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The Valve Way: Gabe Newell And Erik Johnson Speak

As the company begins to let Dota 2 into the wild, Gamasutra speaks to Valve boss Gabe Newell and to project leader Erik Johnson to find out both the decision-making process that lead to the game and also about how things work at Valve.

Christian Nutt, Contributor

August 29, 2011

19 Min Read

[As the company begins to let Dota 2 into the wild, Gamasutra speaks to Valve boss Gabe Newell and to project leader Erik Johnson to find out both the decision-making process that lead to the game and also about how things work at Valve.]

Valve Software's Erik Johnson likes DotA -- and from that, a project is born. Can it really be that simple at Valve? According to managing director Gabe Newell -- yes it can, if things align properly. Relying on interest and talent much more than planning and business strategy, the developer has become synonymous with both quality and success.

In this interview, Newell and Johnson discuss the genesis of the Dota 2 project, the culture at Valve that drives the company's creative and financial success, and a host of other smaller but no less significant aspects of the company and industry.

When it comes to making games, says Newell, "the challenge is to find exciting, worthwhile projects for smart people to do. And then whether you're doing it as an individual, whether you're doing it as a small indie developer, or you're doing it as a larger group, if you can answer that question you're probably going to be successful."

That's Valve's philosophy summed up succinctly, and what follows is a greater exploration of how that plays out throughout the company's larger moves.

Well, Valve chooses very carefully where it treads, right?

Gabe Newell: [laughs] It may look that way on the outside.

Erik Johnson: I'd like to think we just lumber along. And usually run into trees.

So it's not as deliberate as it looks?

GN: Oh no. Hell no. I mean, Dota 2 is really a result of Erik and a couple other guys being huge fans of IceFrog. So that's not like this incredibly, deeply reasoned business strategy. It's like, "I'm a huge fan of this! Oh, we can build a sequel? Awesome, let's do it!"

Well, that makes sense, doesn't it? You already know the potential there.

EJ: Well, I was a huge fan of it, and saw there were lots of other people that were huge fans of it. And most importantly, meeting IceFrog, he was the kind of person that we all wanted to work with.

GN: But what about your marketing? Your market analysis?

EJ: There's no market analysis. I mean, I guess there is, but not in a traditional stupid line graph sense.

Just "a lot of people like this sort of thing"?

EJ: Yeah, a lot of people, here's a person...

GN: But you must've had a business plan!

EJ: [laughs] Yeah, there's no business plan. A bunch of people... It is rare for any single person to be entertaining tens of millions of people on his own. And that's kind of enough for [a business] to be awfully interesting for us.

GN: One of the things about Valve that sort of works for us is that we think about what we do as being a collection of people who really like and trust each other who build products.

So for us, you could come up with a really compelling business plan or a market analysis, and nobody in the company would pay any attention to you at all. But if you said, "If we do this, then we can work with Michael Abrash", then a whole bunch of people would say, "Done! That's it, we have a plan now."

And that's really how [Valve works]... It's a useful thing to know about us if you try to follow what we do, and what our decision-making is, to realize that that's the kind of thing, to us, that's really compelling. And lots of other things, which traditionally drive business decisions at other companies, don't really get much traction at Valve.

Well, I can think of a few obvious examples. One is looking at [Portal predecessor] Narbacular Drop and going, "Okay. We'll turn this into something because it's so good."

GN: Well, the thing there -- and I've talked about this before -- that was really scary to me, was that something had happened with this group, that would've been kind of sad if these people all went their separate ways.

Because a lot of times you can look at something and say, "Oh, it's successful because of this person."

EJ: Carmack.

GN: Yeah. Carmack is so clearly the heart and brain of everything that id does. But with the guys who worked on Narbacular Drop, it was like the magic was in the team, and if the team had split up... That was my read. That there were a bunch of games that wouldn't get made if these guys went their separate directions. So I was like, "That'd be a real shame, so we need to keep them together and see what they can do."

And that turned out -- we ended up making a ton of money because of it, but we didn't do it because we thought we're going to make a bunch of money. We were thinking sort of like, "Gee, it'd be a drag if these guys weren't able to do their next game together." You know, they were going to go off and like have testing positions at large publishers, kinds of things, and it seemed like a waste given what they were able to do together.

But in the case of Dota 2, was it more liking DotA, or liking IceFrog?

EJ: Both, absolutely both.

GN: For us, it's like there's some people you meet and you just say, "I wanna work with this person." And IceFrog is that kind of person. There are a lot of people at Valve who don't ever have to work again. The reason we all go to work each day is we get to work with people that we do. The idea that you can go to work each day and see what this person is doing is pretty exciting.

It's the same way with Doug Church, who is working at Valve now. It's just a total blast for me, to go in and talk with him about enemy design or user generated content. It's just ridiculous how much fun you get to have by working alongside these people.

Have you said what he's working on?

GN: No, we have not said what he's working on.

Didn't think so. Don't expect you to either.

GN: It's cool! I'm excited.

So the strategy then is to harness talent, or collaborate with talent.

GN: Yeah, I'd go with "collaborate", more than "harness." Although in [Valve software developer] Adrian [Finol]'s case, I like the idea of thinking of him...

EJ: Leashing. In Adrian's case, we leash talent.

GN: In fact, I really suggest that you insist that you get a photo to accompany that part of your article. "This is Adrian. He's on a leash."

EJ: We have Photoshop.

Now, I'm assuming Dota 2 is free-to-play.

GN: So the primary focus for us at this point is not worrying about monetization, and it's instead worrying about getting the game right. So we started with a group of IceFrog's testers that he's worked with for all the different versions, and sort of got it to a point where we'd stopped making them crazy with all of the dumb things that we had done.

And The International [tournament at this month's Gamescom] is sort of the next step of that process. It's like, this is a very tough audience; there are a bunch of clear technology pieces and server pieces we have to get done. And the phase after that is, there's going to be an invitation beta, and then after that there's going to be an open beta.

But our focus is really much on building something that's cool, and then we'll worry about monetization. So we're not going to worry about that until later. Premature monetization is the root of all evil.

Conventional wisdom suggests that you have to be aware of your monetization design from a game design level.

GN: I think not sucking is way more of an important thing to pay attention to first. I think every gamer can point to shipping too early, or sucking, as being a way more dominant story in our industry than, "Oh, it was slightly cumbersome to give the company money." I mean look at Minecraft, right? Notch wasn't thinking through his incredibly precise monetization strategy.

EJ: It's also just, do the hardest stuff first, and make the game fun; making a game fun is so hard. It takes so much time. Figuring out how to make sense out of making some money out of it, that's not nearly as difficult.

How much time have you spent on this project so far?

EJ: I think it's been about two years.

GN: How many people are working on it now?

EJ: At this point it's probably 60 or so people, I think.

Did you recruit a lot for this game?

GN: No -- we don't recruit for games. We recruit people...

EJ: Well, we recruited one.

GN: Well, he recruited us. IceFrog. That's just not -- I mean, anybody who we hire, we don't hire to a specific position or to a specific project. The people at the company don't work on specific projects. Everybody's told, "Your first job is to figure out where you can create the most value." So when people end up working on Dota, it's not because somebody told them to go work on Dota. They go work on Dota 2 because they decided , "That's where I'm going to be the most useful."

EJ: It has this really great side effect, too. Instead of having some person review all the products that are going on at Valve, you can tell how a product's doing based on how willing people are to go and work on it. We know a product's pretty likely to be successful, or fun, or at least fun to work on, if lots of people are going to working on it. It's a good method.

Do people have to commit to working on a product for a specific length of time, or a specific split of time even?

EJ: No.

Do people split time?

GN: There are a lot of people who work on multiple projects simultaneously.

EJ: Yeah. People... they're just all committed to making sure that whatever they're doing they feel like it's productive.

GN: It's more interesting to come into, "I'm supposed to deliver this by then", and that's mainly because other people have dependencies. In other words, if you said, "I'm going to do this", in terms of localization, or in terms of this feature, people would be sort of annoyed if you just didn't do it. [laughs]

The purpose of this tournament, is it community-focused, or is it for you to get a sense of how the game is functioning, or both?

GN: Every one of our decisions tends to be multiply-determined. It was a great milestone for the team. I think it's a useful way of showing people where we're at with the project. It was like, "Okay, we haven't done this before. It's actually interesting. We're going to learn stuff that'll impact what we do with Counter-Strike Go. It'll probably affect some of the things we do in the future with Team Fortress." Somebody floated the idea, and the speed with which everybody said "That's a really good idea" was what convinced us to do that.

It also seems that e-sports is riding higher right now than before.

GN: We're not big followers of the e-sports scene, so we don't have super informed opinions about e-sports.

Does it interest you as a company?

GN: I think putting on The International interests us a lot. I think building the technology that you need to run a tournament like this interests us a lot, especially as we move that into Steamworks. So there are clearly some really valuable things.

Suddenly MOBA is a genre, right? Though I don't know if you guys consider Dota 2 MOBA -- that's what [League of Legends developer] Riot calls it.

GN: We usually call it an "action RTS", just because that seems to make a lot of sense to customers. If you say that, they have a pretty good idea what you're talking about. I don't even know what MOBA stands for.

Multiplayer Online Battle Arena.

EJ: I knew that!

GN: I didn't.

EK But yeah, naming your genre, especially a young one, is just tool to kind of help explain to customers what kind of game you have.

GN: I also like the acronym for ARTS -- Action RTS.

That's more charming, I think.

GN: I don't think the name of the genre matters -- as long as customers know what you're talking about.

No it doesn't, but the rise of the genre matters, I think.

GN: Yeah, and I think it's great. I mean, I personally am a fan of these kinds of games, so it's great, as more people are trying out different ideas to move it forward.

Whether or not you do decide to go free-to-play with this, you've been pretty public about the positive side of free-to-play. Do you see that as the way forward, or is it just going to be a project-to-project kind of decision?

GN: I think for each project and for each community you need to do what's right, and I don't believe that there's a one-size-fits-all strategy. All of this stuff changes -- what makes sense today, what makes sense five years from now... There are too many times over the years where everybody in the industry says, "Well, that's it -- we're all going to be doing this."

EJ: We've figured it out; it's over.

GN: I'm still trying to recover from the "everything is going to be an MMORPG, and everybody else will die", or "everything is going to be a Facebook game." So I just think the key thing is to think about your customers, think about how they're going to participate in the community, what are the different ways they create value, and make sure those pieces are all linked together.

Do you think that certain things are going to be squeezed out of relevance? Single player retail games, anything like that?

GN: You always end up looking so stupid any time you make those predictions, right? Because all you're doing is guaranteeing that you're going to be embarrassed two years later when you have that quote read back to you. So I'm pretty sure that we're not doing a lot of 2D games. Although you have FarmVille! They'd probably argue that it's not a 2D game.

Speaking of having your quotes read back to you...

EJ: Uh oh, here it comes!

You were pretty adamantly, initially...

GN: I blame Erik!

...not into the PlayStation 3, but then you came in and ended up putting Steam on Portal 2 to an extent. Were you happy with how that went, in the end?

GN: Yeah! Well, and more in particular, I'm happy with what the customers are telling us, and our Portal 2 customers on the PlayStation 3 are really happy. So I feel good about that.

Do you think they're happier than your Portal 2 customers on the Xbox 360?

GN: I think that they're going to be more happy in the future as we take advantage of the capabilities that we have on the PlayStation 3 that we don't have on the 360.

It definitely seems that Sony is more willing to allow those things.

GN: I think that Sony's made a really smart set of decisions about their approach, and that they'll continue to garner more and more benefits from that approach going forward.

Now I know Valve doesn't have job titles, but when it comes to DotA what is your responsibility to that project?

EJ: [Looks to Newell] What's my responsibility on this project?

GN: Uh... Being Meepo's punching bag.

EJ: The reason we don't have titles is partly because everybody does so many different things.

GN: Erik, more than almost anybody else at the company, does whatever he needs to get done at the time. So he'd be pretty hard to define.

Doug Lombardi, PR: Utility infielder.

GN: Utility infielder. We were just talking about this, actually, ourselves -- it's like this event wouldn't be possible without the group of people we have, and the weird sets of skills that they have. Like Milton [Ngan] figuring out that we had a networking cable, and that's why we had to pause that game. Like I could've spent five years before I figured it out... How often do you have a bad networking cable?

EJ: We have an architect who's a level designer -- he designed this booth. It's kind of handy to have an architect who can do this kind of thing.

GN: So people always are finding different ways to create value. And you saw the trailer, right? That's done in-engine with the game assets. And a whole bunch of people on the team jumped on that and made that happen. And nobody said, you know, "What's my title? I don't see 'cinematics' anywhere in my title." Or, "This isn't using Maya, so I'm not going to work on it."

EJ: Especially, internally, on a team, I've never seen a case where a title has any positive value in any organization; they're only used for bad or evil, internally.

It seems it's also the fact that you don't give people titles so they don't feel they're restricted. It's also, from your perspective, managing, saying you'll allow people to do what they want to do.

GN: Yeah, nobody can ever say "that's not my job." Nobody ever gets to let themselves off the hook. If there's a problem, you've gotta fix it.

But you also don't say to people, "That's not your job."

GN: Right, we never tell anybody, "That's not your job." In fact, we love it when people make problems their problems. The worst thing to do when a group of people get together is point out a problem because you know what's going to happen!

EJ: "I'm really upset about the way we're doing this!" That's your job now!

GN: [laughs] Yeah, congratulations!

There seems to be a lot of kvetching at other game companies, but people don't have the power to address what they're complaining about.

GN: I don't know about other game companies, but it's dangerous to kvetch at Valve. You're suddenly Director of Fixing That Shit! Vice President of It's Your Problem Now.

But it does reduce -- you can't really blame anybody else, and everybody knows that. I don't know, I think it's a great company to work at in terms of... To take a step back, the big contest, the big competitive issue over the industry is, how do you attract and keep and make productive, really smart, hardworking people? And so you need to create an environment with those people who are most likely to come, and most likely to stay, and where they do their best work, and that's what Valve is designed to do. And if we stop doing that we'll evaporate relatively quickly.

Erik could get a job at EA in 15 seconds, right? He's not at Valve because he couldn't work some place else -- he's at Valve because Adrian's there and IceFrog's there and all of these other people are there. And that's why he feels like he gets more work done and has more fun getting it done.

One of the nice things about games right now is that it seems like there's a fair amount of people who are now doing things deliberately, and because they want to. And finding success. Because if you can't find some sort of success you can't continue to do things deliberately and because you want to.

GN: Well, I think, at the end of the day, the challenge is to find exciting, worthwhile projects for smart people to do. And then whether you're doing it as an individual, whether you're doing it as a small indie developer, or you're doing it as a larger group, if you can answer that question you're probably going to be successful.

If you can do something, see how the audience is reacting, and iterate on that feedback in a productive way, you're going to be successful. If you can't, then you're eventually -- regardless of how big your franchise is or how much advertising money you throw at it -- you're eventually going to fail. So that's sort of the scale and variance challenge in our industry right now.

You do a tremendous amount of playtesting internally. I guess that's perceived as "the Valve way."

GN: Yeah, we don't understand how not to do that. I mean shipping a product is just another way of expanding your playtest group, right? You just have a bunch more people. We have the tools now to see how the game is performing, either to expectations or not, and then keep fixing it. The more we do that, the happier our audiences are and the bigger they get.

You've had more of a platform mix now. In a way I think of Portal 2 as being a very big game on consoles. Especially because no one knows how many copies you sold on Steam. I can't say what it's a bigger game for, but it certainly had a huge amount of mindshare on consoles. And Counter-Strike Go will also potentially have a huge amount of mindshare on consoles. Again, do you have a strategy, or does it speak to the games that you're making?

GN: We can never predict; I mean we just try to build good games and then we tend to be surprised. Portal 2 did better on the PC than it did on the consoles; Left 4 Dead did better on the consoles than it did on the PC. So you know we don't try to guess, because we're not sure what value there is to guessing. We've never had a situation where we said, "We really, really want to build something that is more popular for the console guys." Because usually we have a bunch of other higher priority problems we want to solve. So we're glad that people want to play our games wherever they want to play.

I actually would've guessed the reverse, in those two examples.

GN: There you go! That's why we don't try to optimize, because you would be wrong.

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About the Author(s)

Christian Nutt


Christian Nutt is the former Blog Director of Gamasutra. Prior to joining the Gamasutra team in 2007, he contributed to numerous video game publications such as GamesRadar, Electronic Gaming Monthly, The Official Xbox Magazine, GameSpy and more.

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