Valve co-founder Gabe Newell says exclusivity 'isn't a good idea' for VR

Newell asserts that Valve will help developers fund VR games even if they decide to publish on another platform.

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VR HMDs (head-mounted displays) like Oculus Rift and HTC Vive are platforms. That means the topic of exclusivity is bound to come up, as is the case with the forthcoming Rift port of Superhot. Valve is backing the Vive, but co-founder Gabe Newell assures players that his company is rooting for every horse in the race, not just theirs.

"We don't think exclusives are a good idea for customers or developers," he wrote in an email which was posted to Reddit and picked up by Gamasutra. His issues with VR exclusivity boils down to risk. "On any given project, you need to think about how much risk to take on. There are a lot of different forms of risk – financial risk, design risk, schedule risk, organizational risk, IP risk, etc."

Since VR is a relatively new medium, games developed for that medium have several types of risk baked in: new developers, making a new type of game, for a new platform. Newell explains that Valve is in a unique position to buoy up-and-coming developers by using its prodigious war chest to absorb financial risks. "We are happy to offset that [by] giving developers development funds."

Eager developers needn't think Valve will attach strings to VR games it helps bring to fruition. "They can develop for the Rift or PlayStation VR or whatever the developer thinks are the right target VR systems. Our hope is that by providing that funding that developers will be less likely to take on deals that require them to be exclusive."

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David L. Craddock writes fiction, nonfiction, and grocery lists. He is the author of the Stay Awhile and Listen series, and the Gairden Chronicles series of fantasy novels for young adults. Outside of writing, he enjoys playing Mario, Zelda, and Dark Souls games, and will be happy to discuss at length the myriad reasons why Dark Souls 2 is the best in the series. Follow him online at davidlcraddock.com and @davidlcraddock.

From The Chatty
  • reply
    June 20, 2016 12:55 PM

    David Craddock posted a new article, Valve co-founder Gabe Newell says exclusivity 'isn't a good idea' for VR

    • reply
      June 20, 2016 1:07 PM

      Unless it is exclusive to steam, he is ok with that.

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        June 20, 2016 1:16 PM

        Developer's choice.

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          June 20, 2016 2:27 PM

          like making a computer game for Windows vs Mac is a developer's choice

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            June 20, 2016 2:28 PM

            I mean... it is. Yeah? What's your point?

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              June 20, 2016 2:32 PM

              claiming it's a choice is disingenuous. It implies there're multiple equally viable choices. There aren't. You essentially don't have a choice about making your game run on Windows and you don't have a choice about selling it on Steam if you want any realistic chance of success. But since they technically do have a choice in the most literal sense (technically correct is the best kind of correct) Gabe can claim exclusives are bad.

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                June 20, 2016 3:54 PM

                You have entirely too much time to be pedantic on the Internet.

                And nothing you wrote changes the fact that Gabe is right: exclusives are bad for VR... right now. Rift and Vive are struggling to survive, and other platforms still need to get their feet under them. Competition aside, the holders of these platforms would be wise to help each other as much as business decisions allow by proliferating VR.

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                  June 20, 2016 4:40 PM

                  it's not being pedantic. It's a pretty big difference to a developer.

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                    June 20, 2016 9:36 PM

                    You're trying too hard to argue a point that doesn't change anything. You're stubborn guy and don't change your opinion very easily. Just because you'd fail on a marketplace other than steam doesn't make it not a developers choice. That's just a silly argument.

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                      June 20, 2016 11:02 PM

                      how does it not change anything if functionally a developer must put their game on Steam to have a realistic chance of success? Assuming we're talking about developers who are interested in having their games played and in making money from games they essentially must put their game on Steam. It isn't a real choice any more than it's a choice for them to eschew a Windows version and only ship a Linux version.

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                      June 20, 2016 11:12 PM

                      When the choice is life or death, it's not really a choice.

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                June 20, 2016 5:12 PM

                Doesn't matter how Gabe gets to claim it, it's still true.

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        June 20, 2016 1:26 PM

        Except the discussion isn't about distribution, just platform. Exclusive distribution hurts the industry as well.

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          June 20, 2016 1:28 PM

          EA / Ubi / Valve / Microsoft seem to be doing just fine keeping their distribution exclusive

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            June 20, 2016 1:31 PM

            Well, I said industry, not publisher. And, none of those distribute VR title; the subject of the thread. Not to mention, they aren't actually that exclusive. The main reason EA isn't on Steam is the royalty on in-game DLC; which is why Dragon Age Origin is still available - it's DLC can't be purchased in-game.

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            June 20, 2016 4:54 PM

            I stopped buying EA games when they stopped releasing on Steam. I might be one consumer, but exclusivity does limit software sales.

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              June 20, 2016 5:05 PM

              but EA now gets 30% more revenue per sale and better customer data so they have to lose a significant number of sales like yours for that not to end up a net positive for them

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            June 21, 2016 6:22 AM

            MS has learned that PC does help some profit when no one is buying your console.

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        June 20, 2016 1:33 PM

        Yeah, Valve will continue to thrive and exist whether or not VR fails. If the roles were reversed and Gabe was CEO of Oculus he'd be using exclusives just like they are.

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          June 20, 2016 5:13 PM

          No, he'd use the games to get people on his store, not lock them out.

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        June 20, 2016 2:26 PM

        He is the chief beneficiary of the de facto steam monopoly so it's hard to take anything valve does here as altruistic.

        Particularly as their solution is a goddamn loan against revenue. i.e. indentured servitude.

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      June 20, 2016 2:40 PM

      Steam's dominance as the premier digital distribution platform for gaming makes it easy for him to make these statements. I wonder how much support Steam is actually giving these developers?

      It sounds like oculus is giving more support but is attaching more strings to the deal.

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        June 20, 2016 2:41 PM

        Very little support, they will loan you money against future revenues, but if I was a developer I would take the oculus exclusive money.

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          June 20, 2016 2:47 PM

          If you take Valve's money, your game runs and sells copies for all hardware. If you take the Oculus money, then you sell your game to Oculus hardware owners only, and you can't implement touch controls since Oculus Touch still won't ship for months. I think Valve's offer is smarter.

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            June 20, 2016 2:51 PM

            It probably boils down to the financial state of the developer. Croteam declined oculus money but then again may have been a better position to survive without it. Some of the little folks might be more dire financial straits and need more help just to even ship a product.

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            June 20, 2016 3:00 PM

            what's the value in being able to sell to Vive owners right now? If you somehow sold to 50% of all Vive owners (essentially impossible) you'd get what? 30-50k sales right now? Take the Steam revenue cut from that (say 30%) and if you sold a $60 game you'd make $200k? And that's your best case scenario if you even manage to finish the game with your available funds? Not hard to take a guaranteed $50-100k instead for a timed exclusive offer.

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              June 20, 2016 4:49 PM

              Well, if (as Gabe Newell implies in the linked post) Valve is offering to front you a similar amount of cash in exchange for a higher revenue split until they recoup, it's basically no risk to the developer, and a no-brainer, right?

              Take Oculus money - sell to Oculus users. Throw in some ads and store placement for exclusivity, lets say you reach 70% of all Oculus users and 0% of Vive users in the next six months before your game is considered "old news" and heavily discounted.

              Take Valve money - sell to 40-50% of Oculus users and 40-50% of Vive users in the next six months. Currently the Vive install base is 3x the Oculus install base according to Steam hardware survey stats. (I'm ignoring stats bias towards Vive, I don't think it could be *that* high since I can't imagine someone buying an Oculus but not having any PC games on Steam.)

              Worst case is that you never make back the investment from Valve. Best case is that your game is breakout hit on both platforms, and you make 2-3x what you would have made if you were Oculus only during the prime revenue period.

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                June 20, 2016 5:01 PM

                it's hard to know without seeing the exact terms of each. But given that devs keep taking Oculus' offer it would suggest that the actual numbers end up making their offer seem better.

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                  June 20, 2016 5:10 PM

                  Well, at least it suggests that Oculus is better at selling devs on their deal than Valve is. Valve doesn't do much outreach so I could imagine that if the dev team is small and 100% focused on the game, they haven't been talking to Valve at all, whereas Oculus probably reached out to them based on their website and trailers.

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      June 20, 2016 4:11 PM

      HL3 VR for both Vive and Oculus Rift confirmed?

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      June 20, 2016 5:03 PM

      And steam being a complete monopoly dominating the marketplace is a boon for consumers.

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        June 20, 2016 5:11 PM

        does this monopoly mean i can finally uninstall uplay, origin, battle.net, and galaxy

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          June 20, 2016 5:55 PM

          Yes right after you uninstall OS/2 Warp

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        June 20, 2016 6:03 PM

        You can buy steam games from any storefront though and steam has not control over hardware.

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        June 20, 2016 6:13 PM

        A complete and utter monopoly, well, if you exclude gog, origin, windows store, greenman gaming and the humble store.

        Also, no where does Valve say if you're game is on Steam it can't be sold elsewhere.

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          June 21, 2016 12:37 AM

          I hear Netscape is doing pretty well these days.

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      June 20, 2016 5:37 PM

      Nope. Not posting in another one.


      Fuuuuuuuuuuuuu

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      June 20, 2016 9:48 PM

      What they need is a standardized API like how graphics cards have so you can get whatever brand VR set you want and the games will play on it. Right now it's like when 3D cards first came out and it was a crapshoot. They need to make it like now where it doesn't matter if you have an nvidia or ati card, the game will work on both

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      June 21, 2016 6:23 AM

      Is this what you say when you don't want to support your product, or help developers financially?

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