Gabe Newell talks DRM, open to developing gaming hardware

Comic off-shoot The Penny Arcade Report has posted a lengthy interview with Valve's Gabe Newell. While he doesn't reveal the release date for the next chapter in the Half-Life franchise, Newell does note that Valve doesn't want to get into a cycle of constantly developing sequels. He also shares some tasty nuggets about DRM. Rather than telling game developers what they can and can't do with their anti-piracy schemes, Newell prefers to show them data.

Recently I was in a meeting and there’s a company that had a third party DRM solution and we showed them look, this is what happens, at this point in your life cycle your DRM got hacked, right? Now let’s look at the data, did your sales change at all? No, your sales didn’t change one bit. Right? So here’s before and after, here’s where you have DRM that annoys your customers and causing huge numbers of support calls and in theory you would think that you would see a huge drop off in sales after that got hacked, and instead there was absolutely no difference in sales before or after. You know, and then we tell them you actually probably lost a whole bunch of sales as near as we can tell, here’s how much money you lost by bundling that with your product.

Amen, brother. Steam has its own brand of DRM, of course, but it's less restrictive than the alternatives.

Even more interesting are Newell's thoughts on gaming hardware and whether Valve might ever produce its own. The company has worked closely with Razer on optimizing games for its Hydra motion controller, and Newell seems bullish on the prospects for wearable computers. He uses his iPad a lot, too, and he's "really frustrated" with the quality of the gaming inputs. Right now, Newell's dream project would be designing a tablet hardware interface that's better for gaming.

Newell doesn't necessarily believe Valve would be any good at selling hardware, but he concedes that might be the only option to keep driving innovation. Traditional consoles are too restrictive, the Valve chief argues, and he'd rather see gaming systems offer more flexibility for different business models and approaches to content delivery. That's just a taste; hit the full interview for more.

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