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Valve more profitable per head than Google or Apple

Valve more profitable per head than Google or Apple

Valve is estimated to control between 50 and 70 per centof the entire PC download market.

Valve's digital distribution platform, Steam, is said to control between 50 and 70 per cent of the entire downloadable PC games market, which has been valued at $4 billion USD, according to reports.

Speaking to Forbes as part of a company profile, Newell said that Valve was 'tremendously profitable', though he wouldn't offer specific figures. As a private company, Valve doesn't release financial reports publicly either.

However, Newell did reveal that Valve's 200 per cent year-on-year growth and relatively small headcount of 250 employees made the company more profitable per employee than either Google or Apple.

Forbes claims various sources have valued Valve at between $2 billion and $4 billion USD, with an estimated 2010 revenue in the 'high hundreds of millions'. An earlier story from 2005 has Valve grossing $70 million, with a $55 million profit.

Of course, if you think that's impressive then you should check out the lifetime sales for the original Half-Life.

Steam's success if attributed mainly to the convenience it offers players, as well as the competitive pricing for publishers. On Steam publishers earn a gross margin of 70 per cent, compared to the 30 per cent offered at retail stores.

Steam now has over 30 million active Steam account and sells over 1200 games, with six million unique players logging in every day.

Let us know your thoughts in the forums.

56 Comments

Discuss in the forums Reply
wuyanxu 14th February 2011, 11:32 Quote
only 250 people? no wonder there's normal time and there's valve time.
SMIFFYDUDE 14th February 2011, 11:33 Quote
Steam sales FTW
Tokukachi 14th February 2011, 11:34 Quote
Quote:
Originally Posted by article
On Steam publishers earn a gross margin of 70 per cent, compared to the 30 per cent offered at retail stores.

wow, ripping us off big time then....
kylew 14th February 2011, 11:39 Quote
Quote:
Originally Posted by Neat69
Quote:
Originally Posted by article
On Steam publishers earn a gross margin of 70 per cent, compared to the 30 per cent offered at retail stores.

wow, ripping us off big time then....

Huh? :?
proxess 14th February 2011, 11:44 Quote
I don't see how L4D2 at 3.5€ (when I bought it) is a rip off? If anything, it's an insane bargain!
PureSilver 14th February 2011, 11:47 Quote
The funny thing is, I still feel faintly protective of Steam, like it's still a tiny digital upstart facing off against the retail giants - like it was when I opened my account. Today, I suppose, although it's still a small headcount Steam is now a gargantuan corporate monstrosity and if I was interested in helping the beleaguered little guy I should be back shopping at HMV...
Xir 14th February 2011, 11:47 Quote
it's insane for the normal retailers where even "Bargain" nice-price-Games cost 10 euro's:D
SMIFFYDUDE 14th February 2011, 11:48 Quote
Quote:
Originally Posted by PureSilver
The funny thing is, I still feel faintly protective of Steam, like it's still a tiny digital upstart facing off against the retail giants. In actual fact, I suppose, although it's still a small headcount Steam is now a gargantuan corporate monstrosity and if I was interested in helping the beleaguered little guy I should be shopping at HMV...

I kind of feel the same way
Parge 14th February 2011, 12:08 Quote
Steam is just about the only thing keeping PC gaming alive at the moment, its absolutely brilliant and the sales offer genuinely good value for big games and the chance for me to buy a lot of games I wouldn't have bought at full price. Though the publisher might be making less from me, less is better than none.
Parge 14th February 2011, 12:09 Quote
Quote:
Originally Posted by Parge
Steam is just about the only thing keeping PC gaming alive at the moment, its absolutely brilliant in the way it simplifies PC gaming, and the sales offer genuinely good value for big games and the chance for me to buy a lot of games I wouldn't have bought at full price. Though the publisher might be making less from me, less is better than none.
alexandros1313 14th February 2011, 12:09 Quote
@ smiffydude: Yup, me too. I think we get that feeling because Valve and Steam are considered the "champions" of PC gaming nowadays, so it's still a case of "us vs them", ie PC gaming vs console gaming and retailers. It's the same way I feel about all the digital distribution sites and I do my best to support all of them.
Parge 14th February 2011, 12:09 Quote
Ha ha, oops, just quoted myself.
dicobalt 14th February 2011, 12:11 Quote
I bet this really pisses off Steve Jobs.
Spraduke 14th February 2011, 12:17 Quote
I'm waiting for steam to start distributing movies. I HATE itunes for not allowing you to freely re-download items you legitimately bought just because you forgot to backup.

Steam > all
Snips 14th February 2011, 12:24 Quote
The benefits of using Steam are hugely against any negatives I hear. Especially when reformatting drives and reinstalls being so easy with Steam. As to the profit margins of developers who use steam, if that goes back into developing new PC material then so be it.

The perfect example of digital distribution done properly.
Landy_Ed 14th February 2011, 12:34 Quote
Quote:
Originally Posted by kylew
Quote:
Originally Posted by Neat69
Quote:
Originally Posted by article
On Steam publishers earn a gross margin of 70 per cent, compared to the 30 per cent offered at retail stores.

wow, ripping us off big time then....

Huh? :?

Not sure why you're confused. IF retailers take 30% of a new released game, but steam offer the same price for the game digital download only with a 70% margin, what's to be confused about?

All too often I find the media version of a game cheaper on Amazon or even on the shelf at Tesco than I find from Steam.

As for the " Valve doesn't release financial reports publicly either" statement, do the US government not require financial figures to corroborate tax returns on all companies? these are public records, I can't imagine disclosure laws are much different to the UK, my little private contracting company still had to submit year end figures, and those are requestable (at a fee) from the revenue by any interested party.

Just because they don't post group financial statements on their corporate website doesn't mean their profitability cannot be accurately determined.
Goty 14th February 2011, 12:35 Quote
Quote:
Originally Posted by Parge
Steam is just about the only thing keeping PC gaming alive at the moment, its absolutely brilliant and the sales offer genuinely good value for big games and the chance for me to buy a lot of games I wouldn't have bought at full price. Though the publisher might be making less from me, less is better than none.

Don't worry, if you're anything like me, they make much more off of you from your spending on those sale pages than they would have if you were buying a tenth as many games at full price.
Dannythemusicman 14th February 2011, 12:38 Quote
Quote:
Originally Posted by Snips
The benefits of using Steam are hugely against any negatives I hear. Especially when reformatting drives and reinstalls being so easy with Steam. As to the profit margins of developers who use steam, if that goes back into developing new PC material then so be it.

The perfect example of digital distribution done properly.

Enough said really. Steam does everything right, and even without the holiday sales it whips the pants off any other medium. Admittedly it's initial success may have largely been driven by the release of Half Life 2, however back then many of us would have wondered why they wanted a digital release and of course now we can see why!

It's difficult to imagine how there can be more competition in the market as the barriers to entry seem fairly high now that Steam is so well established. I wonder if Steam should be some form of 'cooperative' platform between the current stable of developers and distributors but I'm sure it wont go that way considering the profits Valve must be making.

There's very little in the way of public anger towards Valve and Steam, we could be shouting about how much profit they make and how their prices are too high for a digital platform but we're not. We're happy with the service and Valve know how to make their customers happy, end of. Well maybe part from episode 3... :-p
Woodspoon 14th February 2011, 12:39 Quote
Steam is awesome and I love it.
But now this has been brought to the attention of "corporate" types, just wait for the slew of badly thought out and badly implemented digital download platforms.
misterd 14th February 2011, 12:48 Quote
Quote:
Originally Posted by Woodspoon
Steam is awesome and I love it.
But now this has been brought to the attention of "corporate" types, just wait for the slew of badly thought out and badly implemented digital download platforms.

GFWL :P
kempez 14th February 2011, 13:18 Quote
It's good to see a company with good, original ideas, get great profits. Wish I made that much!

Seriously though, Valve deserve this kind of profit. Steam is a superb platform and really pushes PC (or Mac in my case), gaming forward.

We shouldn't argue about developers getting profit, that's the point of a business. As long as the games are great value in general there's no issue. The Steam sales are amazing vfm. Counter-Strike was a free add-on for Half-Life 2 and I must have played that for literally over a month in total, never mind playing the game through twice. It's like MW2 and Black Ops: I played mW2 for over 24 days game-time! Bargain at £26 (plus £20 map packs). Can't name anything else I've ever got that good value for money.
azrael- 14th February 2011, 13:20 Quote
Competetive pricing...? Only when you consider the various STEAM sales.
Necrow 14th February 2011, 13:21 Quote
Steam sales FTW. They have a fantastic business model that is customer based rather than purely for profit. But with 250 staff it's no wonder support is as slow as it is when it is required.
ChaosDefinesOrder 14th February 2011, 13:24 Quote
Quote:
Originally Posted by misterd
Quote:
Originally Posted by Woodspoon
Steam is awesome and I love it.
But now this has been brought to the attention of "corporate" types, just wait for the slew of badly thought out and badly implemented digital download platforms.

GFWL :P

Don't forget EA's online store where everything is full MSRP!
kylew 14th February 2011, 13:33 Quote
Quote:
Originally Posted by Parge
Steam is just about the only thing keeping PC gaming alive at the moment, its absolutely brilliant and the sales offer genuinely good value for big games and the chance for me to buy a lot of games I wouldn't have bought at full price. Though the publisher might be making less from me, less is better than none.

I wish people would stop with the "PC Gaming is dying, Valve are keeping it alive", I love Steam, a lot, I've got over 200 games on my account, but let's stop with this nonsense.

Also, didn't you read the article? Publishers are making more money from Steam sales, not less.
SMIFFYDUDE 14th February 2011, 13:39 Quote
^

I was going to say wow 200 games, but i just counted my steam games and it comes to over 90, so 200 doesn't sound as many as i first thought.
kylew 14th February 2011, 13:39 Quote
Quote:
Originally Posted by Landy_Ed
Not sure why you're confused. IF retailers take 30% of a new released game, but steam offer the same price for the game digital download only with a 70% margin, what's to be confused about?

Because it seemed like they believe that if the publishers are making a higher profit from Steam, that they're automatically ripping us off. I think the purpose was to highlight just how little those who make and publish the game make when selling in a shop, compared to Steam.

The simple fact that publishers have a margin of 30% in stores, but 70% online doesn't simply equal rip off. With retail sales, it works on an individual boxed copy sold, essentially, with Steam, they're actually making money while it's costing them money, it's common sense that they'd earn higher margins, regardless of the actual price, because it can be very expensive to get a game in to a shop, whereas it can cost practically nothing to get it on to Steam, until some one buys it.

You want the developers and publishers to be making a higher margin on the games they make and publish, surely? With all the people who whinge and moan about how "PC gaming is dying" this is surely a good thing?
kylew 14th February 2011, 13:43 Quote
Quote:
Originally Posted by SMIFFYDUDE
^

I was going to say wow 200 games, but i just counted my steam games and it comes to over 90, so 200 doesn't sound as many as i first thought.

:p

That's just my Steam collection of course, I have just as many boxed PC games too, and about the same number of console games. But yeah, with the Steam sales, it's very easy to rack up a good collection of games.
wafflesomd 14th February 2011, 14:19 Quote
Quote:
Originally Posted by ChaosDefinesOrder
Quote:
Originally Posted by misterd
Quote:
Originally Posted by Woodspoon
Steam is awesome and I love it.
But now this has been brought to the attention of "corporate" types, just wait for the slew of badly thought out and badly implemented digital download platforms.

GFWL :P

Don't forget EA's online store where everything is full MSRP!

And you can only download the game from them for two weeks.
)¡n× 14th February 2011, 14:48 Quote
Quote:
Originally Posted by PureSilver
The funny thing is, I still feel faintly protective of Steam, like it's still a tiny digital upstart facing off against the retail giants - like it was when I opened my account. Today, I suppose, although it's still a small headcount Steam is now a gargantuan corporate monstrosity and if I was interested in helping the beleaguered little guy I should be back shopping at HMV...

Yeah I'm right there with you too. But whether large corporation or small startup they obviously got it right. I bought a second copy of GTA 4, when it went on sale, just to be able to play it from Steam instead of having to deal with a disk check. Besides WoW there isn't a single game I won that I didn't buy or now have a copy of on Steam. And the best part, you never loose them! You'd think Microsoft would be able to at least duplicate some of Steam's success but they made their platform into a joke.
digitaldave 14th February 2011, 14:56 Quote
the best thing about steam is it is portable and cross platform.

say you go away to your parents for the weekend, mum has say a iMac, and you want to play a game, download steam, download the games that you want (of course not all are cross platform) and you are playing again, legally.
bob_lewis 14th February 2011, 15:13 Quote
"It's a deal, it's a steal, sale of the f*cking century."
kempez 14th February 2011, 15:17 Quote
Quote:
Originally Posted by digitaldave
the best thing about steam is it is portable and cross platform.

I'm with you. I got a Mac, but still wanted a quick blast of some older PC games when I fancy. Installed Steam and away I went.
[USRF]Obiwan 14th February 2011, 16:01 Quote
I guess all 250 employees drive a Ferrari then...
HourBeforeDawn 14th February 2011, 16:17 Quote
alright use that money to get more people because dammit I want HL2 Episode 3 >.<
law99 14th February 2011, 16:39 Quote
Quote:
Originally Posted by Snips
The benefits of using Steam are hugely against any negatives I hear. Especially when reformatting drives and reinstalls being so easy with Steam. As to the profit margins of developers who use steam, if that goes back into developing new PC material then so be it.

The perfect example of digital distribution done properly.

I massively impressed that they give that much back to them as it will really help PC game development. The way the media industry is moving with services like this and spotify, iPlayer, 4od and such is promising.

Valve are clever to not totally undercut retail as well. Less people angry and bitter = :)
M7ck 14th February 2011, 16:40 Quote
Quote:
Originally Posted by Snips
The benefits of using Steam are hugely against any negatives I hear. Especially when reformatting drives and reinstalls being so easy with Steam. As to the profit margins of developers who use steam, if that goes back into developing new PC material then so be it.

The perfect example of digital distribution done properly.

This
Denis_iii 14th February 2011, 17:39 Quote
time to expand and sort out HL2 ep3 or HL3
frontline 14th February 2011, 19:01 Quote
Damn, that must be one impressive profit share bonus each year per employee :)

Wonder if there is a vacancy for a tea boy.
bobwya 14th February 2011, 20:59 Quote
Quote:
Originally Posted by dicobalt
I bet this really pisses off Steve Jobs.

Jobs has other things on his mind at present me thinks...
DBA 14th February 2011, 21:41 Quote
By using my unholy logical sense, I can surely say that this is not possible and is a lie (like the cake). Earning money on PC games isn't possible since every single PC gamer only pirate games. Just look at Crysis 2! not a single one of you have bought the game, and yet it is all over the internet! you all make me sick!
digitaldave 14th February 2011, 23:55 Quote
Quote:
Originally Posted by kempez
Quote:
Originally Posted by digitaldave
the best thing about steam is it is portable and cross platform.

I'm with you. I got a Mac, but still wanted a quick blast of some older PC games when I fancy. Installed Steam and away I went.

well the portable part is just as impressive too, I went to a friends house a few weeks back for a few beers, mentioned ive been burning everyone as the pyro on tf2 lately, downloaded steam, log in as me, download tf2 and after a few more beers he's playing it/hooked :)

the cross platform part just makes it available, I just wish more games where cross platform, thats my only gripe (I run win 7 as a VM for some things but trying to get away from windoze)
b5k 15th February 2011, 01:35 Quote
For those that mention that Valve hasn't released Steams financial figures is because they're a private company and can do what the hell they like. It's privately funded (not publically) so they're not required to submit stuff for public scrutiny.
metarinka 15th February 2011, 04:34 Quote
Quote:
Originally Posted by Landy_Ed
Quote:
Originally Posted by kylew
Quote:
Originally Posted by Neat69
Quote:
Originally Posted by article
On Steam publishers earn a gross margin of 70 per cent, compared to the 30 per cent offered at retail stores.

wow, ripping us off big time then....

Huh? :?

Not sure why you're confused. IF retailers take 30% of a new released game, but steam offer the same price for the game digital download only with a 70% margin, what's to be confused about?

All too often I find the media version of a game cheaper on Amazon or even on the shelf at Tesco than I find from Steam.

As for the " Valve doesn't release financial reports publicly either" statement, do the US government not require financial figures to corroborate tax returns on all companies? these are public records, I can't imagine disclosure laws are much different to the UK, my little private contracting company still had to submit year end figures, and those are requestable (at a fee) from the revenue by any interested party.

Just because they don't post group financial statements on their corporate website doesn't mean their profitability cannot be accurately determined.

yes corporations are required to show basic earnings statements to the securities and exchange comision, and some public knowledge tax record stuff. This is so they can certify on a basic level it's not a front company or tax haven. If the company isn't traded then the information is pretty limited, I think there's lots of ways to balance the books to hide or deflate profits.
metarinka 15th February 2011, 04:35 Quote
also, one thing would valve please let the user control the location games install too, it can be quite annoying sometimes having to reinstall steam just because you want to move your steam apps to a different hard drive then copying over 100+ gigs of files.
Snips 15th February 2011, 08:59 Quote
Quote:
Originally Posted by metarinka
also, one thing would valve please let the user control the location games install too, it can be quite annoying sometimes having to reinstall steam just because you want to move your steam apps to a different hard drive then copying over 100+ gigs of files.

Exactly, allowing Steam to be installed on one drive (a small SSD) and the game data to be installed on another drive (F3 1TB Spinpoint) would be an excellent improvement.
kempez 15th February 2011, 09:58 Quote
I just install steam on my storage drive, you'd be running the games from a slower drive anyway, so makes no difference.
Snips 15th February 2011, 10:11 Quote
Right you are.

I actually installed just the games I'm playing now on the SSD, mainly CS:S.
Woollster00 15th February 2011, 11:54 Quote
Quote:
Originally Posted by [USRF
Obiwan]I guess all 250 employees drive a Ferrari then...

Give me a job Steam ;)
kornedbeefy 15th February 2011, 15:13 Quote
Quote:
Originally Posted by kylew
Quote:
Originally Posted by Parge
Steam is just about the only thing keeping PC gaming alive at the moment, its absolutely brilliant and the sales offer genuinely good value for big games and the chance for me to buy a lot of games I wouldn't have bought at full price. Though the publisher might be making less from me, less is better than none.

I wish people would stop with the "PC Gaming is dying, Valve are keeping it alive", I love Steam, a lot, I've got over 200 games on my account, but let's stop with this nonsense.

Agreed. PC gaming was never dying. Just ammo used by console gamers to attack it and if Steam disappeared today I'd buy my PC games somewhere else. I wouldn't quit gaming on IMHO the best gaming platform. I don't mind sticking in a disc. It's really not that hard, I've done it for many, many, years. ;)
sofalover 15th February 2011, 18:57 Quote
Quote:
Originally Posted by metarinka
also, one thing would valve please let the user control the location games install too, it can be quite annoying sometimes having to reinstall steam just because you want to move your steam apps to a different hard drive then copying over 100+ gigs of files.


Moving your steam library, worked for me recently without having to download 100's gigs..again.
http://www.gamerstemple.com/features/FRViewArticle.asp?ArticleID=849

Who can resist the allure of those publisher packs.
WhiskeyAlpha 15th February 2011, 22:28 Quote
Quote:
Originally Posted by Snips
Exactly, allowing Steam to be installed on one drive (a small SSD) and the game data to be installed on another drive (F3 1TB Spinpoint) would be an excellent improvement.

Install Steam on the SSD and use "symlinks" to link to the necessary directories on the HDD. Works nicely here :)

http://en.wikipedia.org/wiki/NTFS_symbolic_link
leveller 15th February 2011, 22:55 Quote
Quote:
Originally Posted by PureSilver
The funny thing is, I still feel faintly protective of Steam, like it's still a tiny digital upstart facing off against the retail giants - like it was when I opened my account.

I feel the same. Gabe and his company really do a massive amount for the PC gaming industry like providing Steam, being an indie outlet, and using the PC as a springboard for new ideas, but also gaming in general. True pioneers.
Tech NoOb 16th February 2011, 02:19 Quote
Quote:
Originally Posted by Neat69
Quote:
Originally Posted by article
On Steam publishers earn a gross margin of 70 per cent, compared to the 30 per cent offered at retail stores.

wow, ripping us off big time then....

Well in the UK we're ok. But in Europe the average price of a gameon Steam is 50 Euros, similar to the USA as I understand.

Steam sales are nice when they happen, but if you want a cheaper alternative you can also wait for a few months and buy cheap from Amazon; even if your in Europe. Or as alwaysyou can support your local shop. (But I have found the PC games section to be lacking somewhat at times).
Xir 16th February 2011, 09:49 Quote
Yeah, there are workarounds, but it would be preferrable if you could rearrange the already downloaded stuff INSIDE steam.
Snips 16th February 2011, 10:26 Quote
Quote:
Originally Posted by WhiskeyAlpha
Quote:
Originally Posted by Snips
Exactly, allowing Steam to be installed on one drive (a small SSD) and the game data to be installed on another drive (F3 1TB Spinpoint) would be an excellent improvement.

Install Steam on the SSD and use "symlinks" to link to the necessary directories on the HDD. Works nicely here :)

http://en.wikipedia.org/wiki/NTFS_symbolic_link

Cheers dude, I'll check it out.
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