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Gabe Newell: Piracy is a “Non-issue” to Valve; Providing better Services Will Result in More Sales
In a recent interview with TCS, Gabe Newell explained why Valve is so successful. Recently we posted how Ubisoft were abandoning the PC market due to piracy, and imposing heavy DRM on their customers, but according to Newell that’s not really the right way to go about it.
He said that there is a general misconception about piracy, and it’s not really the high cost that forces people to pirate. It’s about the delivery service and how convenient it is to people with purchasing power:
“In general, we think there is a fundamental misconception about piracy. Piracy is almost always a service problem and not a pricing problem,” he said.
“For example, if a pirate offers a product anywhere in the world, 24 x 7, purchasable from the convenience of your personal computer, and the legal provider says the product is region-locked, will come to your country 3 months after the US release, and can only be purchased at a brick and mortar store, then the pirate’s service is more valuable.”
Ubisoft said that, “95% of people will pirate our game.” It’s a ridiculous thing to say without releasing any sort of data and they have also cancelled Ghost Recon: Future Soldier for the PC.
Newell explained a lot more as to how they were providing better services and creating a sense of brand loyalty. He mentioned that piracy is basically a “Non-issue” for Valve.
“Our goal is to create greater service value than pirates, and this has been successful enough for us that piracy is basically a non-issue for our company.”
“Prior to entering the Russian market, we were told that Russia was a waste of time because everyone would pirate our products. Russia is now about to become our largest market in Europe,” he revealed.
If only Ubisoft and others could learn a thing or two from this man, the gaming industry would be in a much better position.
Source: Gamingbolt
Steam database compromised, what now?
Check this e-mail from Gabe:
Edit: It turns out it’s probably fake but we’ll see:
Steam got hacked pretty bad
Here’s the official statement in plain text:
Dear Steam Users and Steam Forum Users:
Our Steam forums were defaced on the evening of Sunday, November 6. We began investigating and found that the intrusion goes beyond the Steam forums.
We learned that intruders obtained access to a Steam database in addition to the forums. This database contained information including user names, hashed and salted passwords, game purchases, email addresses, billing addresses and encrypted credit card information. We do not have evidence that encrypted credit card numbers or personally identifying information were taken by the intruders, or that the protection on credit card numbers or passwords was cracked. We are still investigating.
We don’t have evidence of credit card misuse at this time. Nonetheless you should watch your credit card activity and statements closely.
While we only know of a few forum accounts that have been compromised, all forum users will be required to change their passwords the next time they login. If you have used your Steam forum password on other accounts you should change those passwords as well.
We do not know of any compromised Steam accounts, so we are not planning to force a change of Steam account passwords (which are separate from forum passwords). However, it wouldn’t be a bad idea to change that as well, especially if it is the same as your Steam forum account password.
We will reopen the forums as soon as we can.
I am truly sorry this happened, and I apologize for the inconvenience.
Gabe.
Also I just cancelled my credit card associated with my Steam account and changed my password, Sony gave away free games after their hackings. Is Valve going to do this?
Valve’s official statement (just popped up on Steam):
Official Steam forums hacked?
The Steam forums are currently offline.
"The Steam Forums are temporarily offline for maintenance. Your patience is appreciated."
Valve is yet to comment on the situation, but some users have reported what looks like a breach that occurred last night.
Images, below, show the forum redesigned slightly to contain a message from FknOwned.com, a website that offers video game hacks.
And emails from Steampowered.com were sent to some users containing the following:
"Ever wanted to dominate the servers you play on with guaranteed results, but you were too afraid to cheat because of ban risks? Visit [removed domain] It’s safe, secure and undetected.
"Along with hacks, we’ve also got some general discussion sections, hacking tutorials and tools, porn, free giveaways and much more. This site has been conditioned to meet all your needs in terms of resources so be sure to take a look and tell us what you think.
"Thanks again, the fkn0wned team."
At this stage there is no evidence to suggest that users’ details have been compromised, or that Steam accounts have been breached.
The problem may only relate to the vBulletin forum software Valve uses for Steampowered. However, there may be an issue if gamers use the same username and password combination for the Steam forum as they do for Steam itself.
Gabe Newell on pricing and free to play
Gabe Newell discussed the difference between silently discounting a game and making a big sale. When they quietly lowered prices, they found it to be elastic (sales increase proportionally, so the overall revenue remains the same), but…
“The sale is a highly promoted event that has ancillary media like comic books and movies associated with it. We do a 75 percent price reduction, our Counter-Strike experience tells us that our gross revenue would remain constant. Instead what we saw was our gross revenue increased by a factor of 40. Not 40 percent, but a factor of 40. Which is completely not predicted by our previous experience with silent price variation.“
This experiment was successfully repeated with a third party game, and the result is the non-stop flow of heavy discounts you’ll now see on Steam. It’s no coincidence that the already massively discounted GTA games, being priced at 75% for all of them ever is the number one best selling title on Steam.
Difference between saying something is “free” or “free to play”
Now a little more about discovery of the difference between saying something is “free” and saying it’s “free to play”. Newell’s explanation is not entirely clear, but it seems that the latter implies some greater level of content and long-term support for players. He says:
“The most recent thing that also is really puzzling is that we made products available for free on numerous occasions, without significantly impacting the audience size. We recently said, we’re now going to do something different, we’re not only going to signal that it’s free but we’re going to say, ‘it’s free to play,’ which is not really a pricing signal, even though that’s what you would ordinarily think it is. And our user base for our first product that we made free to play, Team Fortress 2, increased by a factor of five. That doesn’t make sense if you’re trying to think of it purely as a pricing phenomenon.
Why is free and free to play so different? Well then you have to start thinking about how value creation actually occurs, and what it is that people are valuing, and what the statement that something is free to play implies about the future value of the experience that they’re going to have.”
And being free to play, rather than simply free, seems to bring with it profit. Newell reports that since TF2 has become free to play, they’re seeing a conversion rate of players of 20 to 30 percent, going from getting the product free, to spending money on hats, etc. Why? No one yet knows. Gabe continues:
“We don’t understand what’s going on. All we know is we’re going to keep running these experiments to try and understand better what it is that our customers are telling us. And there are clearly things that we don’t understand because a simple analysis of these statistics implies very contradictory yet reproducible results. So clearly there are things that we don’t understand, and we’re trying to develop theories for them.”
Make sure to read the rest of Geek Wire’s transcription, which also includes thoughts on piracy, and Valve’s impressive success in Russia.
Source: Rock Paper Shotgun
Valve employee explains regional pricing
Australian gamers community AusGamers had chat with Valve internal marketing and PR head, Doug Lombardi. It was a long chat but let’s look what about interesting part about regional pricing.
AusGamers: One of the big things then, that has come as a result of the selling side is regional pricing, which we happen to take a bit of a punch in the face in Australia over. Obviously, it’s a digital distribution platform, so you’re not really buying physical copies of anything. How do you guys work that pricing system out, because some games are 40 dollars here in the US but even with our dollar as strong as yours it’s still 80, 90 dollars in Australia.
Doug: It’s something that’s just really hard to navigate. The value of currencies, especially in today’s market are going up and down. When we launched Steam, the Canadian dollar was about 60 cents to the American dollar; today it’s flat even. And there’s just tonnes of currencies around the world and we’re constantly trying to match that and work with the third-party publishers and how they want to price their games in what territories and when they want to release. So it’s constantly something that there’s a big army of people downstairs on the Steam team that are trying to manage, to give the best possible results to gamers and publishers for their games.
There’s a balancing act there. Some places we get it more accurately on than we do in other places, but we’re trying to listen to people and adjust things to make sure that it’s a level playing field and that folks are getting a higher service value at the right price for their games.
And folks vote with their dollars. If we’re getting it really, really wrong, that territory or that country will turn off and we have to stop and scratch our heads and say “well where did they all go and what happened? Was it a pricing issue and we need to resolve it?” But it’s something that we’re aware of and we’re constantly trying to manage, but I think it’s going to be one of those things where it’s always going to be an ongoing effort, because markets and currencies are always changing. We’re never just going to get it right, freeze it, and it’s always going to be okay.
Source: http://www.ausgamers.com/featu…..ad/3037280 (just below the picture of Gordon Freeman)
Portal 2 to have PC & PS3 Co-op
Portal 2 PS3, Steam cross-platform play
The PlayStation 3 version of Valve’s upcoming first-person puzzler Portal 2 features cross-platform play and chat with the Steam PC and Mac versions.
At E3 2010 Gabe Newell came on stage at Sonys press conference to announce that Portal 2 will be coming to PS3. But more importantly than that, it will also be the first console title to come with Valves “Steamworks” package. Valve announced that this would include Steamcloud support and automatic updates, but it seems it’s also enabled something a little more exciting.
Additionally, the PS3 version unlocks the Steam Play version free of charge when gamers link their PlayStation Network and Steam accounts.
Continue reading
Molyneux’s son asks for Half-Life 3
Peter Molyneux’s (the maker of Dungeon Keeper, Black & White and a lot more games) son asks for Half-Life 3:
Steam Wallet Beta Now Available
The Steam Wallet, Steamworks’ newest feature, is now available for public testing. With Steam Wallet, you can add value to your Steam account using any of the payment methods supported by Steam. Funds in your Steam Wallet may then be used to buy any item available on the Steam store, or combined with other payment methods to make a purchase.
To check out the beta in Steam client simply click here:
steam://storeurl/steamaccount/addfunds
If you would like to test in your browser, please visit:
http://store.steampowered.com/steamaccount/addfunds/
To help Valve test this new feature, now in beta, click here and follow the instructions available there. Remember, even in beta, purchases are real (no refunds). You should only fund with money you actually plan to use on Steam. And as always, please report any feedback here on the forums.
Here are some of our concerns:
1) Where are the money stored? Is Steam suddenly a bank?
2) What security measures did Valve take to actually prevent hijacking accounts in order to steal money (imagine sending Steam funds to your friends in the future)?
I’m sure you guys will find a lot more concerns although it may lead to good stuff like Steam Cards being distributed very soon just like on iTunes (like cards worth $5, $10, $15 etc.).
Update:
Recent changes to the Steam Subscriber Agreement say that the funds cannot be transferred to a different account (or refunded, for that matter).
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Latest on Tue, 06:43 pm
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: money money money
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: Facebook is archiving the old Facebook group of ours, here's new one https://www.facebook.com/pages/SteamUnpoweredeu/260963810615450?v=wall
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: Checkout Crytek's GFACE, a new social platform for gaming http://www.gface.com/closed-beta
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: http://www.youtube.com/watch?v=_Jnk8n3WrXU
: new humble bundle live
: http://www.youtube.com/watch?v=UMWW92UhpZs&feature=player_embedded
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: http://www.tumblr.com/photo/1280/epic4chan/15893009078/1/tumblr_lxkmq8V94p1r9t8yb
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: there's still hope, first ratification of ACTA in polish parliament and even if it passes european parliament has to vote on it then
: yep, another protest today in Warsaw, and next one during National Stadium opening on Sunday
: So PL actually did sign ACTA? :( Is it right that those guy said sth like "i'll not be extorted by those inhabitants"? o.O
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