Gearbox's Pitchford Says Valve is 'Exploiting' Smaller Devs with Steam, Advocates Split

I read that same article when I got my copy of MPC and my response was "wtf?".

Either Randy has no fucking clue what he's talking about or he's just jealous.

I have been in the industry for more than twenty years, shipped fourteen games and have had my games on ALL of the top digital distribution sites - including Steam. As such, I can say with 100% certainty that Valve is no more "evil" than Direct2Drive, Stardock, RealNetworks, Gamers Gate or any other portal that sells games.

The perception is that Steam is so huge that Valve can do whatever they like. The reality is that the notion is complete.utter.bollocks. Just because they have North of 20 million subscribers, does not mean that all of them are buying other games on Steam with any meaningful regularity. Thats like saying that Best Buy, Frys et al should close up shop because of GameStop. Fact is that there are people buying games from Best Buy, Walmart - and GameStop. In much the same way that there are gamers buying games from all the other sites - including Steam. So if you go by the numbers alone, Direct2Drive, Gamers Gate, Impulse etc should all be out of business by now and just give up. Fact it, that is not the case. At all.

Steam does command the largest number of subscribers to date but that does not necessarily translate into sales for third parties. Especially when you consider that the Steam subscriber base was seeded off Valve's own highly popular games which you cannot install or play outside of Steam.

So the question becomes. If someone bought HL2, TF2, L4D etc on Steam, do they consider Steam more convenient and so they buy other games through Steam - or do they only buy Valve's own games due to the fact that they need Steam?

Even when you buy Valve's PC games at retail, all you're doing is saving yourself some download time and getting a box. You need Steam. There are some games - which use Steam - and which do the same thing.

From the development and business standpoint, I haven't seen any difference in dealing with IGN' Direct2Drive (owned by Fox) over Valve. The process is very simple and straightforward. You pitch your game. If they like it, you get a contract in which you set your price and they take their cut of the proceeds.

In fact, from all the sites out there, Valve offers so much more (how about real-time sales tracking - the real-time reporting system alone is a sales/accounting wet dream) that is not even funny.

And guess what, they don't take any larger cut than the other sites do. In other words, they are in line with industry trends. I can't say how much, for obvious reasons, but what I can tell you is that :

a) Valve's entry into the digital distribution scene actually helped INCREASE royalties paid to developers. I know this how? Because one site that I am with was taking a 50% cut for selling our games. Once we got on Steam and saw what their [smaller] cut was - we were able to have that other site match Valve's cut or we would pull our titles from the service and not give them our new games. The end result was that we got an amendment with the reduced cut. So now ALL the sites that we have our games on are taking the SAME cut as Valve.

b) the cut that Valve takes is in line with industry standards. In fact, from what my industry friends have told me, ALL the other sites (except for RealNetworks and some others which do White Label partner business and thus it becomes a percentage of a percentage) are now matching Valve's royalty cut. But in order to have that leverage, you have to be on Steam.

c) The cut that Valve takes is not exploitative AT ALL. In fact the developer gets almost 4x what they would get from any retail publishing deal - assuming they can actually get one.

Like with all business ventures, not everyone is going to get rich by being on Steam. Thats just a ludicrous fallacy. There is a reason why you still see indies putting games out at retail e.g. Tripwire just recently released Killing Floor at retail and are about to release Zeno Clash for those guys as well. Retail is still king and if you can get into retail, the extra cash can't hurt. The issue is GETTING INTO RETAIL. And thats where digital distribution helps.

To wit, Valve is no more exploitative than Microsoft is over XBLA or XBCG (or whatever the frack they're calling it these days).

Valve runs a business and obviously apart from the fact that indie devs can get their games on there - if Valve likes them enough to sign them - other publishers realize the potential and draw of their install base. Which is why even the bigwigs are getting on Steam - something they never would have otherwise considered. Are they (e.g. EA, THQ, Ubisoft etc) getting a better deal (by Valve taking a smaller cut) than us indies? I have no clue - but considering that Valve doesn't need that business and thus can't be coerced into making concessions, my guess is that their cut is standard regardless of who you are. Again, I could be wrong and maybe the likes of EA gets to take a bigger cut than others, but I dunno.

Anyway, Randy's commentary - assuming MPC didn't take it out of context - is the sort of alarmist bullshit that our industry thrives on. So its just another day at the farm. By the time the news scrolls off the headlines, we would have forgotten all about it and moved on to the next one.

Not that they need any defending, but I love working with Valve and have no complaints. My guess is that you'd be hard pressed to find anyone with games on Steam with a different opinion. And as everyone knows, if there was anything to bitch about it, I'd probably be the one nominated to start with the bitching. ;)