Some big news broke over the weekend with Valve possibly admitting that they are entering the console space next year. I say possibly as the reports are all a bit vague as to what the plans are but they all have one thing in common; Valve will create a tightly controlled PC box that will play Steam games directly on your TV.
Now we can all argue about semantics forever – but that’s a console. So if that is true could this be the beginning of the end for one of the most revered companies in the industry.
Valve are famous for two reasons; they made some incredible games and the world is still desperately waiting on Half Life 3 and they have by far the largest online gaming store on the planet with Steam - which has at least 5 million players online at any one time and has over 50 million registered active accounts.
Recently this domination has been under attack from the likes of EA’s Origin and others, but to say it is losing in this market would be way off the mark. So why do I say a console would be commercial suicide?
Right now everyone Valve works with has no interest in hardware or the platform that the titles are played on. Activision, Ubisoft and EA (to a certain extent) are more interested in the end result than where the war is being waged.
However as soon as Valve enters the lounge it is then going head to head against Microsoft (the platform most Steam games are played on) and Sony. Sony and Microsoft earn more royalties for Activision and Sony than Steam does and that corporate pressure will be applied quickly and efficiently by Microsoft and Sony against the publishers.
The console market can barely hold 3 players in the field, and the addition of a fourth who also controls the PC market will not be taken lightly by the powers in the industry.Microsoft could quite quickly make it very hard to continue to operate Steam in the OS market while forcing publishers to offer the Valve console worse deals and higher prices. It’s dirty business but when we are talking billions I don’t believe anyone is above getting their hands a little dirty.
Gabe has had an issue with Windows for a while now and he may see an attack at the Xbox as a good way to win his argument with them, however I feel it will backfire and while Valve won’t go under it will start suffering in profits and in the eyes of consumers; something he really doesn’t need.
More importantly, what do you think? Do you think Gabe is big enough to go toe to toe with the corporates or is he going to be eaten alive?