in the industry, he may not like Valve. Most folks don't like it when their competitors succeed. As a guy buying from the industry, I like Valve. They're doing it right so far. And the idea that Microsoft would be better is crazy.

Microsoft generally produces good product, and I'm not about to start using the cute "M$" bit, but would they have brought us the Weekend Deal? And why would it be "dangerous" for Valve to succeed? There's a lot about this little interview that seems like Pitchford was put up to it or something.

As for small indy developers, they should work on becoming big developers, and in the meantime get on their knees and give thanks that they have an avenue for selling their tower defense clones, "innovative" games where everything is rendered in wireframes, and other wacky crap.

MS had deal of the week. It's really week in comparison I suppose.

[Orca]

I think he's just running his mouth so that people pay attention to Borderlands. I don't see how Microsoft, or anyone else for that matter, would do things any different/better than currently Valve does.

Not really - there are quite a few developers who don't really like supporting someone that's making games that directly compete with their own. Obviously whoever is running the DD store deserves to make money off doing it, but it's hard to justify helping your competition fund their games that way.

That's why Pitchford would suggest Microsoft, with a good DD store, would be an option - they really don't do much in the PC space anymore.

[Vigil80]

Noone has held any guns to any heads. It's a situation that has formed from natural market forces. There are some other options for DD. Even so, Borderlands has its ad image in the lineup on Steam's homepage.

If he's suggesting that Steam be sold to Microsoft, then... well, let's just say he's said crazy things that were more endearing than that.

[MagGnome]

EDIT: Ironically enough, I just pre-ordered Borderlands on Steam last night.

You should have bought it from Wal-Mart, Best Buy, or Target instead. They never exploit the little guy!

Does Borderlands have GFWL integration?

I don't get the comments that some people in here are making. Steam is far from the only game in town, and they have nowhere near a monopoly. It's not like Steam is the equivalent of what iTunes was (and still is to a big extent) a few years ago. D2D, Gamersgate, and Impulse are all very popular, and there are several other smaller services out there. If Steam started going all crazy, then people would go elsewhere.


As for small indy developers, they should work on becoming big developers, and in the meantime get on their knees and give thanks that they have an avenue for selling their tower defense clones, "innovative" games where everything is rendered in wireframes, and other wacky crap.

I hope you realize how asinine this statement is. There are plenty of indy developers out there putting out fantastic games that are not "tower defense clones", rendered in wireframe, or "other wacky crap". Give me a break.

[J Arcane]

What he is saying makes perfect sense. He personally knows that Valve is good, as Gearbox has a long and happy history with Valve. But from an objective point of view.. a publisher has to be pretty desperate/scared to fully trust Valve as their only distribution method. Valve really DOESN'T have motivation to do right by others anymore.

Exactly. On a personal level, he's worked with Gabe and the Valve guys for years, he knows them, and that's why he trusts them.

But from a purely business standpoint, setting aside that personal perspective? The market position Valve has gained with Steam is going to look rather threatening.

And all it'll take is Valve going public, or Gabe having a stroke or something and leaving some asshole in charge, for them to start exploiting what is a pretty powerful hold and influence on the PC market.

[Vigil80]

I hope you realize how asinine this statement is. There are plenty of indy developers out there putting out fantastic games that are not "tower defense clones", rendered in wireframe, or "other wacky crap". Give me a break.
Yeah, yeah, I get it. I was in a bit of a mood when I said that. (Although I did have examples in mind for each item.) But as you pointed out, Steam is no more exploitative of wittle guys than any other outlet. And if it was, there are plenty of other alternatives. Valve is hardly stifling anyone.

[Superman's Dead]

Noone has held any guns to any heads. It's a situation that has formed from natural market forces.

I agree completely; however this does not make it ideal. And it sounds like other developers are starting to realize it and try and figure out how to proceed.

[Vigil80]

One thing I will say about Steam - which it's too close to bedtime at the moment for me to fully explore - is that I doubt there's room for many Steam-like services out there.

I have a Steam account, and I have an Impulse account since Stardock games don't seem to go up on Steam. If there's a third service that wants me to register and install a shell program, I'm not going to do it if I can find the game on one of the services I've already joined. It's sort of like the console comparison. You only really get more than one console because of the games that don't show up on the first.

There's other implications that I'm not going to create a wall o' text about, but one thing's true. As long as Steam keeps delivering the goods, they've got the install base to deny anybody else that tries to ape them. That fact probably should upset competitors. But there has to be a winner and loser in any race.

[tacitus]

On second thought - Envy ... envy ... envy Randy Pitchford remembers when Gabe Newel, etc were Lackeys of Sierra. And of course Gearbox did a couple of Half-Life addons. Well Randy is essentially still a lackey to the publishers; while valve has done bigger things. He actually has some validity ... Its just the stupid idea that Microsoft would provide a PC-centric distribution that doesn't suck and that Microsoft would be nicer to the "little guys" than Valve.

I will be holding off my Borderland purchase until modding tools become available on the PC, true verification on what connection (and connection usability) and probably a price drop... And maybe from steam (hey, hey)

[Deadend]

On second thought - Envy ... envy ... envy Randy Pitchford remembers when Gabe Newel, etc were Lackeys of Sierra. And of course Gearbox did a couple of Half-Life addons. Well Randy is essentially still a lackey to the publishers; while valve has done bigger things. He actually has some validity ... Its just the stupid idea that Microsoft would provide a PC-centric distribution that doesn't suck and that Microsoft would be nicer to the "little guys" than Valve.

I will be holding off my Borderland purchase until modding tools become available on the PC, true verification on what connection (and connection usability) and probably a price drop... And maybe from steam (hey, hey)

Hell, he says in the interview that Microsoft has done a horrible job so far. But that they are also big enough to do it. But MS did slow down on their game publishing to make the 3rd parties feel better on 360.

Steam is good and Steam is great.. right now. J Arcane, Pitchford and I are all slightly pessimistic that the good times are going to keep on rolling.

[Sl1pstream]

One thing I will say about Steam - which it's too close to bedtime at the moment for me to fully explore - is that I doubt there's room for many Steam-like services out there.

I have a Steam account, and I have an Impulse account since Stardock games don't seem to go up on Steam. If there's a third service that wants me to register and install a shell program, I'm not going to do it if I can find the game on one of the services I've already joined. It's sort of like the console comparison. You only really get more than one console because of the games that don't show up on the first.

There's other implications that I'm not going to create a wall o' text about, but one thing's true. As long as Steam keeps delivering the goods, they've got the install base to deny anybody else that tries to ape them. That fact probably should upset competitors. But there has to be a winner and loser in any race.

Steam and its competition are free to download. If these were consoles that they were giving out for free I would just get as many as possible and buy a game on the one that gives me the better deal on a game to game basis. I wouldn't just stick to one platform because it's more convenient.

I don't get the "every game should be on Steam" mentality. You're using the same computer for every game. Sure, they won't appear on the same list in a single application, but at least there's some competition.

[Food Nipple]

I don't get the "every game should be on Steam" mentality. You're using the same computer for every game. Sure, they won't appear on the same list in a single application, but at least there's some competition.

I don't want to have to remember which service I downloaded which game on. Oh, I got game X through service Y, I need to launch that client, oh and I don't have friend Z's alias under service Y, only service W, so I better hope that he checks his messages under W when he's running X through Y.

This is especially stupid with Impluse, since it uses Shift-Tab to bring up the overlay and you can't change it to another keystroke. Sorry, I'm not going to rebind Steam, which I use for every other game because you're too lazy to make your second-rate client play nice with the de facto standard.

[Telefrog]

This is especially stupid with Impluse, since it uses Shift-Tab to bring up the overlay and you can't change it to another keystroke. Sorry, I'm not going to rebind Steam, which I use for every other game because you're too lazy to make your second-rate client play nice with the de facto standard.

Well, it would be stupid if it wasn't for the fact that Impulse allows you to launch every game except Demigod without having the frontend running. Just install the game and doubleclick the game's icon on your desktop.

[Food Nipple]

Well, it would be stupid if it wasn't for the fact that Impulse allows you to launch every game except Demigod without having the frontend running. Just install the game and doubleclick the game's icon on your desktop.

My experience with Impulse/Stardock is almost exclusively Demigod, so yes that's what I was referring to.

Also, I haven't started up Sins of a Solar Empire in a while, but there was a well known issue where the UI elements were unreadable if you launched the game through Steam.

I'm not so impressed with Stardock's efforts, and I shudder to think about digital distribution through the third tier guys below them, as even the second tier stuff isn't to my satisfaction.

[tacitus]

I have not been particularly impressed with impulse either; although I will continue to buy from them, just like a do steam.

I was a bit to grumpy earlier today; and I agree with him somewhat about Valve dominance being a concern, particularly in the future.

But its statements like this: "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" or "Microsoft has every single one of us running Windows, and it could solve this [distribution] problem in a second if done right. It’s not hard..." that sort of angers me. Does anybody think that Microsofts distribution system (I they had one that works) would be any better or fairer? I also suspect if it was "not hard" somebody else would have a crackerjack system by now.

And an even scarier thought Activision will be coming online in the near future with battlenet2 and it has been speculated that they will use it to leverage into a full fledged software distribution site and not just for their products. So its probably good that Valve is dominate right now; because they will need to be if Activision decides the compete in this arena.

[MagGnome]

Also, I haven't started up Sins of a Solar Empire in a while, but there was a well known issue where the UI elements were unreadable if you launched the game through Steam.

I always launch Sins through Steam, and I have never had a single issue. Ever.

[tacitus]

Just noticed on a really good article by John Gibson of Tripwire Opinion: Tripwire, Steam, And How We’re Not Getting Exploited (http://www.gamasutra.com/php-bin/news_index.php?story=25595)

As a small independent developer that has released multiple games on Steam, we are exactly the type of studio that Randy believes is being exploited by Valve. Additionally, as president of Tripwire Interactive, I've personally been involved in all of our business deals with Valve and have experienced firsthand how they treat independent developers.

So, is Valve exploiting independent developers? In short: absolutely not. Without pulling any punches, I can say with certainty that if it weren't for Steam, there would be no Tripwire Interactive right now

[MagGnome]

It's nice to get a more independent opinion. I was curious as to how Randy knew that indy developers were being exploited.

[PathMaster]

Without trying to sound like an ass, one person/company's view may or may not be the norm. They could very well be the exception.

[Lint of Death]

For those who want more insider perspectives, here's what Garry Newman of the awesome HL2 modification Garry's Mod has to say (http://www.garry.tv/?p=1144):

...
I am more than happy with the cut I get from Steam. Yeah of course more would be nice – but the cut isn’t anywhere near that low that it would turn me off selling through Steam. Maybe I’m a special case because GMod has sold so well – but I know that Introversion nearly went under until they got on Steam (Although flushing all the money out of the company at the end of the month is probably asking for trouble).
...

[MagGnome]

Without trying to sound like an ass, one person/company's view may or may not be the norm. They could very well be the exception.

More than one company/person has come out in defense of Steam and the cut that they receive.

[PathMaster]

More than one company/person has come out in defense of Steam and the cut that they receive.

Fair enough, maybe Randy is the exception. I do like this part:

When we got the contract from Valve, we were amazed at how much better the deal was from what we were getting from the standard publishers. Even our lawyer was surprised at how straightforward the contract was. Many game publishing contracts are full of "gotchas," or what we at Tripwire Interactive call "land mines" -– little fine print clauses that, if you overlook them, could blow up in your face later. Valve's contract was the first one we had seen that didn’t have any land mines in it.

Very impressive.

[Cit Phil Cit]

Valve has to be fair, as a game developer they don't release titles well at all: the income is extremely valuable to them. By offering the Steam service they can spend the cash to keep themselves working on polishing their projects.

If they ever shortchanged their business partners they will have poisoned their own well, as businesses cut and run to other online services (since, as already stated they are far from a monopoly).

I'd rather make a few polished games once and awhile, and catch money on the side from everyone who uses part of my business; than screw someone once and not get any money anymore and still try to make infrequent polished games.

[MagGnome]

Exactly. It's not as if Valve is pumping out multiple titles a year or anything, so I hardly see them shutting other developers out.

[H.Bogard]

http://arstechnica.com/gaming/news/2009/10/developers-speak-on-valve-steam-conflict-of-interest.ars?utm_source=rss&utm_medium=rss&utm_campaign=rss

We were also unable to find any developers who would admit to feeling exploited by Valve. Quite the opposite actually. Jakub Dvorsky, from Machinarium developer Amanita Design, told Ars that Valve offers a comparable, and in many cases higher, revenue percentage when compared with other digital distribution outlets. And for a small independent developer, this makes all the difference.

Quotes from many other developers in there.