4 ms·

Aside from the Valve's revenues per employee, what I find interesting about Valve is their Steam platform. Steam (and other platforms for downloading and strea

by mjfern 16y ago

Aside from the Valve's revenues per employee, what I find interesting about Valve is their Steam platform. Steam (and other platforms for downloading and streaming videogame content) are a disruptive threat to Gamestop and the videogame sales of other retailers, such as Wal-Mart. Given that online distribution has now disrupted music, newspapers, books, movies/video, and now tv/broadcast, I'm surprised that investors think Gamestop is worth $3b.

georgemcbay 16y ago
One thing Gamestop still has going for it is used game buyback and resell, which IIRC is where they make the vast majority of their money. Considering this market is completely unserved by Steam and other online delivery platforms, I can see why Gamestop would still be valued pretty highly, for now. Of course, over time I suspect console makers will move more and more towards digital distribution for all games, but that won't happen overnight or even any time soon.
- r00fus 16y ago
  >Of course, over time I suspect console makers will move more and more towards digital distribution for all games, but that won't happen overnight or even any time soon. This is why Gamestop should be finding support (ie, EFF, ACLU, legislators) to safeguard First Sale doctrine for digital purchases: http://en.wikipedia.org/wiki/First-sale_doctrine http://en.wikipedia.org/wiki/First-sale_doctrine
  - ianferrel 16y ago
    Is there any reason to believe that Gamestop will get any of the business from digital resale? I could see eBay trying to find that support, but Gamestop's just a dinosaur.
- city41 16y ago
  > Of course, over time I suspect console makers will move more and more towards digital distribution for all games, but that won't happen overnight or even any time soon. Yes but they will do that without Steam. Sony, Nintendo and Microsoft already have infrastructure in place for it and already digitally distribute small games. They just need to make it scale to full releases.
city41 16y ago
Yes but thus far Steam has had no real impact on consoles. In fact Valve recently opened pre-orders for Portal 2, but only for the console versions leaving the PC/Steam version out. Until Valve can figure out what to do about consoles, Steam will remain valuable but stuck on the fringes. I have no hard data but I'm willing to bet console games outsell PC games by quite a bit.
- sid0 16y ago
  That's just completely untrue. PC gaming worldwide is much bigger than console gaming, and even in the US traditional PC games are bigger than any single console. http://www.gamesetwatch.com/newzoo_2010spend.jpg http://www.gamesetwatch.com/newzoo_2010spend.jpg One reason is that AFAIK in Europe and most of the developing world, retail PC games are much cheaper than console games. (Here it's US $15 vs $55-60) Also, Portal 2 is now up for preorder on Steam. edit: of course, with digital distribution you also get a much larger cut [1] (so you don't need to sell as many copies as you do on a console to get the same amount of money). For me, the biggest plus with digital distribution is that you get access to niche genres. I'd never imagine finding games like Reccetear or Super Meat Boy in a local store, but they're available on Steam. It's the same deal with music: outside of popular bands like Massive Attack and The Beatles, I've never been able to find any music I like in a local store. More generally, this is one of the reasons I fervently believe the Internet is the most important human invention since fire: if you take the time to explore your options, you need no longer be tied down to mainstream preferences. [1] http://www.mcvuk.com/features/808/OPINION-Retail-vs-Steam http://www.mcvuk.com/features/808/OPINION-Retail-vs-Steam
- krakensden 16y ago
  Interestingly, Steam was partly a reaction to the difficulty of getting PC games into b&m stores.
potatolicious 16y ago
IMHO it's more than just disruption - Valve has some of the most die-hard fans and supporters I've ever seen for any company in the game industry (myself included). They've done this by being relentlessly customer-focused. Where EA will release a game, and then sell you unlock codes for content already on the disc as "downloadable content", Valve has ceaselessly offered perks for new and existing customers: years worth of updates to Team Fortress 2, all for free. Left 4 Dead too. Hell, when they introduced Steam Achievements they went back and added support for it in most of their back catalog! That's dedication to the customer. And no small surprise, people flock to Valve, even when it comes to buying 3rd party games.
- InclinedPlane 16y ago
  Indeed. Valve seems to legitimately care about the quality of their games and about the enjoyment of players. They spend more time refining their games rather than just putting out what they think will make money for a few weeks. And then they continue updating them and adding new content. This shows through in their Steam platform as well. They've built an enormous amount of customer trust and goodwill, and this has been paying off immensely as more and more people use steam as a go-to platform for game purchases.

by mjfern 16y ago

georgemcbay 16y ago

One thing Gamestop still has going for it is used game buyback and resell, which IIRC is where they make the vast majority of their money. Considering this market is completely unserved by Steam and other online delivery platforms, I can see why Gamestop would still be valued pretty highly, for now. Of course, over time I suspect console makers will move more and more towards digital distribution for all games, but that won't happen overnight or even any time soon.

r00fus 16y ago
>Of course, over time I suspect console makers will move more and more towards digital distribution for all games, but that won't happen overnight or even any time soon. This is why Gamestop should be finding support (ie, EFF, ACLU, legislators) to safeguard First Sale doctrine for digital purchases: http://en.wikipedia.org/wiki/First-sale_doctrine http://en.wikipedia.org/wiki/First-sale_doctrine
- ianferrel 16y ago
  Is there any reason to believe that Gamestop will get any of the business from digital resale? I could see eBay trying to find that support, but Gamestop's just a dinosaur.
city41 16y ago
> Of course, over time I suspect console makers will move more and more towards digital distribution for all games, but that won't happen overnight or even any time soon. Yes but they will do that without Steam. Sony, Nintendo and Microsoft already have infrastructure in place for it and already digitally distribute small games. They just need to make it scale to full releases.

city41 16y ago

Yes but thus far Steam has had no real impact on consoles. In fact Valve recently opened pre-orders for Portal 2, but only for the console versions leaving the PC/Steam version out. Until Valve can figure out what to do about consoles, Steam will remain valuable but stuck on the fringes. I have no hard data but I'm willing to bet console games outsell PC games by quite a bit.

sid0 16y ago
That's just completely untrue. PC gaming worldwide is much bigger than console gaming, and even in the US traditional PC games are bigger than any single console. http://www.gamesetwatch.com/newzoo_2010spend.jpg http://www.gamesetwatch.com/newzoo_2010spend.jpg One reason is that AFAIK in Europe and most of the developing world, retail PC games are much cheaper than console games. (Here it's US $15 vs $55-60) Also, Portal 2 is now up for preorder on Steam. edit: of course, with digital distribution you also get a much larger cut [1] (so you don't need to sell as many copies as you do on a console to get the same amount of money). For me, the biggest plus with digital distribution is that you get access to niche genres. I'd never imagine finding games like Reccetear or Super Meat Boy in a local store, but they're available on Steam. It's the same deal with music: outside of popular bands like Massive Attack and The Beatles, I've never been able to find any music I like in a local store. More generally, this is one of the reasons I fervently believe the Internet is the most important human invention since fire: if you take the time to explore your options, you need no longer be tied down to mainstream preferences. [1] http://www.mcvuk.com/features/808/OPINION-Retail-vs-Steam http://www.mcvuk.com/features/808/OPINION-Retail-vs-Steam
krakensden 16y ago
Interestingly, Steam was partly a reaction to the difficulty of getting PC games into b&m stores.

potatolicious 16y ago

IMHO it's more than just disruption - Valve has some of the most die-hard fans and supporters I've ever seen for any company in the game industry (myself included). They've done this by being relentlessly customer-focused. Where EA will release a game, and then sell you unlock codes for content already on the disc as "downloadable content", Valve has ceaselessly offered perks for new and existing customers: years worth of updates to Team Fortress 2, all for free. Left 4 Dead too. Hell, when they introduced Steam Achievements they went back and added support for it in most of their back catalog! That's dedication to the customer. And no small surprise, people flock to Valve, even when it comes to buying 3rd party games.

InclinedPlane 16y ago
Indeed. Valve seems to legitimately care about the quality of their games and about the enjoyment of players. They spend more time refining their games rather than just putting out what they think will make money for a few weeks. And then they continue updating them and adding new content. This shows through in their Steam platform as well. They've built an enormous amount of customer trust and goodwill, and this has been paying off immensely as more and more people use steam as a go-to platform for game purchases.