Gamasutra: The Art & Business of Making Gamesspacer
View All     RSS
August 27, 2014
arrowPress Releases
August 27, 2014
PR Newswire
View All





If you enjoy reading this site, you might also want to check out these UBM Tech sites:


Valve: PC Has 'Perception Problem,' Piracy Reflects 'Unserved Customers'
Valve: PC Has 'Perception Problem,' Piracy Reflects 'Unserved Customers' Exclusive
May 30, 2008 | By Chris Remo

May 30, 2008 | By Chris Remo
Comments
    10 comments
More: Console/PC, Exclusive



"There have been a bunch of stories written recently, both in the gaming press and the mainstream business press, that PC gaming is dead," said Gabe Newell during a small press event attended by Gamasutra and held yesterday at Valve's offices in Bellevue, Washington.

"This meeting that we're having here really should be done by Intel or Microsoft, companies that are a lot more central to the PC ecosystem, rather than just hearing about our perspective on these issues."

This kicked off a two-hour presentation, in which a number of Valve employees made the case for the PC as a robust, innovative platform.

A Perception Problem

"Is there a crisis in [PC] gaming?" asked Newell, who led the first segment of the talk. "You know, 'Piracy killed my game,' 'Console numbers are huge,' 'People don't want to play their PCs in the living room' - all these stories get written over and over again, and our view is that it's exactly the opposite. PC is where all the action is, and there's a perception problem."

According to Gartner Group data, there are over 260 million online PC gamers, with 255 million new PCs being sold in 2007. Steam alone has 15 million connected gamers, with 1.25 million peak connected gamers, and 191% year-over-year growth; Valve was quick to point out that Steam represents just one of many online distribution systems.

"This is a market that dwarfs the size of any of the proprietary closed platforms," Newell said. He noted that the vast difference in scale between PC and console platforms means that PC continues to be the platform with the most capital investment, allowing it to drive the innovation and technology development that eventually trickles down to consoles.

Newell then cited DFC Intelligence data showing that, while worldwide retail PC game sales have been relatively flat since about 2001, PC online sales have continually grown - that segment has traditionally not been tracked by widely-cited firms like NPD. With Valve's own products, it expects online sales to surpass retail sales within the next three months.

Beyond digital distribution, he brought up areas such as online subscriptions (only as of recently tracked by NPD, which claimed $1 billion in annual subscription revenue), casual games, and free-to-play online games such as those popular in many Asian markets.

Newell then returned to his "perception problem" angle. "We don't really have a champion of the PC platform. If you write a story about the Xbox 360, there's just an army of people who are going to descend on you to make that picture look as polished and rosy as possible. Same things for the other consoles - but there's no equivalent on the PC, and the people who are traditionally driving these messages, like Microsoft or Intel or Apple are, for various reasons, not very effective champions."

Still, Valve does not want to create the impression that it will solely take on that role for PC. "The PC does have that distributed management problem," he said, when asked about Valve's role in the platform's stewardship. "It's been doing pretty well since, you know, 1981, so we're trying to draw attention to that, and hopefully we'll hear more from the people who have traditionally provided leadership there. We're trying to do our part. We recognize we're part of this."

Continued Newell, "We tackle a set of problems that is a higher priority to us, PopCap has a lot more focus on a certain kind of customer and is aggressively trying to figure out how to grow those customers as fast as possible. One of the nice things is, we have a lot of people trying to tackle a lot of problems. We're just tackling our subset of those."

After a lengthy pause, he added, "I'm trying to avoid slamming particular people."

The Worldwide Market

"What you end up getting is coverage of the gaming industry that is very much driven by English-language packaged goods sales," Newell said, "and when you look at those numbers, you're only seeing like 10% year-over-year growth."

He stressed the importance of recognizing the size of the global market, particularly since digital distribution removes traditional barriers associated with retail games, such as shipping-related concerns.

Certain established markets like Germany and the Nordic countries, as well as emerging markets such as China and Russia, are, as Newell puts it, "leapfrogging the console generation" and being largely driven by the PC. Certain markets that can be difficult to reach via retail means can be highly accessible through digital distribution.

Valve business development director Jason Holtman spoke in greater depth on emerging markets. As he pointed out, retail and distribution methods in various markets can be radically different, presenting challenges in shipping products globally - but "PCs are the same all over the world. All of a sudden, if you can open up emerging markets and go somewhere like Russia and southeast Asia, you've gone way further than you can go with a closed console."

Holtman then expanded on Valve's success in Russia, a market that has traditionally frightened publishers away because of its widespread piracy. "Rampant piracy is just unserved customers," he argued. "Using Steam and Steamworks, we were able to address that."

He explained that with encryption technology and Steam's online verifiation, Valve was able to ship discs to replicators in Russia without the game being pirated, and ended up shipping in Russia alongside the rest of the world.

The opening up of worldwide markets, as well as the long tail sales approach that is offered by digital distribution, makes for a strategy that is less dependent on the traditional immediate hit-driven marketing approach, Valve argued.

Said Newell, "As you move away from needing to hit that huge first-weekend blockbuster mentality, the physical constraints of moving bodes through warehouses, and hitting critical mass to justify these huge marketing budgets, you're getting back to an era when smaller and smaller groups can connect with their customers, and I think you're going to actually find that the enjoyment of being in the game industry as a PC developer is much greater than operating outside of the PC space."

Photo credit: Frieder Erdmann


Related Jobs

CCP
CCP — Newcastle, England, United Kingdom
[08.27.14]

Senior VFX artist
Piranha Games Inc
Piranha Games Inc — Vancouver, British Columbia, Canada
[08.27.14]

Lead Artist
Piranha Games Inc
Piranha Games Inc — Vancouver, British Columbia, Canada
[08.27.14]

Online Software Engineer
Piranha Games Inc
Piranha Games Inc — Vancouver, British Columbia, Canada
[08.27.14]

Systems Engineer










Comments


Anonymous
profile image
I was a bit disappointed he didn't touch more on PC hardware, and how developers are killing their own product in this area.



Recently I mentioned how a title looked poor on it's min requirements compared to other games, and I was hit by the response "If they want better graphics they'll get a better PC". I believe it's industry attitudes like this that drive consumers to consoles, and why games like Crysis, and UTIII sell so poorly on PC.

Anonymous
profile image
Yes, but if you're making an MMO and it needs to be possible to have a viable life many years into the future, you can't just develop it for today's most common PC configs or it will quickly look dated.

Anonymous
profile image
9:14 anon: Now, see this is somewhat of a silly argument if you ask me. Let's take a look at a very good example, still going strong. Ragnarok. It has VERY low graphical requirements compaired to say FF11 and is still got a very strong consumer basis because it's a good game, and there's also no reason with the huuuuuge install spaces made for mmos any more that somewhere in that they couldn't include much lower detail settings for people who want to play and can't afford better computers.



You have to remember we're here to serve a customer not to make them work for us. 9 times out of 10 if a person can't make software run on their computer they just won't buy it period or if they do they'll return it the next day and then that company's left a bad taste in that player's mouth. Thinking like you are is really somewhat shortsighted.

Chris Remo
profile image
9:14 Anonymous:



I would disagree. I think it is just the opposite. With something like an MMO, which is targeting a broader, more diverse audience than something like a hardcore FPS, you want your system requirements to be as accommodating as possible. It's an obvious example, but look at World of Warcraft. It is undoubtedly a huge benefit to that game's audience that it runs so well (and still looks so good) on aging hardware. Blizzard has always used that philosophy, and while it obviously isn't the key to the company's success, I don't think it's any coincidence.

Anonymous
profile image
Thanks chris, basicly what I was saying before in 12:53 :) but with a granted better example. I'd have to say the forumla for most games is somewhat like this. Good gameplay and fun can save poor graphics, but beautiful graphics cannot save poor game play. I forget it's name but the ps3 title that had the magical slant japan in it fighting demons is a good example of poor gameplay not being saveable by graphics.

Douglas Gregory
profile image
Also to 9:14

Look at EVE Online. They recently overhauled their graphical presentation to look more up-to-date with modern hardware capabilities, well after the game had launched. With an MMO you can do things like that, since everyone is connecting to your servers to play: you can keep their client software updated with new advances as they become practical for the common user. With MMOGs, it's necessary to look at them as an evolving product, rather than a box that ships once and remains static thereafter.

Jamie Roberts
profile image
I kind of wish the PC market would learn to pace its hardware upgrade cycle. The drive for bigger & better leaves so many potential PC gamers in the dust, either from lack of desire to keep up or from lack of money. At the same time, AAA developers are obsessed with using bleeding-edge hardware and so are less concerned with supporting other (older) configurations.



While I'd never want PCs to enter into a "managed hardware" territory like consoles, I think manufacturers and developers could learn a lesson from the typical console cycle: 1st party games decently using the hardware, with later games upping the ante as programmers learn new tricks. Slowing down your hardware upgrade cycle doesn't immediately equate to slowing your development "upgrades". It just shifts the focus of your content pipeline.

Anonymous
profile image
I don't see why you need to change the hardware cycle at all. The problem is that developers are too concerned with utilizing the latest hardware to make "cool" graphics, rather than just creating a fun game that has the potential for profitability. Only in the PC game development world do the desires of the extremely few hardcore customers drive an entire industry.



So what if the latest video card has ten times the power of the last generation. 95% of your market doesn't have that hardware. If it isn't obvious by now, the sales threat presented by games like Crysis and UT3 is nothing but an illusion. Case in point, Sins of a Solar Empire has sold tremendously well and is a commercially successful game, despite being up against many games in more popular genres with much better production values. How is that possible if being the biggest baddest game on the block is so important to profitability?



Oh yeah, and it might help if publishers would stop throwing every game out to market at the same time. I mean, people do have money at other times during the year besides fall.

Jacek Wesolowski
profile image
Thankfully, we are already past the HDRI period. My eyes used to hurt from looking at all those blindingly shiny games, whose authors were clearly of the opinion that "the more HDRI the better".



Laugh if you need to, but I consider Morrowind much more intereting visually than Oblivion. I prefer System Shock 2 over Bioshock. The wallpaper on my PC at home is a screenshot from Beyond Good & Evil, which is five years old now. The game I play when I'm in a mood to watch nice moving pictures is Freelancer, released in 2003. The game I've kept installed for almost ten years now, just because I really like its tone and atmosphere, is called "Thief 2: The Metal Age". It's a good lesson in humility to take a look at some of its custom missions made by fans. Some of them look awesome, in spite of the engine not being upgraded since the original release in 2000.



One big problem about graphics in games is that we're used to associating "dated" with "ugly". This perception could be valid ten years ago, when new hardware meant giving your characters ears, or making it possible for players to read signs by just looking at them instead of pressing the use button.



Now it's just a testament to our inertia. We're used to thinking in terms of technology. Instead of asking ourselves questions of aesthetics, we insist on using FancyTech $BIGNUM.0. We still believe that FancyTech is what makes games pretty, and that the bigger the version number, the better. Which is absurd, of course. Techs don't make things pretty. Aesthetics do.



This has a lot to do with what kind of games we make. We keep focusing on the same audience as ten or twenty years ago: male kids and male adults who refuse to let go of their inner kid. Let's face it - they are immature. Or at least they are being immature when they turn their computer on. They don't care about pretty graphics. They think pretty graphics are "gay". Their whole idea of aesthetics is "throw in a few pulp comics, a few naked breasts, some zombies, and a shotgun, then set everything on fire".



Actually, our core audience prefers ugly environments: all metal has to be rusty, all enemies must have horns and warts in the strangest places, everything needs to go kaboom, and all characters should preferably use dirty language at all times.



And if the cover says the game uses FancyTech $BIGNUM.0, then all the better, because it means their precious appendages are $BIGNUM longer than those of their colleagues, who have not played that game yet.



And we keep buying into this. This approach is no longer valid. When I graduated from highschool in 1999, the number of male and female gamers in my class was roughly the same. The difference was that most guys preferred Quake and Starcraft, while girls usually chose Baldur's Gate or Alpha Centauri. How many of those girls are still playing now? As far as I know - none. But that's not all. Most of those guys aren't playing either, because they have grown up, and their games have not. "Computer games aren't what they used to be", they say. And yet, we insist on making more and more of Quake, whereas there doesn't seem to be much competition on the Civilization clone market.



Before someone says Quake is mainstream and Civilization is niche, ask yourself this. How many people are there? Just the rich part of the world - the EU, Northern America and Japan - is one billion people. All those people watch a film sometimes. Most of them read a book from time to time. How many of them have a current generation console at home? 50 million? Even under the false assumption that there are no X360s in India, that's still only five percent!



And that's the real niche. We've just become specialized in comfortably selling to a small but easily amused part of a much larger audience. The trick of reaching all the rest isn't just lowering hardware requirements. It requires a change of philosophy. The tragedy is, we're able to milk the male kids segment so efficiently, because we have infiltrated it for some thirty years. On every other field we have a lot of catching up to do. My former classmates have already learned games are silly toys for kids. It's going to take some considerable effort to convince them otherwise.



The first company to find a way to consistently appeal to the other six billion people is going to hit the jackpot. Just like Blizzard already has. It's probably going to happen on the PC, because that's the mainstream hardware platform. Not every home has it, but every office does.



One thing I know for sure is that their game is going to look dated. And pretty.

David Wessman
profile image
Awesome post, Jacek! I totally agree with you re aesthetic direction and core gameplay being the foundation for any game to achieve a success that transcends "flavor of the month."



However, I'd like to offer some contrary observations that are more supportive of the way things are currently. First, it really seems pretty whiny when people complain about games like Crysis requiring bleeding edge hardware to really enjoy. Whah...I can't afford state-of-the-art hardware! It's not fair!



Well, sorry, but we can't all afford the high end of anything. I wish I could drive a Ferrari, but all I can afford is a 2nd-hand Hyundai. Should Ferrari stop making cars I can't afford? Or should they be forced to downgrade the cars they do make, so that I can afford one? No, they serve a niche market, and they do it well. And donít forget that a lot of the technology that first appears on the racetrack eventually works its way into your driveway.



Crytek serves a niche market. If you can't afford the cost of entry, play something else.



And here's something else to consider: unless your tastes are extremely narrow, I doubt very much anyone has the time to play through ALL of the games worth playing that come out every year. If you're like me, you have a whole pile of games from years past that you simply never got around to playing when they were new. Or, maybe you passed up a great game when it was released because you didn't have the system specs for it. A few years go by, and you finally upgrade to a performance level that would have been considered bleeding edge 3 years ago, but is now Wal-Mart consumer level. You should be happy because now you can pick up that snazzy hardware whore of a game for $20 instead of $50! (Assuming there was some great gameplay under all that glitz, of course.)



Even though I canít afford to keep up, I wish they would push the technology faster and farther, and hereís why: we donít have realistically simulated environments for our games. We donít have photorealistic graphics, but we also donít have stylized graphics of a richness and complexity that comes anywhere near to the real world. We donít see realistic physics simulations that model complex internal structures composed of many different material types. Our games donít have realistic fire, smoke, water, mud, snow, etc. Weíve got a long way to go.



Mind you, I donít think any of this is essential for great gameplay, but I believe there is great gameplay to come that will depend on these things. Eventually, I will be able to afford it.



Flash will always precede substance in a primarily visual, hit-driven medium that serves a fickle audience. Get over it.


none
 
Comment: