Don't miss part two of our interview with Valve marketing director Doug Lombardi, in which he explains the release plans for Left 4 Dead, the evolution of Steam, and the future of the company.

The PC is no longer a viable platform. The PC is all about casual gaming. The PC market is dying.

We've heard it all before, and so has Valve's Doug Lombardi. I recently caught up with the marketing VP during an Electronic Arts press event. At the end of the night, the house music dying down, we had a long chat on a number of topics--many of which pertained to his company's primary platform.

What does Valve think of the PC Gaming Alliance? Are they as tired of the PC gaming "problem" as we are? What is at the root of the issue, anyway?

Shack: Do you guys ever get tired of the same old "PC Gaming Is Dying" stories?

Doug Lombardi: I mean, I think, we sort of laugh at it. Because we've been wildly successful--we're very fortunate, you know. Our games have all done really, really well, Steam has taken off and become this whole other business for us, Valve has never been in better shape--and yet everybody is talking about how in the PC world, the sky is falling. And we're like, we've been doing this for 10 years now--actually 12 years since the company started, 10 years since the first game came out--and we've never been in better shape, financially or otherwise. The company is over 160 people now--it was 20 people when we shipped Half-Life. We've got multiple projects going--we were always a one-project-at-a-time group.

We don't understand why that story gets traction over time. I think people have finally started to clue in to the fact--there was a story last week where people finally looked at the online subscription revenues for WoW and all the things that look like WoW, and realized, wow, there was a butt-load of cash being made here that wasn't being counted at the register, at retail, in North America, which is where all these stories come out of.

NPD, god love 'em, they release a US retail sales report, and people take that and say that's the world picture. And it's just not true. It's not like NPD is trying to be evil. Their job is to report North American sales data. They're doing their jobs. But people are taking that and discounting.. in Germany for example, retail sales of PC products crush all other games, with the possible exception of the DS. It certainly kills all of the next-generation consoles. So if people were looking at that and factoring it in, if people were looking at WoW's subscriptions alone and factoring it in, looking at Steam sales and factoring it in.. Just look at what Popcap's doing--Bejeweled and Peggle and all this stuff--they're not in that NPD data.

If you go around and you look at all these different things that are happening on the PC, and you add them together, my hunch is that [the sales numbers] would actually be much larger than all of the consoles put together. Again, minus the DS, because the DS is this crazy thing by itself. But talking purely in terms of the Wii, the PS3, and the 360, if you added those together and looked at the whole picture, I'd bet you PC would be even, if not bigger than those three systems in terms of the money that's changing hands and the opportunity for doing business.

So we always look at those things, and we always kind of laugh. We're doing just fine, Popcap's doing just fine, Blizzard's certainly--they're printing money down there. We always sort of shake our heads, and go, okay, sooner or later someone's going to write the bigger picture story and perceptions will change.

Shack: Interesting that you use the word "perception." Is this a perception problem?

Doug Lombardi: It is absolutely a perception problem. I mean one of the things that happens is--Microsoft has an army of PR people that work for Microsoft. They have at least two agencies that are additional armies. Nintendo I'm not as familiar with their PR outline, but I'm sure it's similar. Sony is similar. The PC has nobody. They've got people like us, in our spare time, talking to guys like you. I mean if there were hundreds of PR people stationed around the world, whose whole job was to call you every day and tell you why the PC was a great platform, your perception would probably be different.

Shack: As far as improving perception, what do you think about something like the PC Gaming Alliance? I noticed you guys aren't partners. Any particular reason behind that? Do you see a real benefit coming out of the PCGA?

Doug Lombardi: We'll see. I mean, I think it's great that a group of major players are getting together and trying to address the problem. For us, we're really busy doing Steam, building our games. We're not really members of any of the boards, whether it's the IDG, or the PC Gaming Alliance, or whatever. If those guys want our opinion, we'll give it to them, but being on those boards is kind of a job. We try to remain a small independent studio, and if our help is needed in some way other than just joining the group for the sake of being another developer sitting a table at the meetings, then we'll talk to those guys. I mean we're totally open to it, we want them to succeed, but until we see an actionable reason for us to be involved in it, you know, how we can help in a tangible way, we're going to kind of sit in the bleachers with everybody else and wish them luck.

We definitely wish them luck. Like I say, part of the reason why the PC has the perception issue is that they don't have a group of people championing it. And if the PC Gaming Alliance says, "We need to attack this from an advertising and PR standpoint," we'll be there to give them quotes. [laughs] So however we can help. Just because we're not on the board doesn't mean we're not rooting for them.

Read on for Lombardi's comments on the cycle of platform popularity, and what he feels is a major problem plaguing PC gaming.