In the Works

Last week Valve announced that its online community and digital distribution platform, Steam, had surpassed 15 million users. Not long before that the company announced that it would be releasing a set of development tools called Steamworks, enabling the use of auto-updating, copy-protection and other such devices - for free.

Here Doug Lombardi, Valve's marketing director, explains that decision and talks about the company's commitment to independent game development.

Well, it's something that's been in the works - forgive the pun - for about six or seven months now. It really came about because there were a couple of games that were out on retail, that came out on Steam later on, and the publisher or developer of that game asked us if they could do the auto-update thing, if they could convert their game to be Steam-supported and get updates, and have the game appear within the Steam world even though it wasn't bought that way at first.

Then, when we did that, we got a lot of response from gamers who asked us if we could make all games run under Steam, because they liked having them all in their games menu, having them all auto-updated.

And then Steam Community came out, and we've got hundreds of thousands of groups, and I think millions of pages that people had made - unique accounts - so we got more people from the development community asking us about it.

We have a philosophy - it's not that we always come up with the great ideas, but we're smart enough to listen to people. Folks were pointing us in this direction, and we thought that maybe there was something to it.

So we looked across it all and said okay - we've got the copy protection, the Steam Community stuff, we have voice technology, there are all kind of stats as a result - when a customer activates the game code through Steam, an hour later the publisher or developer can see that, so they get up-to-the-hour sales data, they know what territory, what countryâ¦

So we thought, forget NPD and ELSPA and that sort of stuff - you go to the Steam stats page and you can see that the UK might be selling well, the US selling well, but we've got a problem in Germany - go spend more marketing money there.

It allows you to be more strategic in your decisions because you have real information, rather than waiting two or three weeks for charts that might only be 80 per cent accurate because they don't comb every single retailer - the technology has moved on and we can get stuff on a tighter level.

So we got a lot of interest from consumers and developers, and it just seemed to be worth it - why don't we wrap all this stuff up, put a name on it, and just give it to folks?

What's in it for us? That's the big question that everybody's asking, it seems awfully altruisticâ¦but there is no secret plan. If you're using Steamworks only in your retail product and you don't even distribute on Steam, people want to use the copy-protection stuff, the customer needs to sign up with Steam to unlock it.

And then once they're in the game you can take over and all the skinning of the server browser and all that can be specific to your game, but that customer has made a Steam account - so somewhere down the line we can sell them the id Super Pack, or Portal 5, or whatever it is that comes down the line.

That's what's in it for us - getting more people on Steam who can check it out, and broadening that group of players.

Yeah, and we have - over the holidays we had our after-Christmas sale and we worked with a bunch of people to package up some of the back catalogues - the Eidos pack for example, or the id pack - and they did really, really well.

The publishers couldn't get the games in stores any more because they were old, and wanted to sell them for price points that it would be hard to get a margin out of after shipping, and costs, and so on.

But on Steam you don't have to make a disc, there's no inventory risk, you can sell it for USD 1.75, or USD 9.63, or whatever you want - and gamers are reacting to that.

There really is this sort of idea of giving your products a longer tail through things like Steam that has this virtual shelf space, and we can hold as many games as we want.

Well, the first game that we did in that area that wasn't ours was Rag Doll Kung Fu, and then Darwinia was sort of the big one that broke out and won all of the awards at GDC, and those guys picked up a worldwide distribution deal because of the success off of Steam.

Thomas and those guys are great guys, so we couldn't be happier to have such good guys find success in what they want to do - and God bless them, they've stayed small and are going to remain an independent and I'm happy to say that in some small way we were a part of enabling that, and keeping them from having to become an 80-person team and go do Darwinia over budgetâ¦

I don't know if we've signed it yetâ¦I'll tell you this much - it's a favourite in my opinion to win at GDC in the Independent Games Festival.

That's something that for us is a couple of things. Personally it's rewarding to help the independent guys - it's way more fun to see Thomas and the guys from Introversion hit, than to say we're going to help Activision sell more Call of Duty games.

Don't get me wrong - I love the sales that we got off Call of Duty, but there's nothing altruistic about it - it's pure business, baby, and God bless the guys from Infinity Ward, they made a fantastic game.

But being able to help those guys from the UK bust out on to a worldwide stage, win all these awards - from a personal sense that's much more rewarding.

The other thing too is that like the back catalogues, we feel we've got this great advantage of bringing these great indie games that - to use a 1997 word - give Steam an extra stickiness.

People know they can come to Steam and find cool stuff for twenty bucks or so in the independent category - they won't find it at retail because the publishers can't sell it for USD 50, and the door gets locked.

And if it's an innovative game that's pushing stuff it's not going to show up on Yahoo Games as the next Super Smash, or Super Collapse, or Tetris or whatever. Something like Darwinia just wouldn't fit there, it would probably fail, but if you bring it to the guys that are on Steam they'll think it's awesome.

We treat that as front and centre in terms of the portfolio, if you will, for Steam.

It does and it doesn't. If you look at it from the number of emails from people that are interested, then it could be. But then we send over an NDA and a publishing agreement and tell them to call us when they have a final candidate - and the number of people that call and say they're finished and ready to publishâ¦that's its own filter.

Finishing a game is hard. Shipping a game is hard. The number of people who say they have some concept art and a game design document versus the number of people who finish and ship? They're completely different numbers, by a couple of orders of magnitude.