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  Valve's community content is bigger business than you might think
 

March 15, 2013   |   By Frank Cifaldi

Comments 13 comments

More: Console/PC, Social/Online, Indie, Business/Marketing, Video





"How do you give an award for best game design when it's, you know, a community of 10 million people who are building the experience?"
- Valve co-founder Gabe Newell ponders the state of the industry five years from now in a post-ceremony interview at the BAFTA awards (video embedded above).

Newell doesn't speak publicly very often these days, though when he does, he is more often than not espousing a trend that his company is embracing fully: the democratization of the video game industry. We've spoken previously about his vision for turning the company's game distribution platform Steam into a truly open ecosystem curated by its users, though there's another side to this too, one that is already working well for Valve: the democratization of in-game content.

Don't miss: Let's talk about Steam opening up

According to Newell, community members creating and selling content on its Steam Workshop platform are making as much as 300,000 Euros (nearly $400,000) each, and that's assumedly after Valve has taken its 75 percent cut of the adjusted gross revenue. Even by the most conservative estimate, this would mean that at least one user has put well over a million dollars into Valve's coffers alone. Talk about whales!

This is big, big business for Valve. In fact, Newell attributes open platforms like Workshop as being the main driver behind an estimated 50 percent growth in Valve's business in the last year. And he doesn't see the demand waning anytime soon.

"I think we are going to continue to see tremendous innovation coming out of that potential. Out of the unusual, crazy, weird, disgusting, but ultimately wonderful experiences that people are creating for each other," Newell says.
 
 
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Comments

Daniel Campbell
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Whew. That's pretty awesome. One of the things I love about their plan is that they give something to the content creators as well. Valve could have easily been stingy with the earnings but instead they share the wealth. Seems like with every move they make, they first ask the question, "How will this benefit our users?"

Jimmy Albright
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Isn't the steam content profit rake at 75%? Some might disagree, but if that's true and Valve takes 75% I would say that borders on stingy.

Still, some profit is better than none I suppose...

Lewis Wakeford
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@Jimmy They are getting paid for something that most of them where doing for free before hand, I'd say most of them are pretty happy with that. Especially the ones that are basically living of their TF2 hat money.

Curtis Turner - IceIYIaN
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They take 30% on games, but more on mods I guess.

As a modder of Valve games for over a decade, I'm glad somebody at Valve stepped up. Even one to five percent would've been amazing.

Half-Life 3 or the latest version of the Source SDK Base 2013/2014 could be a changing point in my life. In the mean time, like a good chunk of modders, I had to switch engines/frameworks.

Jorge Garcia Celorio
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Excellent video. I really liked what the man who introduced the award said regarding games (I do not know if he is some sort of Sir, Lord, or prominent figure in British media). (Paraphrase) "Games are a different and fulfilling experience altogether. Moving from games to movies does not mean you are 'stepping up'". Comments that respect our craft continue to permeate mass media, which I think, is a positive signal to everything game developers do. Congrats to all gamers and game developers!

Mike Griffin
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This, and several other recent events, sort of takes the edge off the big unknown risk of supporting Valve's (actual) forthcoming Steambox. That community content concept will be center stage.

Heck, even if I'm a larger developer more accustomed to big console space, I'm asking Valve what I can do for its upcoming Steam vessel/hardware. Simply based on the notion that Valve's coffers are full and the company is braced for risk, and -- through all of the industry's ups and downs -- somehow they don't stop making the right decisions. Or elegantly correcting their trajectory.

The massive fan and registered user base to tap into doesn't hurt.

It seems it's just good sense to do business with Valve in this particular era of the games industry. Even J.J. Abrams wants in.

Jay Anne
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50% growth of what? What do non-outlier content creators actually make?

I love Valve and they are pioneering something great. But there's a lot of marketing speak that makes it difficult to understand exactly what is going on.

Matt Wilson
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I've heard that there are a few professional 3D modellers who are making more via Steam than they are via their day job.

But you are absolutely correct, Valve's closed-mouth policy on numbers makes it hard to gauge.

Michael Joseph
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I don't think "democratization" is quite right is it? Valve choosing a business model that lowers or removes barriers to entry and allows more creators to be compensated for good work isn't democratization. It's just the type of business innovation you get when private businesses are able to compete against the stagnant, protectionist, colluding, publicly held corporations.

Steven Christian
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"According to Newell, community members creating and selling content on its Steam Workshop platform are making as much as 300,000 Euros"

Wait, isn't Steam Workshop a platform for Free games, mods, levels and other content?

Lewis Wakeford
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Valve can choose to make certain content "official" and monetize it, basically. The workshop is where it goes first though.

Dan Eisenhower
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Why do we automatically associate financial success with merit? Isn't an award like a BAFTA supposed to honor artistic achievement? Maybe the Oscars should start going out based on what films have the highest box office numbers?

John Gordon
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"Valve's community content is bigger business than you might think"

I have no idea how big any of Valve's business ventures are, because they never report anything.


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