Valve: 'PC Gaming Market Is Not Dying' - DEBATE

The PC is no longer a viable platform. The PC is all about casual gaming. The PC market is dying.

We've heard it all before, and so has Valve's Doug Lombardi. Irecently caught up with the marketing VP during an Electronic Artspress event. At the end of the night, the house music dying down, wehad a long chat on a number of topics--many of which pertained to hiscompany's primary platform.
What does Valve think of the PC Gaming Alliance? Are they as tired ofthe PC gaming "problem" as we are? What is at the root of the issue,anyway?
Shack:
Do you guys ever get tired of the same old "PC Gaming Is Dying" stories?
Doug Lombardi:
I mean, I think,we sort of laugh at it. Because we've been wildly successful--we'revery fortunate, you know. Our games have all done really, really well,Steam has taken off and become this whole other business for us, Valvehas never been in better shape--and yet everybody is talking about howin the PC world, the sky is falling. And we're like, we've been doingthis for 10 years now--actually 12 years since the company started, 10years since the first game came out--and we've never been in bettershape, financially or otherwise. The company is over 160 people now--itwas 20 people when we shipped Half-Life. We've got multiple projectsgoing--we were always a one-project-at-a-time group.
We don't understand why that story gets traction over time. I thinkpeople have finally started to clue in to the fact--there was a storylast week where people finally looked at the online subscriptionrevenues for WoW and all the things that look like WoW, and realized,wow, there was a butt-load of cash being made here that wasn't beingcounted at the register, at retail, in North America, which is whereall these stories come out of.

NPD, god love 'em, they release a US retail sales report, and peopletake that and say that's the world picture. And it's just not true.It's not like NPD is trying to be evil. Their job is to report NorthAmerican sales data. They're doing their jobs. But people are takingthat and discounting.. in Germany for example, retail sales of PCproducts crush all other games, with the possible exception of the DS.It certainly kills all of the next-generation consoles. So if peoplewere looking at that and factoring it in, if people were looking atWoW's subscriptions alone and factoring it in, looking at Steam salesand factoring it in.. Just look at what Popcap's doing--Bejeweled andPeggle and all this stuff--they're not in that NPD data.
If you go around and you look at all these different things that arehappening on the PC, and you add them together, my hunch is that [thesales numbers] would actually be much larger than all of the consolesput together. Again, minus the DS, because the DS is this crazy thingby itself. But talking purely in terms of the Wii, the PS3, and the360, if you added those together and looked at the whole picture, I'dbet you PC would be even, if not bigger than those three systems interms of the money that's changing hands and the opportunity for doingbusiness.
So we always look at those things, and we always kind of laugh. We'redoing just fine, Popcap's doing just fine, Blizzard'scertainly--they're printing money down there. We always sort of shakeour heads, and go, okay, sooner or later someone's going to write thebigger picture story and perceptions will change.
Shack:
Interesting that you use the word "perception." Is this a perception problem?
Doug Lombardi:
It is absolutelya perception problem. I mean one of the things that happensis--Microsoft has an army of PR people that work for Microsoft. Theyhave at least two agencies that are additional armies. Nintendo I'm notas familiar with their PR outline, but I'm sure it's similar. Sony issimilar. The PC has nobody. They've got people like us, in our sparetime, talking to guys like you. I mean if there were hundreds of PRpeople stationed around the world, whose whole job was to call youevery day and tell you why the PC was a great platform, your perceptionwould probably be different.
Shack:
As far as improving perception, what do you think about something like the PC Gaming Alliance? I noticed you guys aren't partners. Any particular reason behind that? Do you see a real benefit coming out of the PCGA?
Doug Lombardi:
We'll see. Imean, I think it's great that a group of major players are gettingtogether and trying to address the problem. For us, we're really busydoing Steam, building our games. We're not really members of any of theboards, whether it's the IDG, or the PC Gaming Alliance, or whatever.If those guys want our opinion, we'll give it to them, but being onthose boards is kind of a job. We try to remain a small independentstudio, and if our help is needed in some way other than just joiningthe group for the sake of being another developer sitting a table atthe meetings, then we'll talk to those guys. I mean we're totally opento it, we want them to succeed, but until we see an actionable reasonfor us to be involved in it, you know, how we can help in a tangibleway, we're going to kind of sit in the bleachers with everybody elseand wish them luck.

Wedefinitely wish them luck. Like I say, part of the reason why the PChas the perception issue is that they don't have a group of peoplechampioning it. And if the PC Gaming Alliance says, "We need to attackthis from an advertising and PR standpoint," we'll be there to givethem quotes. [laughs] So however we can help. Just because we're not onthe board doesn't mean we're not rooting for them.

Shack:
Do you see a PC gaming resurgence on the horizon, at least in terms of how people think about the platform?
Doug Lombardi:
I think you cansee it in this room. I don't know what the final total is here, but Ithink there are eight PC games and three console games here?
Shack:
Yeah, about that.
Doug Lombardi:
And this is EA's"getting ready to start clubbing you guys over the head for E3"campaign that's beginning. So I think it's starting to happen. I thinkwe saw some of that last Christmas too. A lot of the big titles wereOrange Box on the PC, Crysis, World of Warcraft: The Burning Crusadedid really well. I think this year you're going to see a lot of thesame thing with Left 4 Dead, Spore, Battlefield Heroes. There's a lotof people making great PC product. id is getting ready to rev up abunch of really great PC product, and those guys are always great.They've been legends on the PC since, what, '93? So I think it alwayssort of comes and goes.

There's this kind of roller-coaster ride: the consoles launch, their PRagencies go out and do everything they can to try and say the PC isdying, they'll prop up the sales of the console, the console starts toget old in the tooth, the PC starts leapfrogging in terms of graphicsand bigger releases. So we're almost what, mid-way through the consolelifecycle now? So yeah, over the next two years the story's going tocome back that the PC is bigger, things like Left 4 Dead and Spore, theid titles are going to come out and everybody's going to be like, "Wow,those console titles are looking kind of crappy."

Shack:
Do you think PC system requirements are an important part of this perception problem?
Doug Lombardi:
Oh, I think it'sa big problem. I think it's a big problem. You know, we try to bereally responsible. Going back to Half-Life 1, we tried to be reallyresponsible in saying the average PC gamer should be able to play thisgame start to finish and have an enjoyable experience. Now, they're notgoing to have the best graphics, they're not gonna have every shaderturned on and what have you. But they're gonna have a decent framerate,all the monsters and creatures are going be there, and all the dialogueis going to be there. From a basic content and experience level,they're going to be able to go through that.
We take that Steam hardware surveytwice a year, and we publish those results of usually a million or moregamer systems. We publish those very consciously to try to help otherpeople realize like--here's a million people on Steam and what theirsystem requirements look like. No, you can't drop support for DirectX 9yet. There's still 70% of the people playing on Steam today are runningon DX 9 cards. So you've gotta be cognizant of that, and RAM and CPUspeeds, same way.
In the old days we had sort of this weird, "Okay, here's some of whatthe card guys and CPU guys are telling us they're gonna be selling, andhere's this voodoo crystal ball thing we're going to do and try toguess." Now that Steam survey gives us an exact data point to workfrom. You've got a million people, we do it every six months, and wecan go back and say 18 months ago it was here, and here's the adoptionrate, and we can see the trajectory. It's pretty black and white.
I think hopefully one of the things we did really well with Orange Box,and we've heard this from a lot of people: "I fired up Portal on mythree year old machine and it ran great." And that helps us sell moreunits, and helps the perception of the PC industry. People buy a newgame and their system is 18 months old and it doesn't run, or it'sunplayable, that hurts the PC industry. That person who just spentmoney on a PC game is going to have a question mark next time he walksinto the store. And he's gonna say, "Geez, I don't know, if I buy it ona console I know it's going to work."
So I mean, I think people just need to do a better job of looking atwhere gamers are at, being more honest about the system requirementsthey put on the box, and just sort of taking a step back and saying,"Gameplay is king, performance is second, and graphics are somewhereafter that." People have said to us, you know, Portal is cool, but itwasn't the prettiest game. Well, okay, it sold a whole lot, it wasnamed game of the year by over 30 outlets, and many of the people whoplayed it told me they finished it and had a great time. I would muchrather have that than have people tell me it was the prettiest gamethat came out last year.
Shack:
Does theresponsibility lie somewhat with the hardware manufacturers to markettheir products in a reasonable way, or is it up to the developers toset sane requirements?
Doug Lombardi:
Oh I think it'stotally the fault of the developers. Totally the fault of thedevelopers. I mean the graphics guys, their job to keep pushing theenvelope, and as they push the envelope, move the lower-end cards downto a nice price point, so that there's always this evolution that'shappening. If you're a hot rod type of guy, and you want to spend $400on the latest thing, you want to have a smoking machine, and when Left4 Dead comes out you want to run it at its highest resolution withkiller framerates, and call your buddies over for a beer and make themall drool over your system, awesome. But if you're just a guy who wantsa decent PC for less than a thousand bucks, and wants to be able to rungames on it, there should be a card out there that runs games at adecent famerate and decent fluidity. Then it's on us to write for bothof those guys.

It's a business decision, really. Too often I think the developmentside of things runs the house. People say, "Oh, we've got to targetthose high-end core gamers. We have the best graphics, sweetestscreenshots, and we'll get more press, and we'll win." Okay, well,you'll win in the pre-launch phase. Then when the game comes out, and60-70% of the people who don't have that sweet machine--maybe evenhigher numbers, maybe 80% don't have that sweet machine--well you justcut off your ability to sell to all of those guys.
You know, it's hard to be able to have games that scale, and to writeperformance on the high end, and write performance on the bottom end,but you know, winning in any industry means some hard work, and there'sa certain level of hard work that developers have to takeresponsibility for. And when you see games that do that, where theyhave solid gameplay, and they scale well across machines, usually thosegames do well.