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Gearbox's Pitchford: Steam Is 'Exploiting A Lot Of Small Guys'
Gearbox's Pitchford: Steam Is 'Exploiting A Lot Of Small Guys'
October 7, 2009 | By Chris Remo

October 7, 2009 | By Chris Remo
More: Console/PC

Randy Pitchford of Gearbox Software, one of the industry's major independent developers, thinks Valve should spin off its Steam digital distribution service into an independent company, to reduce existing "conflict of interest" issues.

Pitchford, who co-founded Gearbox in 1999, told Maximum PC in an interview that while he "personally trust[s] Valve," the Seattle-area company is also a development competitor -- and in that capacity, "as a guy in this industry, I don't trust Valve."

"It would be much better if Steam was its own business," the CEO said. "Thereís so much conflict of interest there that itís horrid. Itís actually really, really dangerous for the rest of the industry to allow Valve to win."

In addition to the dangers of a potential monopoly, Pitchford warned that the company is already taking advantage of developers smaller than Gearbox, although he did not provide specific details. "Valve is taking a larger share than it should for the service its providing. Itís exploiting a lot of small guys," he said, adding, "For us big guys, weíre going to sell the units and it will be fine."

Gearbox has a long history with Valve. Its first completed game was the well-received Half-Life: Opposing Force, an expansion pack for Valve's original Half-Life, and it later developed a second expansion, Half-Life: Blue Shift. Gearbox also contributed to several ports of Half-Life to various non-PC platforms.

The company's Brothers In Arms series is also available in full through Steam. And preorders for its upcoming shooter/RPG blend, Borderlands, are currently being sold by Steam as well as by competitors Direct2Drive and GamersGate, but not Impulse.

"I love Valve games, and I do business with the company," Pitchford said. "But, Iím just saying, Steam isnít the answer."

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Patrick Brown
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And here I was, thinking VALVe was saving the indie-game market.

Logan Foster
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30% seems to be the low-end norm for most services and it ramps up from there all the way to a 'bend you over the table' 75 to 90% rate for a few of the real high end casual portals.

So what exactly is Valve taking? If its at 60% or less then its no worse than a box publisher will gouge you for the opportunity to be distributed (except of course you dont need to worry as much about returns or inventory reductions at stores).

Kim Pallister
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It's a healthy discussion for the development community to have. Randy confuses two issues though: Potential conflict of interest between Valve's Steam business and their 1st party content; and concerns around digital digital distribution converging on a monopoly.

The former of these is potentially an issue, but no more so than it is on any of the consoles (people have raised this spectre about Nintendo before, IIRC). The latter is a concern, but something in his power to help resolve, by choosing to distribute through multiple vendors.

There's some history in the casual games space about the power wielded by portals and/or major distributors. Perhaps there are some lessons there in how developers and publishers have managed to survive and in some cases even thrive?

Robert Farr
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Just wish he'd elaborate on his claims, I mean, sure, every business tends to try and do at least a bit of monopolising because its the job of a business to be all big and successful etc etc etc.

But his comments give me no indication of the degree to which his claims might be accurate or not.

Personally, I'm more concerned about the unspoken implications of having these major consoles trying to 'own' gamers and force them to choose between one system (Or selection of games) and another (Yeah, I'm assuming the gamer is on a budget and can't afford 3, sorry, 4-6 systems).

Jerome Russ
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How do you personally trust a company, but not as a guy in the industry? Souns like he is just angry.

I have played alot of great indie games thanks to Steam. The marketing of the Steam platform itself would justify a 5% increase over the other digital distribution platforms. Direct2Drive, GamersGate, Impulse, Steam. Of those vendors, which do you think the overwhelming majority have heard of?

Wojciech Lekki
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I agree that he is just angry about something. There isn't much substance or facts in his statements.

It is an obvious fact that Valve will favor their own titles on Steam and for other developers it's not the best thing but it happens almost on all other platforms. Look what Microsoft is doing on Xbox, Sony on Playstation and Nintendo on Wii. Its crystal clear that they heavily promote their own games. It is their platform and they can do whatever they want...

Luckily PC has more distribution channels than consoles do so Valve can't become too greedy because developers will simply go to other platforms (promoting them in the same time with their games).

Benjamin Quintero
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You'll never quite understand the breath of someone's gripe through a few quotes, but it makes for good buzz. I can see; at a high level, what his concerns might be, but I think that the PC market is smarter than his fears. I hope so anyways. Valve is one of only a handful of digital distributors who can attract the more hardcore crowd. There are plenty of portals out there, but many of them focus on casual games. I do think that a new name will rise to power if the big companies on Steams' payroll suddenly find greener pastures elsewhere.

There are a number of indie-focused distributors out there, but it's hard to get press time without flexing some star-power, which Valve has.

Tom Newman
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Valve is doing a great job with Steam. Steam gives a lot of indie games exposure that they would not normally get, and even though Valve makes it's own games, it also offers up their competition. I personally use Stardock's digital distro service when I can, but that's only because I live in Michigan and support local businesses, but overall Valve is doing a great job and making a positive impact on the industry.

Caleb Garner
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yea i hear his concern and i think it's cool that someone from gearbox who got their start (if i'm not mistaken) making HL expansions.. clearly someone who's been close to valve in the early days.

In all honesty, spinning steam off as a separate company might look good on paper, i doubt that steam would then just be completely objective with valve titles... there would still be plenty of close relations and politics involved. I doubt gabe would turn over the keys without some say/stake in how steam operates.. no reason not too.

Bottom line is that yes, if steam is doing this well.. and are making an unrealistic profit, another compeditor will come along offering developers a better deal and consumers a better price. The market will produce more competition if there is money to be made.

Valve doesn't hold the key to PC gaming. They simply were wise to invest their extensive success from Half Life to do more than just produce another game.

Robert Casey
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My view is Valve is simply diversifying into publishing, and I don't see the reason why a company can't publish and produce its own games for the pipeline. Small game producers can only benefit from having a publishing channel from a company that strongly supports the mod community and innovative gameplay. Gearbox wouldn't be complaining about this if they had invested the time, money, and cerebral resources to produce their own game portal. Valve is an innovator, waiting for others to catch up, not a monopolizer.

Sven Viking
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"Just wish he'd elaborate on his claims"

"There isn't much substance or facts in his statements."