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Steam's boss talks subscriptions, NFTs, hardware

He's the Gabe: he's the man, man.
[The GameDiscoverCo game discovery newsletter is written by ‘how people find your game’ expert & company founder Simon Carless, and is a regular look at how people discover and buy video games in the 2020s.]

Welcome back, satyrs, succubi, and lesser gods, to the spectacle that is another week in video game-land. While we all push that boulder uphill forevermore, we can at least stop along the way to check our email, have a snack, buy games that benefit Ukraine, and read this newsletter.

Oh, and Steam Deck coverage? While we do have our Steam Deck on hand (thx Valve!), OS updates were changing ‘platform discovery’ UI majorly - as late as 24 hours before last Friday’s embargo. But we think the major early UI changes are now rolled out, so we’ll write up impressions for Wednesday.

Unguarded billionaire chats: Gabe Newell edition!

As part of the Steam Deck’s launch (read The Verge’s review if you want a snapshot before Wed, btw!), select sites published wide-ranging interviews with Valve co-founder & head honcho Gabe Newell on Friday.

This level of insight - since Newell is not media-trained to pull punches or conceal opinions - can be extremely interesting. And he did all this while hand-delivering autographed Steam Decks to lucky locals in Seattle? Truly superGabeN!

The ones we particularly noticed were this in-depth RockPaperShotgun chat, a 15-minute IGN video chat which spawned some spin-off articles, and a PC Gamer interview which extracted Gabe’s comments on Steam x NFT games and on subscription services on Steam. (And an Edge Magazine print-exclusive interview.)

One important caveat: Valve isn’t a top-down organization (see ‘Handbook For New Employees’), so I tend to see Newell’s pronouncements more as directional alignments than policy. So it’s more like ‘we all think this thing, and here’s my 2c on it’ rather than ‘I have instructed my employees to do this as company policy’.

As noted, we’ll talk more about Steam Deck and discovery on Wednesday. But to start the week, here’s some other major topics that I think are worth analyzing:

NFTs, blockchain and Steam - why it’s not gonna work out:

Newell was pretty specific, telling PC Gamer: “There's a difference between what it should be and what it really is currently in the real world. And that's sort of where we were at with the blockchain-based NFT stuff: so much of it was ripping customers off.”

Similarly, he noted to RockPaperShotgun: “It's much more about the actors than it is about the underlying technology, or the rationale for what we're doing”, also explaining why Steam accepting Bitcoin was rolled back in 2017. It was both a lot of fraudulent payments, and because “…volatility is a bad thing in a medium of exchange.”

I agree that’s the state of the market right now: NFTs are generally financially speculative tokens with games ‘stapled on’ to them, and Play To Earn games like Axie Infinity are trying desperately to balance very volatile economies even as we speak. (It doesn’t seem easy, looking at this new analysis of F2P/P2E combo Thetan Arena.)

Fellow ‘rich person who says what he wants’, Epic CEO Tim Sweeney has been getting Twitter-baited into ‘hot takes’ on this, of course. His comments re: the situation? “My notes say ‘Valve bans crypto to ensure it gets 30% of all revenue from games distributed on Steam.’ Because if scams were the real reason, then surely they’d allow developers to collect Visa payments directly as Valve itself does.”

After he took a deep breath or two and calmed down about platform cut, Mr. Sweeney did provide his view on games that include NFTs: “I support your right to refuse to buy games with NFTs, but not anyone’s ‘right’ to prevent all other gamers from buying games with NFTs.” Hence Epic being OK with NFTs in other people’s games on Epic Games Store. Your mileage, as always, may vary.

Valve’s fine with (some? all?) thirdparty subscription services on Steam:

The PC Gamer piece has Newell saying, when asked if Valve was planning subs, or if Game Pass titles could come to Steam: “I don't think it's something that we think we need to do ourselves, building a subscription service at this time… But for their customers it's clearly a popular option, and we'd be more than happy to work with them to get that on Steam.”

This has obviously been read as ‘OMG Game Pass coming to Steam!’ by many. But the devil is in the details here. Yes, EA Play is on Steam as a paid subscription, with a host of games published by Electronic Arts. And it’s quite possible that Ubisoft may eventually want to bring Ubisoft+ to Steam, which’ll work just fine - it’s all first-party games.

But with PC/Xbox Game Pass including a vast majority of games not being published by Microsoft, this brings a host of technical and contractual complexities:

  • Could arbitrary third party games on Steam be associated with a subscription from another company?
  • Would there need to be a three-party agreement signed within Steam (Valve, dev, and publisher) to allow this?
  • Could one Steam game be included in multiple third-party subscriptions?
  • If Steam permitted third-party games in subscriptions owned by other companies, would they open it as a feature to all, or just let Microsoft do it? (One would hope/imagine the former.)
  • If you could only include Microsoft-published games in a Steam version of Game Pass (some kind of ‘Mini Game Pass’), would the same payments allow you to play third-party published games off-Steam on other platforms? (And could Microsoft explain this access discrepancy cogently?)
  • Oh, and ‘is Microsoft OK with paying out 30% of Game Pass subscriptions signed via the platform to Valve’, of course?

So I’m definitely filing this one under ‘Valve/Gabe is philosophically open to stuff like this, but the logistics have not been worked out’. It’s a high-level ‘we’re cool with this sort of thing in abstract’, not an announcement.

What might happen at some point, we speculate, is a Game Pass app - using cloud streaming - on Steam Deck. That would run on Deck in the ‘Non-Steam Shortcuts’ section, for “apps that have been added to Steam from desktop mode”, and would be downloaded manually. (Maybe there’ll be some way to grab via Chrome eventually?)

In the meantime, Valve says it has actively been working with Microsoft to get Game Pass cloud streaming working via the Chrome browser on Steam Deck. There’s a patch that’ll be rolled out soon to Chrome which’ll make the Steam Deck behave like an Xbox controller for this very purpose, Valve tells us.

The Steam Deck is a hardware basis for many devices - even VR?

Yet another Newell interview popped up during our research for this piece - this time with Eurogamer. And it encapsulated what we’re hearing about Steam Deck being a base for future mobile hardware ventures for Valve - and maybe not just handhelds.

Specifically, Newell said: “A lot of the [biometrics-based] technology that we might be using and future versions of that comes, you know, from technology that we have to develop for VR. And then if you flip it around and you look at that as like a highly performant mobile PC gaming device, you sort of say, well, why can't I have that in a tetherless integrated VR solution?”

He’s more specific in the Edge Magazine article: “One of the things [Deck] represents is a battery-capable high-performance horsepower that eventually you could use in VR applications as well… we’re not really there yet, but this is a stepping stone.”

There have been previous reports that one of Valve’s next VR projects, codenamed Deckard, may be a standalone headset. What exactly comes out in this space is uncertain. But we do know that Valve has an active hardware division beyond Steam Deck & is continually interested in both high-end and medium-end (?) VR and innovative interfaces.

So, as the Valve CEO says, covering both subsequent screen-based handhelds and different ways of interacting than joystick and touchpad/screen: “The opportunity with subsequent versions of Steam Deck is to start to look for those kinds of applications or those kinds of capabilities, and see what sort of applications that enables.”

[We’re GameDiscoverCo, a new agency based around one simple issue: how do players find, buy and enjoy your premium PC or console game? We run the newsletter you’re reading, and provide consulting services for publishers, funds, and other smart game industry folks.]

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