Valve Interview Part 1: Doug Lombardi on PC Gaming

We catch up with Valve's marketing VP for a long chat, in which he tells us that the PC platform's problem is one of perception.

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.

It's hard to be able to have games that scale, and to write performance on the high end, and write performance on the bottom end, but you know, winning in any industry means some hard work.
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. _PAGE_BREAK_

Shack: Do you see a PC gaming resurgence on the horizon, at least in terms of how people think about the platform?

Doug Lombardi: I think you can see it in this room. I don't know what the final total is here, but I think there are eight PC games and three console games here?

Shack: Yeah, about that.

Doug Lombardi: And this is EA's "getting ready to start clubbing you guys over the head for E3" campaign that's beginning. So I think it's starting to happen. I think we saw some of that last Christmas too. A lot of the big titles were Orange Box on the PC, Crysis, World of Warcraft: The Burning Crusade did really well. I think this year you're going to see a lot of the same thing with Left 4 Dead, Spore, Battlefield Heroes. There's a lot of people making great PC product. id is getting ready to rev up a bunch of really great PC product, and those guys are always great. They've been legends on the PC since, what, '93? So I think it always sort of comes and goes.

There's this kind of roller-coaster ride: the consoles launch, their PR agencies go out and do everything they can to try and say the PC is dying, they'll prop up the sales of the console, the console starts to get old in the tooth, the PC starts leapfrogging in terms of graphics and bigger releases. So we're almost what, mid-way through the console lifecycle now? So yeah, over the next two years the story's going to come back that the PC is bigger, things like Left 4 Dead and Spore, the id titles are going to come out and everybody's going to be like, "Wow, those console titles are looking kind of crappy."

Shack: Do you think PC system requirements are an important part of this perception problem?

Doug Lombardi: Oh, I think it's a big problem. I think it's a big problem. You know, we try to be really responsible. Going back to Half-Life 1, we tried to be really responsible in saying the average PC gamer should be able to play this game start to finish and have an enjoyable experience. Now, they're not going to have the best graphics, they're not gonna have every shader turned on and what have you. But they're gonna have a decent framerate, all the monsters and creatures are going be there, and all the dialogue is going to be there. From a basic content and experience level, they're going to be able to go through that.

We take that Steam hardware survey twice a year, and we publish those results of usually a million or more gamer systems. We publish those very consciously to try to help other people realize like--here's a million people on Steam and what their system requirements look like. No, you can't drop support for DirectX 9 yet. There's still 70% of the people playing on Steam today are running on DX 9 cards. So you've gotta be cognizant of that, and RAM and CPU speeds, same way.

In the old days we had sort of this weird, "Okay, here's some of what the card guys and CPU guys are telling us they're gonna be selling, and here's this voodoo crystal ball thing we're going to do and try to guess." Now that Steam survey gives us an exact data point to work from. You've got a million people, we do it every six months, and we can go back and say 18 months ago it was here, and here's the adoption rate, and we can see the trajectory. It's pretty black and white.

I think hopefully one of the things we did really well with Orange Box, and we've heard this from a lot of people: "I fired up Portal on my three year old machine and it ran great." And that helps us sell more units, and helps the perception of the PC industry. People buy a new game and their system is 18 months old and it doesn't run, or it's unplayable, that hurts the PC industry. That person who just spent money on a PC game is going to have a question mark next time he walks into the store. And he's gonna say, "Geez, I don't know, if I buy it on a console I know it's going to work."

So I mean, I think people just need to do a better job of looking at where gamers are at, being more honest about the system requirements they put on the box, and just sort of taking a step back and saying, "Gameplay is king, performance is second, and graphics are somewhere after that." People have said to us, you know, Portal is cool, but it wasn't the prettiest game. Well, okay, it sold a whole lot, it was named game of the year by over 30 outlets, and many of the people who played it told me they finished it and had a great time. I would much rather have that than have people tell me it was the prettiest game that came out last year.

Shack: Does the responsibility lie somewhat with the hardware manufacturers to market their products in a reasonable way, or is it up to the developers to set sane requirements?

Doug Lombardi: Oh I think it's totally the fault of the developers. Totally the fault of the developers. I mean the graphics guys, their job to keep pushing the envelope, and as they push the envelope, move the lower-end cards down to a nice price point, so that there's always this evolution that's happening. If you're a hot rod type of guy, and you want to spend $400 on the latest thing, you want to have a smoking machine, and when Left 4 Dead comes out you want to run it at its highest resolution with killer framerates, and call your buddies over for a beer and make them all drool over your system, awesome. But if you're just a guy who wants a decent PC for less than a thousand bucks, and wants to be able to run games on it, there should be a card out there that runs games at a decent famerate and decent fluidity. Then it's on us to write for both of those guys.

It's a business decision, really. Too often I think the development side of things runs the house. People say, "Oh, we've got to target those high-end core gamers. We have the best graphics, sweetest screenshots, and we'll get more press, and we'll win." Okay, well, you'll win in the pre-launch phase. Then when the game comes out, and 60-70% of the people who don't have that sweet machine--maybe even higher numbers, maybe 80% don't have that sweet machine--well you just cut off your ability to sell to all of those guys.

You know, it's hard to be able to have games that scale, and to write performance on the high end, and write performance on the bottom end, but you know, winning in any industry means some hard work, and there's a certain level of hard work that developers have to take responsibility for. And when you see games that do that, where they have solid gameplay, and they scale well across machines, usually those games do well.

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.

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