Why Portal's Publishers Don't Fear Piracy, Competition

Computer games have long lived online, but nowadays video game consoles are joining them, becoming a form of entertainment that can be not just enjoyed online, but increasingly, purchased online.

While computer publisher Valve is mostly about computer gaming, their Steam service has started to make in roads to console gaming as well. A bulk of what they currently do is provide an online service and store for computer gaming, but Gabe Newell, the head of the company knows that's changing.

He's also keeping a close eye on how other publishers are starting to create their own, competitive services. I sat down with Newell in Germany earlier this month to chat with him about the problems online gaming faces, including the fight to stop piracy, challenges to Steam and the future of gaming.

The first thing I wanted to know, though, was what he thought of publishers who require a gamer to remain online at all times to play their games. Or the slew of publishers who are starting to require people who buy their games used to purchase a second code to unlock the game's online elements.

"We're a broken record on this," Newell told me,. "This belief that you increase your monetization by making your game worth less through aggressive digital rights management is totally backwards . It's a service issue, not a technology issue. Piracy is just not an issue for us."

And it's not because Steam avoids regions of the world known for their software piracy, they actually embrace them.

"When we entered Russia everyone said, ‘You can't make money in there. Everyone pirates,'" Newell said.

But when Valve looked into what was going on there they saw that the pirates were doing a better job of localizing games than the publishers were.

"When people decide where to buy their games they look and they say, ‘Jesus, the pirates provide a better service for us,'" he said.

So Valve invested in getting the games they sold there localized in Russian. Now Russia is their largest European market outside of the UK and Germany.

"The best way to fight piracy is to create a service that people need," he said. "I think (publishers with strict DRM) will sell less of their products and create more problems.

"Customers want to know everything is going to be there for them no matter what: Their saved games and configurations will be there. They don't want any uncertainty."

And it's uncertainty among gamers that some of this more egregious digital rights management is creating.

Newell says he's not really bothered by the idea of other publishers, even mammoth ones like Electronic Arts, starting to compete with them head-on by creating their own store.

"They look at Steam as it is today and say, ‘Aha, we can do something like that too.'," he said. "What they are missing is that this is just the beginning. The rate at which stuff is changing is dramatic. Things we've done in Steam are going to seem very primitive simply a few years down the road."

Steam, he said, can't stand still for even half a year and in a way, that terrified Newell.

"We're terrified by the future," he said. "You need to be looking at what's happening with Apple, Google Android and thinking that could impact the living room in a big way. You need to be looking at Onlive and how it is integrated with the television.

"Where we are today is trivial to where we will be down the line. We need to be focusing on where we are headed."

Newell says he is excited not just for Valve and Steam but for game makers and game players.

"All of this is going to be awesome for game developers," he said. "It's going to be awesome for gamers. If it's Steam that pulls this all together, great, if we don't we'll be the answer to a trivia question."

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You can contact Brian Crecente, the author of this post, at brian@kotaku.com. You can also find him on Twitter, Facebook, and lurking around our #tips page.