Steam is massive. It is the largest digital distributor in the world with over 10,000 games and more than 15 million daily active users. All this is thanks to the genius of tech entrepreneur Gabe Newell who co-founded the developer and the digital distribution company, Valve. Here’s the story of Valve, Steam and how they became the biggest gaming platform on the internet.
Back in 2002, Steam was revealed by Valve at the Gaming Developer Conference or GDC as a way of installing and updating games more accessible. But this was covering up a big scheme that Valve had to modernise the PC industry.
Valve told gamers that all they had to do was put the game discs in their computers and their game will be downloaded in their personal Steam library. However, gamers were not pleased with this.
Back in the early 2000’s PC gaming was still in its infancy and a lot of people traded discs between them. A lot of games too didn’t require a physical disc to be inserted in order for it to be played. As a result, gamers rejected Steam when it was first launched. Keeping a disc that you could trade around with your friends was much easier.
As years went by Steam began to work in the background. By the time 2005 hit, Valve had a ton of amazing games available on its platform. Before Steam could ever come back and take its place as the biggest gaming platform, Valve released its ultimate weapon. The game series that’d inspire a generation of gamers to come to their platform. The Half-Life.
The franchise had two main games, Half-Life and Half-Life 2. Both of these titles changed the gaming landscape forever. The game was a masterpiece. It received stellar reviews across the board and instantly received a cult-like status.
The Half-Life games were first-person shooters and featured amazing gameplay and never-before-seen game mechanics. The game’s silent protagonist, Gordon Freeman, also became everyone’s favourite as they were able to put themselves in his shoes and experience the scientific facility of Black Mesa, where the game was taking place.
It is here where Valve used its trick. The only way to play such a masterful game was through Steam. As a result, thousands of gamers across the world installed Steam. Instantly, Valve had people locked into getting Steam.
And with a massive influx of users, the platform grew. In 2005, Valve allowed third-party publishers to post their games on Steam. The platform didn’t do it for just the goodwill of their heart but instead profits.
Valve charged a cut of the profits the developer made and in return gave them access to a massive audience of gamers. Rag Doll Kung Fu and Darwinia were the first third party games made available on Steam. Marking its transition into a fully functioning digital store.
As more users joined in, they attracted more developers and in return, even more, users joined in. And you can guess the results from thereon. In 2010, Valve made more profits per employee than either Google or Apple.
At present, Steam has total control over the digital sales of PC games on the internet. By enabling gamers to ditch their discs and adopt the digital. Valve helped kickstart an industry-wide change that revolutionised the way we consumed content.
Even before Netflix arrived on the scene. It was Steam letting people enjoy their media digitally. The company grew the market into a multi-billion dollar industry. They effectively changed consumer behaviour to a point where most PC players don’t buy physical games. Even those who do, are not surprised to only receive a Steam key in their box.
But Valve wasn’t just concerned with the digital migration of games but making them as well. Valve is a company that thrives on user-generated content. Some of their most popular games are based on the modded version of the old games. For example, Counter-Strike is based on a Half-Life mod and DOTA 2 is based on the mod of Warcraft 3.
Valve bought these franchises and turned them into a multi-million dollar industry. But the adoption of user-generated content didn’t stop there. The platform allowed for the sale of mods, in-game items like skins made by the user.
As a result, Valve thrived in the coming years with more gaming content than found on any other platform.
The Not So Good Side
Valve is a company that works in mysterious ways. They don’t develop the third instalment of their beloved franchises and barely make any new games anymore.
The company has no managerial structure where a person could enforce deadlines on to its employees. Every one of the programmers working at Valve is free to hop on from one project to the next and do what they deem fit. It means that whenever Valve puts out a game it changes the world and also mean that they rarely ever put out a new game.
And it’s not just gamers that don’t like the mysterious attitude of Valve. In the landmark case of Steam Vs the Australian government, they were instructed to pay $3 million in fines and to initiate a refund process for the games bought digitally. Steam’s policy collided with Australia’s consumer rights law.
Later, as of 2015, Valve started offering refunds across their store and argued that this was sufficient and they needn’t follow the local law because they’re a global company.
Before the historic rulings Valve never offered refunds of any kind. On any of their digital purchases. What was seen as a gesture of goodwill was nothing more than self-preservation. Valve has had plenty of experience inside the courtrooms and it continues as well.
Whatever might be the case, Gabe Newell has created a company that does its own thing, right or wrong, regardless of the public pressure. In an era of cancel-culture that in itself is a huge achievement. Furthermore, people working over there want to do great things, they want to make new products but all of them tend to avoid the spotlight.
Valve only seems to be interested in making games when it’s a huge earth-changing event. They want to do the things that nobody else has done and they’re not doing it out of the goodness of their own heart but they want to make money but there is something admirable about the fact that Valve makes games because they think that that game can change everything.