Valve: A New Type of Games Industry Entity

With the recent purchase of Turtle Rock Studios, Valve has added yet another point to its ever-growing list of categorizations: parent company. Already a developer, online game distributor, engine licensor, and de factor benefactor of the slightly-less-splintered-than- ever online PC gaming community, Valve has managed to have its hands in far more areas of game production and support than most non-publishing entities.

We're already seeing titles from Valve on a more frequent basis than in the past. Gamers are used to waiting years between major releases, but we've seen at least one game a year for the past two years, with Left 4 Dead (PC, X360) expected this fall and Half-Life 2: Episode Three probably coming in 2009. Since Turtle Rock has been acquired wholesale and not picked up via the usual Valve method of absorbing individual developers into its Bellevue, Washington offices, this will more explicitly allow the company to work on multiple projects at one time.

There are and have been other examples of independent developers with multiple studios--Foundation 9 is among the most prominent of these currently, and is probably quite secure with its diverse holdings of over half a dozen studio locations. Many, however, end up becoming part of a larger publisher; for example, Irrational Games' two locations--Boston and Canberra, Australia--were acquired by Take-Two Interactive and are now known as 2K Boston and 2K Australia.

Valve has put itself into an extremely self-sufficient position. It does not rely on full publication contracts from publishers, as most fully independent developer crafting big-budget games do. Electronic Arts handles the pure retail distribution and some marketing, while Valve takes care of everything else relating to production and online distribution. Of course, this is largely because Valve's games saw so much commercial success in the first place, but it has spun that success into a much broader and wide-reaching operation.

This gives Valve a unique position in the industry. It deals fully or partly with many parts of the equation: production, tools development and licensing, publishing, online distribution, post-release support, and management of a broad online community. Some of these services are also available to other developers.

Some indie devs go straight to Valve for distribution, bypassing traditional retail contracts or using their online sales momentum to secure retail later. While online distribution for indie PC games is not new, Valve has introduced what is undoubtedly the first widely-accepted system for distribution, one that is not simply a sales platform but a general hub for PC gaming, much like Xbox Live is for Xbox 360 gaming. Meanwhile, Microsoft's own Games for Windows initiative, while useful in standardizing various development-related issues, has not taken the PC gaming community by force.

So now, having created this vast array of services for gamers and developers, Valve is expanding its own development bandwidth. An already-unique company is becoming more versatile, particularly with its recent move into multiplatform development as well. I don't expect Valve to go on any kind of buying spree and acquire a number of studios in the near future--gamers already know all too well the company moves deliberately in its decision-making process--but it is becoming an ever-more formidable force in the industry, and a fairly unprecedented one. While I may not know where Valve is going long-term, it is clear the company is already treading on new ground.