Valve: we're more profitable per employee than Google, Apple

By Matthew ยท 21 replies
Feb 16, 2011
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  1. Speaking with Forbes, Valve co-founder Gabe Newell revealed that Steam represents between 50 and 70% of digital PC game sales. IHS Screen Digest analyst Ed Barton suggests that the wildly popular platform saw revenues in the high hundreds of millions of dollars last year -- an estimate recently mirrored by FADE.

    Read the whole story
  2. Awesome, I love it when the people with talent cut out the middle man. More profit to the developers = more money pumped into more PC games. Go steam!
  3. w3b0n

    w3b0n TS Rookie Posts: 38

    Quality over quantity.

    Activision needs to learn how to play in the game decently. Their fraudulent ways of taking advantage from the AAA Franchises will get them one day, but they can only see the greedy side of this awesome industry. I cant imagine the sales if MW2 and COD BO were perfectly coded to be fair and really tried to be hacker free, those billions of dollars could be easily duplicated, but again they just greed in with our money with naughty coded stuff.

    GG Valve.
  4. princeton

    princeton TS Addict Posts: 1,676

    And hopefully portal will change the fact that their games have had the worst quality in the graphical and physics department since 2006.

    Though gameplay>graphics so I'll always buy their games.
  5. If they are making such a ridiculously large profit maybe they could lower the game prices a little more??
    I heard that retailers hate steam because it cuts them out.
  6. Do bare in mind Princeton that Valve develop their games based on their hardware surveys and currently most of the population of Steam at the moment have low-end PCs.

    So they have made a correct choice in staying low to accommodate all users. They save money and can spend more time on the coding and gameplay aspect.

    I think Valve are the greatest and deserve every last praise. Screw all these *****ic companies like Activision, just trying to make that extra buck.
  7. TomSEA

    TomSEA TechSpot Chancellor Posts: 2,715   +856

    "If they are making such a ridiculously large profit maybe they could lower the game prices a little more??"

    Are you serious, guy? What - you living off of pennies or something? Their Christmas sales were outlandish. I bet you could have ended up with the entire Valve catalog for $400 or less. Games that would have normally totaled $3000 - $4000 if you had tried to buy them individually from a retailer.

    Don't look a gift horse in the mouth. IMNHO, Valve has the best software distribution model of any e-tailer out there. I don't begrudge them a bit for making a few bucks for both themselves and the developers while we get the benefit of excellent discount pricing.
  8. Raswan

    Raswan TS Enthusiast Posts: 279

    Well said. You rock my world Valve. :)
  9. Zecias

    Zecias TS Booster Posts: 202

    if you really want to save money you can wait for a year or so and get games worth $50-$60 for $1-$5. u can get great games like bioshock for $2 and u want the prices to be cheaper?
  10. Timonius

    Timonius TS Evangelist Posts: 647   +58

    The article mentions:
    "Steam's success is partially attributed to its appeal to publishers who earn a gross margin of around 70% on Steam compared to 30% via retail stores."

    Of course retailers are going to get 'steamed' over loss of in store sales. If I were an independant developer/publisher I'd go to Steam first as I would get better profit and most likely better return on my investment given the large amount of potential buyers and also I would be able to cut out manufacturing costs (cutting out one of the middle men). As far as pricing goes, games usually go on discount during a sale/promotion as they mature. I find that 90% of the games out there are not worth purchasing right away due to various factors.
  11. @ Guest who said: "Awesome, I love it when the people with talent cut out the middle man. More profit to the developers = more money pumped into more PC games. Go steam! "

    The middle man is still not "cut out" and the money doesn't go to the developers. No, instead the true middle man, the publisher, decides the price and receives all the dough. It is up to them and their internal contracts in deciding how much of it goes to the developer studios.
  12. Mushroom

    Mushroom TS Rookie Posts: 32

    it's hard not to love valve, their sales are orgasmic and they really seem to "get" the PC community....also, hat fortress 2 must be a gold mine.
  13. princeton

    princeton TS Addict Posts: 1,676

    Scale UP. I don't understand why valve doesn't get this. Nothing is stopping you from including both low res and high res textures and models. This article clearly shows that financial resources is no problem.
  14. ok valve this is all very nice but..

  15. Stupido

    Stupido TS Booster Posts: 66

    +1 to that!
  16. Never? That's what it looks like at least. Why finish a trilogy when you clearly don't have to (Financially speaking of course) or they ran out of ideas for dear old Mr. Freeman.
  17. ajd007

    ajd007 TS Rookie

    I think you mean "Dr. Freeman". He does have a PHD
  18. emmzo

    emmzo TS Booster Posts: 142   +37

    As a gamer I totally agree with you, but if you look at the facts from their perspective, finishing Half Life means closure for their most celebrated title, so unless they can pull off more new great ids to live off from that`s not going to happen. Sure you can say: "what about Left4Dead or Portal?" and yes, they`re ok, but there`s no comparison here. Also, the fact that the 3rd episode would heavily rely on the same obsolete source engine makes it even more difficult to compete with today`s shooters. Or just, maybe their priorities switched entirely to distribution, who knows... I fear this will turn out into a Duke Nukem Forever thing, minus the drama.
  19. Valve, ftw. My favorite game developer/publisher/company by far. I mean, a company that actually cares about the customer? Who would have thought...
  20. jobeard

    jobeard TS Ambassador Posts: 11,138   +985

    Woopie!!! While profits drive stock prices and option values higher,
    profitable per employee(PFE) does not say anything about value delivered to the customer.
    PFE only says whatever you do is cheaper than then next guy. Really nice for your stock holders,
    but that too says nothing about long term growth or value added.

    Pure Business 101 guys . . .
  21. SNGX1275

    SNGX1275 TS Forces Special Posts: 10,742   +421

    Everyone was hating Apple when they had high profits. Why is this different?
  22. gingerbill

    gingerbill TS Addict Posts: 233   +59

    Valve are a great company , love there games and find steam very good . I honestly think the retail shops (at least in the UK) only have themselves to blame . They had no clue about games and made no effort . My brother who works for a toys'r'us was surprised when cataclysm wasnt for sale in his shop , he enquired with head office about it and they said " whats world of warcraft?!" . Someone responsible for ordering games for a massive international retailer hadnt ordered and had never heard of world of warcraft . No wonder retail sales have plummeted compared to digital.

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