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Newell: Valve More Profitable Per Employee Than Apple, Google
Newell: Valve More Profitable Per Employee Than Apple, Google
February 14, 2011 | By Leigh Alexander

February 14, 2011 | By Leigh Alexander
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    16 comments
More: Console/PC



Although it's tight-lipped about its financials, leaving analysts and media pundits to make all kinds of wild guesses, there's no doubt that Valve is doing very, very well, thanks largely to Steam, which owns the vast majority of the PC gaming digital download market.

With 250 employees, founder Gabe Newell tells Forbes Magazine that the company is "tremendously profitable" -- more profitable per employee than Google and Apple.

He won't confirm reports that other companies have tried to acquire either Valve as a whole or Steam separately, but admits there's been interest.

Being quick to market with Steam, which gave PC gamers a simple one-stop online community for buying, downloading, authenticating and patching games, is one component of the company's success.

Developing highly-regarded games like Half-Life, Left 4 Dead, Team Fortress 2, Portal and Counter-Strike, and encouraging a thriving mod community are Valve's other keys to success.

Valve also offers a Steamworks tool suite for developers to implement certain features in their PC games, like matchmaking, beta-testing, metrics tracking and other tools for developers.

Although it's released games on Mac and console platforms as well as PC, Valve's managed to attain its profitability by remaining focused primarily on the PC gaming market, which is less than 10 percent of the overall gaming industry.

But it's that very focus that helps drive the company's success, Newell tells Forbes: "If we tried to blaze new trails of our own and ride all the latest trends, we'd likely be bankrupt by now."


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Comments


Andrew Grapsas
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Mad props to Valve. Just a stunning example of innovation, passion, and ability.

Jonathan Murphy
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Make sure they can never take over your company, and every chance you get remind them how business is supposed to be handled. BTW... Can I work for you guys? Congrats Gabe Newell!

Aaron Truehitt
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Valve is the best in the business!

Robert Bevill
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Valve has accomplished a lot with a comparatively small team. It's easily the game company I have the most respect for. Now where's Episode 3?

R G
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Amen.

Alan Rimkeit
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Forget "Episode 3". I want to know where Half-Life 3 is. O.o New engine please.



Oh, and go Valve! You guys are some of my biggest hero's!

Joshua King
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What do we need a new engine for? Focus on content brotherfriend i.e. aka Episode 3!

Bart Stewart
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"... the PC gaming market, which is less than 10 percent of the overall gaming industry."



Hmm. I know this isn't the focus of the story, but given the number of general-purpose PCs I find this statistic pretty remarkable.



A Google search on this subject turned up zero hits for a source for this number. (I'd think it would have sparked *some* comments.) However, maybe I'm just not entering the correct search string.



What is the source for this statistic?

Carl Chavez
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Agreed; all of the public numbers I've seen are strictly for retail revenue and ignore digital, subscription, microtransactions, etc. I'd love to see a valid source of the number in this article.

Matt Mihaly
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You probably have to ignore the fact that most of the gaming taking place on Facebook takes place on PCs for that stat to work out too.

Marcelo Careaga
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I don't know the source of the data in the article, but the ESA Essential Facts report has some figures for video games (consoles) and computer games in 2008 and 2009 (http://www.theesa.com/facts/pdfs/ESA_Essential_Facts_2010.PDF):



Video game sales (in billions of USD)

2008: 11

2009: 9.9



Computer game sales (in billions of USD)

2008: 0.7

2009: 0.54



The source is the data from NPD. I guess there should be newer figures and that the data may not include all sources of revenue, but according to these numbers the 10% noted above does not seem so far from the mark.

zed zeek
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check a few of software companies revenue sheets EA,activision,ubisoft etc

PC revenue looks to be ~10% maybe a bit less (though is gonna vary with the company)

ron carmel
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one of my favorite quotes: "there's nothing better than a good king, and nothing worse than a bad one". valve/steam is a good king for the PC game industry. mad respect for gabe newell.

Steven An
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OK that's great now get Ep3 done.



:P Congrats to Valve.

Jonathan Osment
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I agree, new engine please. =) Something to compete with the UDK, as I think it would be healthy for the industry.



As for Valve employees... sending application now + bribe monies! On a serious note, Valve is also one of those few development studios I respect greatly. I hope to see more in the way of game development though and not so much Steam (which is great).

Prakash Angappan
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Valve rocks as always!!!.... Congrats VALVE!!! :)


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