Valve's Gabe Newell On Piracy: It's Not a Pricing Problem

New submitter silentbrad writes with a followup to our discussion this morning about Ubisoft's claims of overwhelming game piracy. An article at IGN quotes a different point of view from Gabe Newell, CEO of Valve: "In general, we think there is a fundamental misconception about piracy. Piracy is almost always a service problem and not a pricing problem. For example, if a pirate offers a product anywhere in the world, 24 x 7, purchasable from the convenience of your personal computer, and the legal provider says the product is region-locked, will come to your country 3 months after the U.S. release, and can only be purchased at a brick and mortar store, then the pirate's service is more valuable. Most DRM solutions diminish the value of the product by either directly restricting a customers use or by creating uncertainty." The quote was taken from an interview at The Cambridge Student Online, in which Newell speaks to a few other subjects, such as creating games for multiple platforms and e-sports.

Comments

Hmmm

[hedwards]

And yet Steam has that USD=Euro conversion and region locked pricing.

Re:Hmmm

[gman003]

It has the region locks only because certain publishers insist on it. Valve doesn't use it on any of their own games.

The Euro issue I don't know about. Try emailing Gabe about it.

Re:Hmmm

[bignetbuy]

And they continue to screw the Aussies on game prices with most games costing TWICE as much as their U.S. versions.

Re:Hmmm

[gman003]

If they tried to block "games aren't allowed to be unlocked at different times in different regions", all the publishers have to do is consider Steam the "last region" - not putting their games on Steam until it's made its worldwide launch. It's too simple to get around in a way that's bad for Steam.

And Valve isn't responsible for enforcing their ethical practices on others. I'm sure they're happy to take a cut of anyone's money.

Re:Hmmm

[houstonbofh]

You're right it's not their responsibility to do that. But not for the reason that you think, they've unleashed this pox upon the gaming community, but it isn't their responsibility because their responsibility is purely to the shareholders.

Just like how there's no guarantee that they won't at some future time take everybody's games away or require a subscription to access them.

Corporate suicide is not in the best interest of the shareholders. And if you read the article, (Asking a lot I know) you will find Gabe saying that actually serving your customers IS in the best interest of the shareholders.

Re:Hmmm

[D'Sphitz]

Why don't you explain why Valve should take it upon themselves to be the video game police and demand their competitors lower their prices and change their release strategies.

Re:Hmmm

[grim4593]

On the other hand I almost exclusively purchase games through Steam and a few of my friends are the same way. If a publisher such as EA pulls their games from Steam they are potentially removing a large part of their market. Steam has a lot of momentum with their large gaming library, constant game sales, and community. Systems like Origin, Impulse, etc, don't have the same draw.

Re:Hmmm

[Omestes]

now we have origin. which sucks, but we can't play BF3 without it... Steam is losing customers at a slow trickle.

I doubt they are too worried. I generally won't use a game if it uses a different store than Steam anymore, it isn't worth the hassle or bloat. 90% of the games on my computer are on/through Steam, so convenience takes a large dip when I have to install another full store/distribution service just to play a single game. I'm guessing I'm not alone in this, there has to be a demographic separate from the "gotta have it now" crowd. I had a couple games through Impulse (pre-Gamestop, now I wouldn't touch it with a 10' pole), and I found myself ignoring them completely since they weren't as available as Steam.

I also stick with Steam for their insane and frequent sales, and their growing support for games in the various Humble Bundles. Its shocking the amount of cash I've split on random Steam impulse buys.

As for EA, I can live without them, though I find it sad what they've done to places like Bioware (used to be one of my favorite studios, but Dragon Age 2 pretty much killed that).

I know someone here is going to yell at me for supporting DRM... I can live with it. Gabe has a point, the value added bit that Steam has keeps me from caring too much. Steam actually manages to add value to my purchases, while keeping publishers happy with control. No, Steam isn't perfect, and yes, Steam annoys the hell out of me from time to time. But the future is DRM (love it or hate it) and digital distribution, and I'd rather have Steam leading the pack than EA, or Microsoft, Valve at least compromises between DRM and their users wants/needs/happiness, as opposed to the others who would love to eat your rights for dinner, with your enjoyment and experience as a nice after-dinner mint.

Re:Hmmm

[The Analog Kid]

It has the region locks only because certain publishers insist on it. Valve doesn't use it on any of their own games.

You mean like Valve did with The Orange Box?

Re:Hmmm

[complete loony]

The biggest issue I have with that argument, is that prices listed in AU via steam *are still listed in USD*. We're not being told to pay AUD $92 for Skyrim. We've being told to pay USD $89.95 vs the price quoted for the US of $59.95.

Re:Hmmm

[Zancarius]

I also stick with Steam for their insane and frequent sales, and their growing support for games in the various Humble Bundles. Its shocking the amount of cash I've split on random Steam impulse buys

This is a good reason to stick with Steam, and a good chunk of the reason why I refuse to go elsewhere anymore. The remainder had to so with the availability of indie games. Let's face it, there are a lot of indie developers who sell games through Steam and sometimes Steam alone.

Origin? No thanks, not with its horribly invasive nature, and the fact that it's an EA product. Screw that.

I'd like to see the poster you were replying to show statistics backing up his claim that Steam is losing customers in a "slow trickle," but I think he's simply repeating what he's been told. If anything, Steam is probably gaining sales. Every holiday, I buy up a bunch of game packs for family and friends as virtual stocking stuffers. I know I'm not alone.

Re:Hmmm

[geminidomino]

Duh, yes, there is. As annoying as they are, ToS, EULA, purchase agreements, etc go both ways. And the way Steam's is worded, along with applicable laws, means they would have to either make the game available for download without Steam DRM, or refund you the purchase price.

False. Whoever modded you up clearly has never read the TOS, but you're wrong. (As far as the 'applicable laws' part, such laws would be rather pro-consumer, so I can only assume they don't apply here in the 'States)

There's nothing in the Steam TOS about refunds (other than several mentions of things being NON refundable) for one-time game purchases (as opposed to subscriptions) if they cancel you. And if they do, whether or not they give you access to a stand-alone copy is at their option. There is nothing in the TOS that requires them to.

C. Termination by Valve.

1. In the case of a recurring payment Subscription (e.g., a monthly subscription), in the event that Valve terminates or cancels your Account or a particular Subscription for convenience, Valve may, but is not obligated to, provide a prorated refund of any prepaid Subscription fees paid to Valve.
2. In the case of a one-time purchase of a product license (e.g., purchase of a single game) from Valve, Valve may choose to terminate or cancel your Subscription in its entirety or may terminate or cancel only a portion of the Subscription (e.g., access to the software via Steam) and Valve may, but is not obligated to, provide access (for a limited period of time) to the download of a stand-alone version of the software and content associated with such one-time purchase.

So no, there's nothing there says that they HAVE to do anything. And that's why, regardless of the wicked sales and the growing temptation, I've still not bought anything off of Steam, and won't do so.

Re:Hmmm

[Gaygirlie]

I used to play lots of pirated games, and I mean LOTS of them, but.. a few years back I got introduced to Steam. I don't remember anymore what exactly drove me to try it, but I did. And suddenly I noticed using less and less pirated games to the point that I haven't had a single pirated game on any of my computers for a few years now. Steam just happens to be so extraordinarily convenient, not to mention two things they provide me with that pirated games don't: always up-to-date installations, and I don't have to bother with backups of my own or trying to keep the original discs safe. And again, the constant sales thing is also great; if I can just stay patient and wait for the game I like to come on this or that seasonal sale I'll be able to safe quite a bit, but I also can just rush out and buy it the moment it's available if I just can't stay patient.

My roomie has a very similar story in fact, we're both old "pirates"; we never produced any pirated copies ourselves nor did we spread them around, but we did use them ourselves a lot. And when we learned of Steam we both started using pirated games less and less until we eventually stopped altogether. In other words, whatever Steam is doing, it seems to be working.

Now, as for the "competing" services, like e.g. the one you're required to sign to when you buy BF3... well, we both view them as an inconvenience, not a convenience. They do not offer anything that Steam already doesn't, plus they're handicapped in several ways, like only offering games from one, single publisher. I understand that they want a piece of the Steam-cake, but the way they're going about it is simply not working all that well.

Re:Hmmm

[grim4593]

Yes it can. Like recently when the DiRT 3 promotional game codes got leaked from that ATI affiliate site; Valve revoked all of the DIRT 3 promotional keys, uninstalled the games, and required legit ATI hardware owners to scan proof of purchases.

Re:Hmmm

[damiangerous]

No, an LLC and an S-Corp are not the same thing.

Too true

[Anonymous Coward]

I was about to buy a copy of GTA IV on Steam during the sale they've got going. With credit card in hand, I found out in some reviews that the PC version requires Games for Windows Live for saving and installs SecuROM. Dealbreaker right there and I never purchased.

Re:Too true

[RsG]

Actually no, I'm gonna chime in here as another person who owns Arkham City and does not have a live account. Your statement is incorrect.

What happens instead is, you get prompted to log into GFWL, and can click "cancel" to just work offline. Save game still works, no features lost. You can't do online scores, but who cares, really? Dunno if it'll require a login for DLC, but I rarely bother with that anyway. And, just to be clear on this point, I'm currently a quarter way through the game, have never made a live account (I dislike Microsoft), have saved plenty of times and am playing a non-pirated, bought off of steam version of the game.

I don't know where you got your information, but it's either out of date, was never correct in the first place, or something got misunderstood along the way.

Re:Too true

[Anonymous Coward]

It's not one word, but rather an abbreviation. "FSCK" stands for "File System ChecK" and is the Unix and Unix-like operating systems' equivalent of the old SCANDISK.EXE for Windows. "Boring as fsck" means "as boring as watching the computer make slow progress through a file system check, methodically testing volume structures and clusters and blocks for errors." The fsck routine often requires unmounting a disk to perform maintenance, and the system may not be very interactive, and thus boring for the user, if the main system disk is unmounted. Less computer-literate people picked up this expression, but in a corrupt form, much as children may with error acquire knowledge from superior elders or barbarians may crudely imitate more civilized nations. Thus we find the underclass saying "boring as fuck" instead of "boring as fsck." The proliferation of this error points to a degeneration in society, an apostasy from the golden era in which Slashdotters ruled the world and a fall into one where the zombie-like hordes of HuffPo and FoxNews openly display their ignorance without the shame their ancestors would have rightly felt. You can help reverse that decline, however, and together we can take back our nation and our world, if you promulgate this truthful narrative of history to the more credulous of the savages.

Re:Too true

[sonicmerlin]

This is why I think Good Old Games is the true hero in all of this. They have a no compromise policy- if you want to sell games on their site, you have to sell it 100% DRM free (Steam is DRM btw), with a lot of additional free content (like PDF manuals, soundtracks, codes, etc.). You can re download your game as many times as you want, copy it to wherever you want, give it to whomever you want. And with the success of the Witcher and its sequel, they're attracting interest and acquiring more publisher agreements. GoG is the real future, not Steam.

Re:I for one...

[zcomuto]

I'd say DRM encourages piracy more than anything. I'd rather a game just work, than having to jump through hoops to make it work. If a game has something like Securom, frankly I'd rather pirate than have to deal with it. DRM never works, it will always be cracked. There's no getting around that fact.

In truth I never like pirating, if a company makes a good game I'm of the opinion that they deserve my money, but sometimes they don't make it easy to take. Dreamfall is a noticeable game I remember, I have the boxed copy which uses a disk check, but thankfully there are loads of DRM-free .exe's the pirates have provided.

Multifaceted

[king neckbeard]

Having a service problem doesn't mean there isn't a pircing problem as well. The three biggest issues IMO are pricing, service, and respect, although I'm sure other issues play a role as well. However, the respect problem isn't the 'pirates don't respect intellectual property' garbage, but rather, the lack of respect for customers from copyright holders. The FBI warnings on DVDs being a good example of disrespect that only affects those that actually BUY the product.

I can attest to this

[cowdung]

I live in Latin America and have the following options for movies/music/games:

1. Get it on DVD from a pirate (approx cost $1) [ILLEGAL]
2. Rent a pirate copy (approx cost $2) [still technically ILLEGAL]
3. Buy it on iTunes (cost $1-$4).. but I can only do this because I've figure out how to get around regional limitations [psuedo-LEGAL]
4. Buying on Netflix/Amazon is not an option [N/A]
5. Going to threater (movies only).. sometimes, when/if it arrives at a timely basis (cost: $4-$5) [LEGAL]
6. Buy the legal DVD (cost: $30-$100) [LEGAL]

As you can see a great option is iTunes/Netflix/Amazon but the industry has systematically cut off those options from us. Also the legal DVDs are sold at much higher prices than in the US.

So do you wonder why there is so much piracy around the world??

There's no viable affordable legal option.

Re:I for one...

[Em Adespoton]

Let me translate that:
Locks on homes prevent people you don't want from coming in
DRM prevents people from accessing the content

Only problem is... the content providers WANT people accessing the content. Locks on homes are like having a firewall, patched software and some sort of AV software on your computer... the house would work just well without the security add-ons, and so would your computer. The add-ons make it more secure.

With DRM, the entire idea is to prevent access.

Now, a real counter argument is that if people are grabbing pirated copies of the content, there is nothing to prove that the content is still secure and hasn't been monkeyed with by the pirates, to, say, add botnet software, a keylogger, or something else nefarious.
Then again, some of the DRM software includes keylogger and/or botnet-like hooks that the Bad Guys can leverage, so it's probably a wash.

If your home security system only worked when you didn't have a cold, and only worked for some members of your household, or otherwise prevented people with the right to access the home from doing so in an accustomed manner, you'd find that security feature hobbled in some manner pretty quickly. Then you get the appearance of security without the benefit... just like with DRM.

Re:It's Just Wrong

[Squiddie]

But Jesus was the first pirate. He "copied" bread and fish for tons of people who wanted it. Doesn't that mean that good Christians should advocate sharing and copying, or as you refer to it, "piracy?"