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


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12 responses to “Gabe Newell: Piracy is a “Non-issue” to Valve; Providing better Services Will Result in More Sales”

  1. rottencat Avatar
    rottencat

    I live in Eastern Europe, a few examples of games not available for from Steam: Skyrim, Rage, Bulletstorm, Dead Rising 2, Super Street Fighter IV Arcade Edition. Next to my country is Finland where you can buy all these games.

    Conclusion. Probably there is some smartass developer sitting his ass flat and writing a memo to his boss or some journalist right now that piracy rates in Eastern Europe are way higher than in western part. He will probably get a nice bonus for preparing an article for some newspaper stating that me and my countrymen are causing billions of lost revenues to developers.

  2. ghling Avatar
    ghling

    Would be nice to know if / how much the sales in the rest of europe drop because many players now buy russian cdkeys because they are much cheaper. I think those are all counted as sold in russia and are probably the reason that it is becoming the biggest market in europe.

  3. Daemonhell Avatar
    Daemonhell

    Is the Steam forum hack considered a piracy ?
    If yes, nice “non-problem”.

  4. LaseRad Avatar
    LaseRad

    so if somebody has more than 500usd per month, its justified to pay 60usd for a game?
    i dont think so… id be happy to pay more than russians, but only 25-30pounds for a game rather than 60€.. even the brits dont like when a game is more than 30pounds… btw were talking about pc – not console games

  5. Elbart Avatar
    Elbart

    “which only means to me that gaben just made up a fail statement, no! I’d call it BULLSHIT”
    Sure, people gonna buy 60usd games when they got like 500usd per month for living.
    Geez…

  6. wormmayhem Avatar
    wormmayhem

    Hail to the Gabe baby

  7. f3d3r1c0mb4t Avatar
    f3d3r1c0mb4t

    I have premiums accounts for rapidshare, megauplad etc, but I still have bought around 200 games on steam… Steam is black magic :D

  8. Faark Avatar

    I agree that pricing is a/the reason for piracy. But Valve has a big advantage with steam. Once you buy a game once, you are on steam… get advertising, have a social environment, and so on. Good chances that you buy sth again. Thats why is EA trying to establish Origin by all means.

  9. LaseRad Avatar
    LaseRad

    non pricing issue… russia is about to become the largest market in europe… maybe it has something to do with prices being 1/4 of a standard US price… which only means to me that gaben just made up a fail statement, no! I’d call it BULLSHIT
    sure its nice that Valve supports Russia with the steam collection, im all for the “same service” to everybody around the world

    and imho valve has the same problem with piracy on pc as any other company, if not even bigger… thing is, they sell so many copies, that they simply dont care.. this is how I see it

    about the ubi problem, I have a feeling that they took their facts from the bohemia interactive cause… the makers of Arma games stated recently that for each 3 legit players of their game ARMA2 there are 100 failed attempts to connect multiplayer with the pirated copy of the game
    Article on PC gamer

  10. slay Avatar
    slay

    This is great, Gabe, show Ubisoft, how things must be done :)

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