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Steam works

Q&A with Valve's director of business development Jason Holtman
by Ed Fear
April 23, 2008

In just a few years, Valve's steam has become the leading digital distribution service for PC games new and old, with almost every major publisher using the independent developer's platform to sell its titles. We caught up with Valve's director of business development Jason Holtman to discuss the service's success…

When Valve started on the journey toward digital distribution did you think that Steam would grow so large so quickly?

I think we expected growth when we were looking at this years ago – we knew that we were offering a service that people wanted to see and we knew that we had a distribution channel that people would want to use. It does surprise us though: how it grows, who comes on, what’s next, etc.

With that said, though, if you look back at how people came online with Steam – first with Rag Doll Kung Fu, then a couple of smaller publishers, then some larger ones – now we’re at the point in distribution where we’re a known channel, lots of people use us, we’re a known quantity, we reach a lot of people. It’s not surprising now, but six months to a year ago there were moments where we said ‘Wow, this is great.’

There were initially some consumers who weren’t happy with Steam and its authentication procedure, but now it seems that gamers are really on board. Do you think that was just a case of having to get used to the system?

I think it was more than that. We continuously add features, it gets better and better – a great example is that you can play your game from any PC; you don’t have to worry about discs anymore. A couple of years ago some people may have bought a few games from Steam, and now when they get a new computer they just have to put in their Steam details and all of their games are there.

I guess when it first came out it was a little unusual to people, it had a few bugs and it wasn’t perfect, but now we’ve added more and more features and made it smoother I think customers really want it. We find that sometimes when games come out on our service both the publisher and ourselves get e-mails asking to make it a Steam game.

Do you think Steam has given older titles a new lease of life?

Oh sure, yeah, from the large to the small - a good example is that, when we launched the Rockstar catalogue, and all of a sudden we heard a lot of people say ‘Max Payne! I’d lost my discs before and now I want it again.’ And people like Funcom with Dreamfall, an adventure game, can reach a lot of people and open the door to a lot of new customers. So we’re able to reintroduce titles and obviously, because it’s digital, we don’t have to worry about shelf space – it’s long tail, it’s always there for purchasing even a year from now.

What you also might have seen over Christmas when we had our sale is that we also don’t have to do price protections and all these strange deals, you can have an instantaneous sales or have promotions on games. Publishers and developers are finding a lot of flexibility about how to maximise revenue by doing interesting things that are difficult to do at retail.

What were the challenges you faced when trying to get the big publishers on board?

I think at first it was just the newness of it – our first big publishers on board were the Activisions and the 2Ks, but once people started using us and people saw other titles up there and they got more and more used to the idea, it’s now become a matter of course that they’re adding us in to their release schedules. New publishers come on board all the time – once we’ve worked with a publisher we find that they say ‘okay, here’s our future titles, let’s go.’

The nice thing about Steam, and this is a great credit to the people who worked on it and designed it, is that it’s relatively effortless from a tech side to get the game up and running – so publishers and developers often say: ‘You’re kidding – I just deliver unprotected build bits and it’s returned to me ready to go?’ So that’s made it easy for folks too.

How do you think Steam has changed the industry for developers?

I think it’s changed it in some really positive ways – the first thing is that I think it’s made the PC very very strong. I know there are 15 million Steam users out there, and they’re having far better experiences on their PCs than they were before. They don’t have to patch, the communities are kept together… so I know for PC games in general it’s been wonderful.

I think the other thing that it’s helped with is that it’s been great for people like Dylan Fitterer with Audiosurf – he had an Independent Games Festival game and was able to integrate pieces of Steamworks and release his game for $9.99, and he’s on top of the world. So that kind of access to being able to get a game out that maybe couldn’t find a retail shelf has helped a lot.

You mention new industry service Steamworks – tell us how you've come to launch that.

In a nutshell, Steamworks is essentially everything that we’ve got in our own products that we use at retail and in our own platform, all the game services and publishing services. The idea behind it was that we spent a lot of time and effort creating all of these great tools and features for the PC, and we looked at these and thought ‘We should share these with the community.’

The obvious part is that we want to grow Steam’s user base, so the more people we have on Steam the more chance we have to sell things to people, but the other part is that we thought that as we’re great believers in the PC, we really think the PC is a great place to have games.

We think that if we can have tools that can make some of the headaches like installers and anti-cheat and matchmaking and persistent identity frameworks available so people don’t have to do that hard part, they’re going to make better games, more people are going to play PC games and people are going to be happier about it in the long run. Because that’s what we really want, a strong PC environment with lots of people playing PC games.

What’s the reasoning behind launching it for free? It’s the sort of service that you could have charged for.

We could have but, in our minds, that’d be short-sighted to achieve the goals I was talking about before. We want lots of people on board, but if you put a hurdle in front of your partners you’ll be a penny wise but a pound foolish. So we decided that if the real goal was to make the PC a better place there was no reason to charge for it.

Is there an agreement to sign or can anyone use it?

There’s no certification procedure, so we’re not going to say that your UI needs to be this way or this map pack can’t go, but yeah, there’s an agreement – it’s free, but it’s on a title-by-title and partner-by-partner basis. It’s not quite structured the way we structure our engine licence which is out there for anyone to freely download and use, but because of the scale of Steamworks and the things it does it doesn’t make sense for everybody to just start downloading and trying to use it. It’s a pretty straightforward agreement.

You’re also in charge of Source licensing – how do you feel it’s gone in terms of getting the engine out to third parties?

It’s gone really well, we talk to a lot of people all the time and we’ve got people working with Source now – but we’ve not only got people signed up making games in the standard engine agreement but we’ve also got the SDK out there and constantly have people building mods and self-publishing. So Source has been a great success, and there’s been a lot of this last feature set that we’ve added in that’s been great, so everything that we built into The Orange Box is shipping and available for folks to use.

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