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Gabe Newell says 99% of the industry thought Steam won't work as a distribution platform at the start, because "people want physical copies"

ArtHands

Thinks buying more servers can fix a bad patch

"The decision not just to ship Half-Life 2 with Steam but to actually require Steam, even with the versions that were purchased at retail in a box, was the most interesting decision of all those," says Greg Coomer, who worked with Gabe Newell at Microsoft before becoming one of Valve's first employees. "Because it turned out to be an incredibly important decision for the future of the company, and a lot of us were nervous, and a lot of the people who'd been at Valve for a long time, since the very beginning, were the most nervous about that decision.

"So it was one of the rare exceptions to our [usual] decision-making process, and Gabe had to really step in and say, 'No, actually we're doing it this way.'"

The consequence of this decision was that Half-Life 2 became not only a best-selling smash hit for the company, but one whose very success made it a phenomenal Trojan Horse for Steam as a platform. Steam was a digital storefront that was already installed on your PC when most of us hadn't heard the words "digital storefront" before. Put like that, it almost seems like a fait accompli: But no one at the time, outside of Valve, thought Steam would work.

"It was a very weird time," says Gabe Newell. "I don't think people understand how many times we would go to people and say, 'No, you will be able to distribute software over the internet' and have people say, 'No, it will never happen.' I'm not talking about one or two people. I mean like 99% of the companies we talked to said 'It will never happen. Your retail sales force will never let it happen.'

"But also people would say, 'Users aren't gonna want this... people want physical copies.' There were so many bad faith arguments that were being made. Retail sales is not the goal, right. It's actually an impediment, it's somebody who sits between you and the customer."
 

Ozzie666

Member
I still don't want it, I prefer physical games.

Gabe was a visionary and maybe saved PC gaming to a degree. I still find it absurd that companies were willing to accept the 30% cut Valve, google and apple get. Gabe unleashed a beast. 30% on EVERYTHING including Microtransactions. I'm not even sure Sony or Nintendo got such margins on Cd/Carts back in the day. Alot of countries digital games are WAY more expensive than phsysical, the arguement was to protect brick and mortar stores, not sure that holds true now. Digitial should always be cheaper.

Now we have execs telling us we own nothing and we should be happy, thank Gabe (partially kidding).
 
remember these old memes
cdDMpky.gif
ne4ROcl.gif
 

StreetsofBeige

Gold Member
I still find it absurd that companies were willing to accept the 30% cut Valve, google and apple get. Gabe unleashed a beast. 30% on EVERYTHING including Microtransactions. I'm not even sure Sony or Nintendo got such margins on Cd/Carts back in the day.
Probably because for lots of game companies, a digital store means the games can be sold as long as Steam is around, they handle the ecom site, and they dont have to worry about shipping boxes, running out of print, or simply the store doesnt want to carry the game.

Giant companies can handle retail, but for those smaller scale games Steam and GOG saved them because most places wont carry their game in modern day. Only so many slots on a physical shelf.
 

Darkmakaimura

Can You Imagine What SureAI Is Going To Do With Garfield?
I'm 100% for digital distribution if the games are DRM free. You can just back them up on physical media.

Retail physical is pretty much a coaster nowadays since almost every game that comes out requires patching. So it's almost pointless to have physical media unless it only requires a minor patch or no patching at all or in the case of LRG, the patches are on the disc or cartridge.
 

Magic Carpet

Gold Member
Next Steam Machine will be a printer that can put box art on foldable cardboard to put on the shelves of the remaining holdouts. They can also print the download code you can put inside. :)
 

bender

What time is it?
Some people just see the world different. I couldn't imagine gaming without physical discs. Just as I couldn't imagine movie/TV streaming either. Of course that's why there is a grand canyon between me and all the rich people of the world*.

Tom Hanks Dipshit GIF


*that doesn't include jocks like HeisenbergFX4 HeisenbergFX4 . That is an entirely different grand canyon
TnP5zl.gif
 
I mean these were straight facts for the time. We were all buying games at Best Buy, Gamestop, EB Games etc. Digital was not even close to being a thing. I still remember buying HL2 and being told I need to install this stem thing and there was some preload that took like 2hrs. I think they also offered HL2 digital straight away if you wanted to buy it from Steam. They definately pioneered the digital sales and are pretty much why you barely ever see boxed PC games.
 

BlackTron

Member
Some people just see the world different. I couldn't imagine gaming without physical discs. Just as I couldn't imagine movie/TV streaming either. Of course that's why there is a grand canyon between me and all the rich people of the world*.

Tom Hanks Dipshit GIF


*that doesn't include jocks like HeisenbergFX4 HeisenbergFX4 . That is an entirely different grand canyon

I guess during the days of cable TV you swore it off and only watched VHS tapes?
 

FoxMcChief

Gold Member
Some people just see the world different. I couldn't imagine gaming without physical discs. Just as I couldn't imagine movie/TV streaming either. Of course that's why there is a grand canyon between me and all the rich people of the world*.

Tom Hanks Dipshit GIF


*that doesn't include jocks like HeisenbergFX4 HeisenbergFX4 . That is an entirely different grand canyon
Consoleless gaming from PlayStation and Xbox is the future.
 

Cyberpunkd

Member
Digitial should always be cheaper.
No. Digital is simply a means of distribution, the bits are the same. Company is getting higher margins by cutting the middle man. Nobody is saying shoes you buy at Nike website or even retail store should be cheaper than what you buy at a shoe reseller.
 

Denton

Member
I still find it absurd that companies were willing to accept the 30% cut Valve, google and apple get.
30% was an absolutely amazing sweet-ass deal compared to the 70+% that retailers took.
And these days, it is lot less than 30% since Valve:
- lowers it to 20% after reaching sales milestone
- subsidizes steam key creation which can be resold outside Steam and Valve gets 0%
- subsidizes retail steam wallet cards
 
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Three

Member
30% was an absolutely amazing sweet-ass deal compared to the 70+% that retailers took.
And these days, it is lot less than 30% since Valve:
- lowers it to 20% after reaching sales milestone
- subsidizes steam key creation which can be resold outside Steam and Valve gets 0%
- subsidizes retail steam wallet cards
Did retailers really take 70%?
 
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In 2003 people were rocking phones like this with 56 kbps dial up internet in their houses, you can't blame them.
2004 Motorola Razr makes modern iPhones seem really big and clunky by comparison.
While I do believe physical is indeed important, I was still there Day 1 with Steam and Half Life 2. I honestly think that era was the best era in gaming. Early steam, ps2, GameCube and Xbox.
PS2 unit sales being unmatched over 20 years later makes the "best era in gaming" a sad fact.
That said, the PS2, like Steam, will be better without physical media. Digital-only games will drop PS2 load times down to nil and the reduction in piracy would mean an everlasting generation just like Steam has.
For consoles physical media will always be the most convenient means of telling the console which game to play and a way to boot directly into games without dealing with a PC home screen.
Discs can continue to serve this function in the digital-only game future without having any game files on them and game boxes can continue to have great art, booklets and maps.
30% was an absolutely amazing sweet-ass deal compared to the 70+% that retailers took.
And these days, it is lot less than 30% since Valve:
- lowers it to 20% after reaching sales milestone
- subsidizes steam key creation which can be resold outside Steam and Valve gets 0%
- subsidizes retail steam wallet cards
The advantages are massive:
-Not losing sales in perpetuity to a 2nd hand resale market and knowing actual game sales numbers as opposed to rough estimates.
-Being able to sell games forever and maximize ROI as opposed to selling games for a brief physical game 'generation'.
-Users get permanent access to every version of each game from the very first to the very last and can turn updates on or off.
-Having a great return policy and 2hr trial period gives users the confidence to try and buy games they would never risk if refunds weren't possible. Great games win sales this way.
-The return policy gives Steam data they use to determine whether or not any game should be allowed on their platform. Games with too many returns can be kicked off, whole platform benefits.

All the same benefits apply to consoles with the only downside being the loss of discs as 'game selectors' that allow users to boot directly into games without stopping at a menu to pick a game PC style. SONY could move the PS to digital-only and give every game on PSN an optional tick box where they'll drop ship you a physical boxed disc for $10.
 

killatopak

Gold Member
It’s based on trust.

Do I trust these platforms to take care of my property? Obviously Steam gained people’s trust over time. Steam didn’t explode into what it is today in an instant.

Physical games gives me control of what I own. It’s merely weighing the pros and cons of convenience and ownership with regards to what type of distribution method I will purchase a game on personally speaking.
 
Did retailers really take 70%?
That's nothing, resale takes 100% over and over and over until the end of time.
Zero-replay value studios like Remedy knowing all of their games are being sold back to gamestop 8hrs after they're bought and then sold at a discount over and over again.
 
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Midn1ght

Member
30% was an absolutely amazing sweet-ass deal compared to the 70+% that retailers took.
And these days, it is lot less than 30% since Valve:
- lowers it to 20% after reaching sales milestone
- subsidizes steam key creation which can be resold outside Steam and Valve gets 0%
- subsidizes retail steam wallet cards
This is what a lot of people praising physical media tend to forget, publishers lose more than 30% when selling a box and a disk, don't know if it's 70% but I read a while ago that it's at least 50%. Physical also tend to go down in price quicker and the second hand market is bringing 0 to these companies.

I like physical, I grew up in the 90', "owning" your game is nice but I find it funny when people are shitting on Valve and co for taking 20-30% but praise physical media to no end. Same goes with people who are shitting on most companies going multiplat, you can't expect 300 million dollar realistic looking game every year to be profitable if they stay exclusive and if a fair part of those sales are physical, it's just impossible.

If you love physical games and still want them around for many years, you might as well accept that they need to sell digitally on as many platform as possible.
 

Three

Member
That's nothing, resale takes 100% over and over and over until the end of time.
Zero-replay value studios like Remedy knowing all of their games are being sold back to gamestop 8hrs after they're bought and then sold at a discount over and over again.
I mean yeah that's second hand sales where they've got the money from the initial sale. I suspect that's why Remedy went digital only on Alan wake 2 which kind of sucks to be honest. I'm surprised retail took 70% though. Seems higher than I remember it.
 

artsi

Member
If Half-Life 3 released on a UHD for PC tomorrow, I bet it would sell 40 million copies before next summer.
(Along with dramatically enhancing sales of blu-ray PC drives.)

HL2 released in 2004

When HL3 releases in 2030's I'm afraid it'll be just 40-50 year old boomers with kids who even remember what Half-Life is and they won't have time to play games anymore so it'll bomb.
 

Drew1440

Member
I hate how it killed physical media for PC games, but to be honest that's also on the publishers and their poor implementations of DRM. Some of them (EA) implemented a backwards approach where you have to activate your game by connecting to a server, which would grant you one activation unlock out of a limit of 10, of which every install counts as one. Meaning if you have to reformat Windows and reinstall the game on the same PC, it would count as another unlock. And there's the always online shit for single player game (Spore/Simcity).
Other solutions like Games For Windows Live were fine once implemented but suffered from poor adoption and support.
There's nothing stopping a publisher from putting an unlocked/patched exe file on the disc and releasing it as a collector's edition, and I think that should be an option.
 

BlackTron

Member
This is what a lot of people praising physical media tend to forget, publishers lose more than 30% when selling a box and a disk, don't know if it's 70% but I read a while ago that it's at least 50%. Physical also tend to go down in price quicker and the second hand market is bringing 0 to these companies.

I like physical, I grew up in the 90', "owning" your game is nice but I find it funny when people are shitting on Valve and co for taking 20-30% but praise physical media to no end. Same goes with people who are shitting on most companies going multiplat, you can't expect 300 million dollar realistic looking game every year to be profitable if they stay exclusive and if a fair part of those sales are physical, it's just impossible.

If you love physical games and still want them around for many years, you might as well accept that they need to sell digitally on as many platform as possible.

Painful to read.
 

Cyberpunkd

Member
The freedom of a trackless physical currency under your complete control should go away for everyone bc annoying spare coins, loving the takes in this thread
Are you an arms dealer? Or just one of those merchants that love to deal with cash so they can report minimal revenue and pay no tax, by consequence I have to compensate?
 

rofif

Can’t Git Gud
Well duh. Why do I always have to explain this.
I think this is the ultimate reasoning why "but steam is digital only and it's great but consoles digital is not the same?! lol" is idiotic.

Having a game on steam/pc IS LIKE AHVING A PHYSICAL COPY:
-You get access to files
-You can copy/move/backup
-You can mod/crack/play any older version of the game.
-You do whatever you want with it
-Cheap because key websites fight over pricing and deals!

On Console like ps4/ps5 with DIGITAL ONLY:
-No Files access
-No cracking
-No offline play (after like 2 weeks)
-0 ownership
-No way to play old version of the game.
-Expensive because prices and availability is only up to PSN. if they take the game down (like driveclub) you cannot get it. You can still on disc.

-You can still get hacked, have your games taken away etc on both of course


But here comes disc console gaming, adding back some of these rights, so it's closer to steam and even a bit better in some aspects:
On console like ps4/5 WITH A DISC:

-Ownership, game is on my shelf. nobody takes it away (+ I like looking at it)
-Ability to play offline and on any account, game is not tied to account, cannot be banned.
-Ability to play 1.0. IF I WANT, I can fight radahn 1.0 because I CAN and I might want to.' Digital foundryt uses it a lot to compare launch version to patched too.
-Lates example, silent hill 2. On pro, it's better to play disc 1.0 version. Also, disc 1.0 version is an interesting curiosity since some cutscenes and stuff is different
-I don't need to rely on shitty psn speeds outside of patches and dlc.
-Of course can sell, exchange and all that stuff
-Retailers fight over prices and deals. I never pay full price for a game. there is always 5-10% off + free shipping to post box (we have that cool thing in poland).
Outside of not having to reach for a disc, which is an idiotic argument and maaaybe moving to another country, digital psn has nothing over physical.


Most games are still palyable offline and don't require patching... BUT IF YOU PATCH IT, YOU NEVER NEED TO GO ONLINE AGAIN. You can have the game installed, patched and never connect online again and the game will launch patched if you put the disc on. As opposed to digital only games that will stop working if you don't connect after some time.

And the "games are just download codes" is fuckign bullshit. Most games are playable offline an without a patch
qtmdAf2.png
FbT4WTJ.png
 
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BlackTron

Member
Are you an arms dealer? Or just one of those merchants that love to deal with cash so they can report minimal revenue and pay no tax, by consequence I have to compensate?

Neither, I was just raised American lol. I guess you're one of those "why have a problem with what NSA is doing if you have nothing to hide" types. I just have to live in the same world that is imploding.
 

BlackTron

Member
2004 Motorola Razr makes modern iPhones seem really big and clunky by comparison.

PS2 unit sales being unmatched over 20 years later makes the "best era in gaming" a sad fact.
That said, the PS2, like Steam, will be better without physical media. Digital-only games will drop PS2 load times down to nil and the reduction in piracy would mean an everlasting generation just like Steam has.
For consoles physical media will always be the most convenient means of telling the console which game to play and a way to boot directly into games without dealing with a PC home screen.
Discs can continue to serve this function in the digital-only game future without having any game files on them and game boxes can continue to have great art, booklets and maps.

The advantages are massive:
-Not losing sales in perpetuity to a 2nd hand resale market and knowing actual game sales numbers as opposed to rough estimates.
-Being able to sell games forever and maximize ROI as opposed to selling games for a brief physical game 'generation'.
-Users get permanent access to every version of each game from the very first to the very last and can turn updates on or off.
-Having a great return policy and 2hr trial period gives users the confidence to try and buy games they would never risk if refunds weren't possible. Great games win sales this way.
-The return policy gives Steam data they use to determine whether or not any game should be allowed on their platform. Games with too many returns can be kicked off, whole platform benefits.

All the same benefits apply to consoles with the only downside being the loss of discs as 'game selectors' that allow users to boot directly into games without stopping at a menu to pick a game PC style. SONY could move the PS to digital-only and give every game on PSN an optional tick box where they'll drop ship you a physical boxed disc for $10.

You're still talking about Sony re-releasing PS2 to save gaming?

Not gonna lie I'm actively offended by how dumb this is and that I saw it in more than one thread
 

Facism

Member
Steam was soooo fucking shit back in the day

The pain of having to use Steam for Multiplayer after WON closed was immense. Roll of the dice if you could stay connected to servers, plus half the console commands wouldn't work. If you played MP mods, good luck if they got updated to use steam properly.

Sorted itself out eventually, but wasn't really fit for purpose initially.
 
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