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> "Portal 2," he explained, had only made $200 million in profit and that kind of chump change just wasn't worth it, when you could make 100s of millions a yea

> "Portal 2," he explained, had only made $200 million in profit and that kind of chump change just wasn't worth it, when you could make 100s of millions a year selling digital hats and paintjobs for guns (most of which are designed by players, not the employees!) All of the most successful tech companies are platforms: * Facebook is a platform for it's users to make posts * eBay is a platform for it's users to sell items * Amazon is a platform for retail companies * Even Google is a platform, because it's taking the Internet itself, and re-packaging it From that perspective, you can see how things wound up like this at Valve.

shrewduser 7y ago
they've made a huge mistake, their competitive advantage, somewhat like Nintendo, is that their platform has / had valve games on it.
- Impossible 7y ago
  This was Steams initial competitive advantage and it's still a benefit, but now Steam's advantage is that most commercial PC games are on Steam. Although many people still dislike Steam for various reasons, it's still overall the best game platform available on PC and is better than console and mobile platforms in many ways. One thing to thing about is that many of the biggest games (LoL, Fortnite, Minecraft, Activision Blizzard and EA titles) are not available on Steam.
- giancarlostoro 7y ago
  This right here... There are game studios that can keep churning out enough games to create their own alternatives to Steam and they have and they will succeed without Steam. What will be left is microtransactions and indie games if they arent careful.
- paulryanrogers 7y ago
  Valve has the network effect being both a top-of-mind store, distribution platform, and friend network.
  - Theizestooke 7y ago
    I think discord has taken over as friend network #1.
    - shearskill 7y ago
      Just wait until Twitch and Discord find a way to merge.
- kbenson 7y ago
  Well, given that now Epic is trying to cut into that with Fortnite as the killer/gateway app that gets the Epic marketplace on your system, maybe Valve will be forced to focus on shipping some good new games to retain their position? If that's the case, yay for competition! :) That said, I think part of what people are missing about Valve is that they are also seem to be focused on what they see as the next big thing in gaming, which is VR. They're supposedly shipping their own VR hardware (headset plus new hand controllers) soon (Aug 1st), and have publicly committed to launching a "Flagship VR" game this year. Probably not what most people want, given the cost of VR equipment (not mentioning the cost of the computer hardware to run it). Personally, I'm kinda amped up about the Occulus Quest. A hands free (~3 hour charge, can play while charging), self-contained (no PC required), $400-$500 (depending on internal storage) device? I might actually be willing to pay for that as a first VR device. That the games are all $30 or less is a bonus.
  - nordsieck 7y ago
    > Well, given that now Epic is trying to cut into that with Fortnite as the killer/gateway app that gets the Epic marketplace on your system, maybe Valve will be forced to focus on shipping some good new games to retain their position? We'll see. There have been a number of game marketplaces over the years that have tried to compete with steam. For the most part, they're all gone, and the games they hosted are gone too. At this point, it would take something pretty unusual for me to spend any money on a non-Steam game. I just don't believe other platforms will be around in 5-10 years.
    - jaggederest 7y ago
      FWIW I'm a diehard steam user from the beta in 2002, and the Epic store is every bit as good at this point. Absolutely disappointed in Valve for resting on their laurels for this long. Frankly I'm almost in the opposite camp now - why would I buy anything on Steam when it's clearly being left to rot.
      - wlesieutre 7y ago
        >the Epic store is every bit as good at this point So it has cloud saves and you can buy games to send as gifts? They have the “Buy game > download game > launch game” flow working, but there’s a heck of a lot of catching up to do. Frankly I’d say that cloud sync for game saves is table stakes for a game store in 2019. If Epic weren’t throwing around millions of dollars on exclusives and discounts, no one would use it. I’m sure there are other missing features, the ones mentioned above are just what came to mind from when I looked into EGS after Borderlands 3 was announced as an exclusive. They might be on track to catch up to Steam sooner or later, but it’s far to early to say they’ve done it.
hoorayimhelping 7y ago
>All of the most successful tech companies are platforms This is silly. 4 rather recent internet companies are meant to prove your point that the way to success is as a platform? This post ignores the vast majority of tech companies.
- JMTQp8lwXL 7y ago
  Depends on your definition of "success". As a percentage of total market capitalization, these 4 companies comprise a significant portion of that, though by percentage of total companies, it's a low figure.
- kbenson 7y ago
  > rather recent internet companies As opposed to what, ancient internet companies? Amazon, Google and Ebay were all started in the mid to late 1990's. They are all over twenty years old. Facebook, as the youngest, is about 15 years old. How many people were even on the internet in the mid 1990's? Edit: Or perhaps you meant tech companies pre-internet. But I think the fact that relatively young (although not really, even non-internet tech companies aren't that old) companies quickly rose to supersede non-internet companies (or those non-internet companies shifted to to be somewhat internet centric to not be left behind, like Microsoft) points towards more evidence for platforms (since the internet enabled platforms in a much easier way).
  - dahart 7y ago
    > How many people were even on the internet in the mid 1990's? I know that was rhetorical, but just to answer the question literally since I was curious, the estimates across multiple sources from the first page of Google results for “internet usage 1995” show it was double digit millions, somewhere in the 10M-50M range, and separate percentage estimates seem to say about 0.5% of the world’s population. Today, by contrast it’s over 50% of the planet.
    - skinnymuch 7y ago
      Holy crap. Of course the usage in 1995 would be super low. That’s around the first time I used the Internet. It was a vast ecosystem to my young eyes. So the number makes complete sense but still shocking to me. I’m guessing by Napster peak time the number was relatively much bigger.
slavik81 7y ago
* Google also owns the Android platform and the YouTube platform. * Apple owns the iOS and MacOS platforms. * Microsoft owns the Windows platform. It seems to be a very common pattern. I remember being convinced on the matter by an Economist article on European tech: https://www.economist.com/britain/2011/08/06/start-me-up https://www.economist.com/britain/2011/08/06/start-me-up
- ikonoklast 7y ago
  Don't forget Microsoft also owns the Azure, GitHub, Hololens, LinkedIn, and Xbox platforms.
- gsich 7y ago
  Google and Apple can control what software is running on their platforms. iOS is complete control, macos less, Android more or less complete control. But MS doesn't control what programs are running on the Windows platform.
  - slavik81 7y ago
    Microsoft still has soft power, but the benefit of the platform goes beyond just control. Consider that millions of people who wanted to play Valve's games had to buy a copy of Windows first.
    - gsich 7y ago
      If those people would have used their PC only for that game, yes. But that's not the case. People didn't have a PC just laying around thinking "oh crap now I need an OS". On the other hand, if you didn't have a PC back in 1998 you bought one and Windows came with it. Or you already were advanced user, built one from components and installed Windows. Either legally or not, didn't matter much.
      - slavik81 7y ago
        I understand that. Most people bought a PC with a bundled Windows license as a prerequisite to run the many applications they cared about. Those are still people who bought Windows, and some of the applications that justified their purchase were likely created by third-party developers like Valve. I was trying to highlight one of the great benefits of owning a platform: your platform is made more valuable by the work of third-parties who build on it.
LoSboccacc 7y ago
this goes far back. most successful entrepreneur in the gold rush where the concession holders and the ones that sold picks and the likes
kaidax 7y ago
> All of the most successful tech companies are platforms During a gold rush - sell shovels.

shrewduser 7y ago

they've made a huge mistake, their competitive advantage, somewhat like Nintendo, is that their platform has / had valve games on it.

Impossible 7y ago
This was Steams initial competitive advantage and it's still a benefit, but now Steam's advantage is that most commercial PC games are on Steam. Although many people still dislike Steam for various reasons, it's still overall the best game platform available on PC and is better than console and mobile platforms in many ways. One thing to thing about is that many of the biggest games (LoL, Fortnite, Minecraft, Activision Blizzard and EA titles) are not available on Steam.
giancarlostoro 7y ago
This right here... There are game studios that can keep churning out enough games to create their own alternatives to Steam and they have and they will succeed without Steam. What will be left is microtransactions and indie games if they arent careful.
paulryanrogers 7y ago
Valve has the network effect being both a top-of-mind store, distribution platform, and friend network.
- Theizestooke 7y ago
  I think discord has taken over as friend network #1.
  - shearskill 7y ago
    Just wait until Twitch and Discord find a way to merge.
kbenson 7y ago
Well, given that now Epic is trying to cut into that with Fortnite as the killer/gateway app that gets the Epic marketplace on your system, maybe Valve will be forced to focus on shipping some good new games to retain their position? If that's the case, yay for competition! :) That said, I think part of what people are missing about Valve is that they are also seem to be focused on what they see as the next big thing in gaming, which is VR. They're supposedly shipping their own VR hardware (headset plus new hand controllers) soon (Aug 1st), and have publicly committed to launching a "Flagship VR" game this year. Probably not what most people want, given the cost of VR equipment (not mentioning the cost of the computer hardware to run it). Personally, I'm kinda amped up about the Occulus Quest. A hands free (~3 hour charge, can play while charging), self-contained (no PC required), $400-$500 (depending on internal storage) device? I might actually be willing to pay for that as a first VR device. That the games are all $30 or less is a bonus.
- nordsieck 7y ago
  > Well, given that now Epic is trying to cut into that with Fortnite as the killer/gateway app that gets the Epic marketplace on your system, maybe Valve will be forced to focus on shipping some good new games to retain their position? We'll see. There have been a number of game marketplaces over the years that have tried to compete with steam. For the most part, they're all gone, and the games they hosted are gone too. At this point, it would take something pretty unusual for me to spend any money on a non-Steam game. I just don't believe other platforms will be around in 5-10 years.
  - jaggederest 7y ago
    FWIW I'm a diehard steam user from the beta in 2002, and the Epic store is every bit as good at this point. Absolutely disappointed in Valve for resting on their laurels for this long. Frankly I'm almost in the opposite camp now - why would I buy anything on Steam when it's clearly being left to rot.
    - wlesieutre 7y ago
      >the Epic store is every bit as good at this point So it has cloud saves and you can buy games to send as gifts? They have the “Buy game > download game > launch game” flow working, but there’s a heck of a lot of catching up to do. Frankly I’d say that cloud sync for game saves is table stakes for a game store in 2019. If Epic weren’t throwing around millions of dollars on exclusives and discounts, no one would use it. I’m sure there are other missing features, the ones mentioned above are just what came to mind from when I looked into EGS after Borderlands 3 was announced as an exclusive. They might be on track to catch up to Steam sooner or later, but it’s far to early to say they’ve done it.

hoorayimhelping 7y ago

>All of the most successful tech companies are platforms This is silly. 4 rather recent internet companies are meant to prove your point that the way to success is as a platform? This post ignores the vast majority of tech companies.

JMTQp8lwXL 7y ago
Depends on your definition of "success". As a percentage of total market capitalization, these 4 companies comprise a significant portion of that, though by percentage of total companies, it's a low figure.
kbenson 7y ago
> rather recent internet companies As opposed to what, ancient internet companies? Amazon, Google and Ebay were all started in the mid to late 1990's. They are all over twenty years old. Facebook, as the youngest, is about 15 years old. How many people were even on the internet in the mid 1990's? Edit: Or perhaps you meant tech companies pre-internet. But I think the fact that relatively young (although not really, even non-internet tech companies aren't that old) companies quickly rose to supersede non-internet companies (or those non-internet companies shifted to to be somewhat internet centric to not be left behind, like Microsoft) points towards more evidence for platforms (since the internet enabled platforms in a much easier way).
- dahart 7y ago
  > How many people were even on the internet in the mid 1990's? I know that was rhetorical, but just to answer the question literally since I was curious, the estimates across multiple sources from the first page of Google results for “internet usage 1995” show it was double digit millions, somewhere in the 10M-50M range, and separate percentage estimates seem to say about 0.5% of the world’s population. Today, by contrast it’s over 50% of the planet.
  - skinnymuch 7y ago
    Holy crap. Of course the usage in 1995 would be super low. That’s around the first time I used the Internet. It was a vast ecosystem to my young eyes. So the number makes complete sense but still shocking to me. I’m guessing by Napster peak time the number was relatively much bigger.

slavik81 7y ago

* Google also owns the Android platform and the YouTube platform. * Apple owns the iOS and MacOS platforms. * Microsoft owns the Windows platform. It seems to be a very common pattern. I remember being convinced on the matter by an Economist article on European tech: https://www.economist.com/britain/2011/08/06/start-me-up https://www.economist.com/britain/2011/08/06/start-me-up

ikonoklast 7y ago
Don't forget Microsoft also owns the Azure, GitHub, Hololens, LinkedIn, and Xbox platforms.
gsich 7y ago
Google and Apple can control what software is running on their platforms. iOS is complete control, macos less, Android more or less complete control. But MS doesn't control what programs are running on the Windows platform.
- slavik81 7y ago
  Microsoft still has soft power, but the benefit of the platform goes beyond just control. Consider that millions of people who wanted to play Valve's games had to buy a copy of Windows first.
  - gsich 7y ago
    If those people would have used their PC only for that game, yes. But that's not the case. People didn't have a PC just laying around thinking "oh crap now I need an OS". On the other hand, if you didn't have a PC back in 1998 you bought one and Windows came with it. Or you already were advanced user, built one from components and installed Windows. Either legally or not, didn't matter much.
    - slavik81 7y ago
      I understand that. Most people bought a PC with a bundled Windows license as a prerequisite to run the many applications they cared about. Those are still people who bought Windows, and some of the applications that justified their purchase were likely created by third-party developers like Valve. I was trying to highlight one of the great benefits of owning a platform: your platform is made more valuable by the work of third-parties who build on it.

LoSboccacc 7y ago

this goes far back. most successful entrepreneur in the gold rush where the concession holders and the ones that sold picks and the likes

kaidax 7y ago

> All of the most successful tech companies are platforms During a gold rush - sell shovels.