Valve: Why the PC is the future • Page 2

Newell and co. stick up for their roots (and Steam).

And then there is the game that many claim has been the death of PC gaming, but that Valve sees as its greatest success story, and its future. "Until recently, the fact that World of Warcraft was generating 120 million dollars in gross revenue on a monthly basis was completely off the books," Newell says. "Essentially, [Blizzard is] creating a new Iron Man every month, in terms of the gross revenue they're generating as a studio. Any movie studio would be shouting about that from the rooftops. But it was essentially invisible."

Newell thinks that WOW is "arguably the most valuable entertainment franchise in any media right now", and also believes, rightly, that it could only ever have happened on the PC. He also tips his hat to South Korea's Nexxon for its enormous success with free-to-play, microtransaction-driven games like Kart Rider and Maple Story, soon to be aped by EA's Battlefield Heroes.

There is another reason for the gulf between the perception and the reality of the games market, Valve thinks, and it's a geographical and linguistic one. The dominance of the English language gives the US and UK games markets, where the PC is weakest, undue prominence. In several major Western markets - notably Germany and the Nordic countries - the PC performs much better. What's more, in the emerging markets of China, Korea and Russia, where gaming is seeing unprecedented, explosive growth, console install bases are negligible, and the PC is king. Valve thinks that there's a silent majority of global gamers who are skipping the console era entirely, the way these developing nations already skipped dial-up internet.

Steam is available in 21 languages for this reason, and Valve reckons that its speedy localisation and lack of physical distribution is an effective counter to the piracy common in these markets. It's also allowing Valve to get games to players in regions traditional channels don't support. "PC's are everywhere in the world," says Holtman simply. "PC's are the same all over the world. All of sudden, if you can open up emerging markets and go somewhere like Russia or South East Asia, you've gone way further than you can go with a closed console. There are 17 million PC gaming customers in Russia alone."

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Newell believes WOW: Wrath of the Lich King shipping "will have a larger impact on moving the PC forward as a gaming platform" than initiatives such as the Gaming Alliance.

A key shift in this brave new world of games as services rather than products - and one that runs contrary to the traditional image of PC gaming - is a move away from graphical fidelity being the yardstick of progress. "As a company that's really proud of the job we do with graphics it's funny to say this," Newell says, "but we get a better return right now by focusing on those features and technologies that are about community, about connecting people together."

He cites easy uploading of gameplay videos to YouTube as a bigger source of entertainment value than marginal improvements in graphics. "I think that people thinking about how to generate web hits on their servers are a lot closer to the right mentality for what's going to be successful in entertainment going forward, than somebody that's used to having conversations about how to get end caps at Best Buy."

The revolution in distribution and business models also offers a major new opportunity for smaller games - and smaller games developers - to thrive. The demands of retail - the logistical problems of getting boxes to shops, and the budgetary drain of huge marketing campaigns - mean that bigger is necessarily better in the traditional games market.

Not so on Steam and its equivalents, says Valve, pointing to the huge success of indie darling Audiosurf, as well as its own Portal. "As you move away from that huge first weekend, big blockbuster mentality," says Newell, "you're getting back to an area where smaller and smaller groups can connect with customers. I think you're going to find that the enjoyment of being in the game industry as a developer on the PC is a lot greater than outside of it."

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