Quasi-Exclusive! Newell on the future of the PC

I met Gabe Newell a while back when I was reviewing Half-Life 2 or something, but I completely failed to interview him. Well, he was distracting me – I had a game to play! And my dictaphone batteries were probably dead. Anyway, I shook his hand and said that I was just fine, thanks. Comrade Bramwell from Eurogamer.net is a little cannier than me, and when he met Mr Valve at the recent Leipzig computer games convention he sat down to ask him all kinds of searching questions.

Sexy Valve

Many of the answers to those questions are contained within this expansive interview. Bramwell and Newell discuss things such as the problems with DirectX 10, the fact that Portal and TF2 look awesome (more on that later in the week, Valve-fans), and the fact that Gabe didn’t know how much his games cost to make. There’s loads more too, so click up there to read it.

But not all facts were disclosed. No, because Newell also talked about unified gaming and the nature of the PC, and we have those quotes right after that click-hop.

DISCLAIMER: We’re not affiliated with Eurogamer, right. We just know them, and sometimes work for them. Okay – so if they go and do something crazy and dangerous right now, it’s nothing to do with us.

[RPS: That’s Tom Bramwell talking in bold. He can do that, you see.]

This week, Denis Dyack’s been here, and he’s been expanding on his view that a unified gaming console is in the offing. He gave a lecture and said that a lot of the things we’re seeing in the games industry are portents of commoditisation as seen in other industries. We touched on this a little bit last time, but I wondered if you’d seen anything on his lecture and had any views on it.

Newell: I haven’t, so I don’t really understand his argument. When you’ve got large companies like Sony and Microsoft who are willing to lose billions of dollars, I don’t see what incentive there is –

He’s suggesting that they won’t have a choice because of the way the market behaves. He believes that it will become impractical and impossible for developers to make money from games because of the rising costs of development and the three-way split between Sony, Nintendo and Microsoft. So he thinks that they will be forced to work together.

Newell: How do you force a company that is losing billions of dollars – I mean, what’s your method of coercion, right? How do you convince Microsoft that their strategy is wrong when they just wrote off a billion dollars for overheating problems, for warranty issues. So I’m not really sure what the stick is that us developers are theoretically going to use that would be more effective than the sticks that are already being applied. The only case where that might occur, near as I can tell, is if some kind of phenomena occurs in the consumer space that’s already occurred in the office space, which is you used to have a bunch of different devices doing office-automation – you had dedicated word processors, and they cost a couple of thousand dollars, and you had 3270 terminals, and you had typewriters – the typewriter business used to be huge, and nowadays it’s pretty much gone – and all of that became centralised around a single more flexible application platform. Now, in the living room, if we really see this forced convergence of web-browsing, personal video recording, games functionality, and something has to do them all, the PC somehow in spite of the lack of focus of the PC players in making that happen, emerges, then I could see things converging on the PC, on an open platform, but short of that it’s hard to understand how this convergence would occur.

He also actually said that he thought the PC was the ultimate example of a ‘no standard’ system and that it was “going nowhere”.

Newell: [Laughs] There were 140 million PCs sold in the last year. In a single year they’re going to sell more PCs than the best-selling consoles of all time, so when people make statements like that I really have no idea what they’re talking about. The volumes of scales of PC CPUs, in and of itself, is sufficient to keep the PC incredibly competitive against anything. Intel’s volumes are so huge in comparison to Sony’s volumes on the Cell that the Cell could never be anything other than a second or third tier competitor in the CPU market, because it’s all about how many you make, and if you’re only making millions and your competitor is making hundreds of millions, you can’t compete – it has nothing to do with architecture, it’s just what happens when you make little pieces of silicon; it’s whoever makes the most of them wins. Even an order of magnitude difference is pretty insurmountable, much less two orders of magnitude, so I’m not sure I understand his argument, but I haven’t read his papers or seen his presentation.

Moving away from Denis and to his great friend Mark Rein, he said on the subject of PC gaming that he’s been trying to convince hardware manufacturers to move away from integrated graphics, because he thinks if you put in even a low-end NVIDIA chip into a PC that gives people a taste of gaming and they’ll get a lot more upsell. What do you think the PC gaming industry needs to do on the hardware front to reinvigorate itself, because at the moment if you look at the volumes of sale of a lot of PC software it’s much much lower than you see on consoles.

Newell: Well, right now you have – nobody’s actually trying to drive the PC in the way that Microsoft drives the Xbox or Sony drives the PlayStation and Nintendo the Wii. You have people who are creating their own alternatives to those kinds of traditional retail-driven platforms, like PopCap in the casual game space in the United States is huge. The most successful franchise on any platform, I would have to say, is World of Warcraft, because not only have they sold 9 million units, but they make 15 dollars a month off of those units, so when people tell me – if I had to pick one single entertainment franchise to own, not just games, just period, it would be World of Warcraft and it’s not a console game at all. So I’m not sure I always agree. For example, when we talk with analysts, none of them are even aware that Steam existed – they hadn’t factored that into their sales, none of them knew that there were recurring revenue for MMORPGs, none of them had ever contacted any of the casual game sales and had any notion. You tell them ‘there’s this whole game category that’s dominated by women aged 40 to 45, did you even know about that?’ and they’re like ‘really?’ There’s nobody who – I mean, any time they write an article about Nintendo, there are 20 PR people and marketing people on the phone, feeding them data and painting the best possible picture that they can, and in the PC space there isn’t. Since nobody owns the platform and Microsoft has decided to put all its focus on the Xbox 360, there’s really nobody who’s making the case for the PC. Certainly we think the PC is super-viable as a development platform. We make a huge amount of money there and expect to for the foreseeable future.

EDIT: You can read what Dyack actually said about stuff right here. And thanks to Eurogamer for their interesting contribution to RPS.


  1. Martin says:

    Well, I might just open up a can of worms (delicious worms!) here but I feel that the very stick that Gabe is looking for is the billions of dollars “the big three” lose on their hardware (yeah, Nintendo says that the Wii was profitable from the launch but I’m not sure if that’s taking R&D into consideration).

    The reason they’re not working together already is because it’s a case of “we know what we got but not what we might get”. No-one dares risk a cooperation with a rival as they don’t know what they stand to lose from it. There are too many unknown variables.

    I think Dyack is right – it just won’t happen as soon as he thinks. I give it 10 years until we have a Unified Console Platform.

  2. Jim Rossignol says:

    I raise you to twenty!

  3. Tom Bramwell says:

    Listening to Dyack talk, you do get the sense he’s onto something – I just don’t know if he’s completely there. His admission that he has no idea of the economics of how it works are a bit of a tell. It’s hard not to see the main things he’s talking about, like the increased difficulty of developing, which we hear everywhere we go. Looking at it superficially, when it starts being big publishers snapped up by other big publishers, perhaps that’s when we’re heading towards Dyack’s ideal of a unified format.

    Although I like Newell’s defence of the PC. I often wonder about the defence it gets – the sales *are* poor, and I’m semi-sure it will be reliant on next-gen to drive a lot of top-drawer content like BioShock going forward – but the sheer versatility and the fact it’s the root of the Internet (ha) will always mean that it’s the vanguard of proper developments like digital distribution, peer to peer and so on, and, since they’re surely going to shape retail going forward, it’s hard not to see software – utilitarian as much as games – driving the next generation of gaming hardware.

  4. DuBBle says:

    I think that Dyack is correct to claim that the PC serves as a ‘no-standard’ medium. What a pity that Newell chose to address the defenseless ‘going nowhere’ notion. I’d like to know Newell’s opinion on this issue, because I’m quite sure that a lack of a common unifier is the reason for the consumer’s scare-factor associated with PCs and for the saddening bias of magazines such as Edge towards the console market.

  5. Martin says:

    Just a quick one as I need to get out the door…

    I’m sure PC gaming will be around forever but seeing that a lot of developers opt to develop for consoles first and foremost, citing the plethora of configuration variations on the PC, I think that a UCP has a lot to offer.

    I bet my left arm that any developer out there would kill to be able to develop one set of resources for all the consoles out there and just have it work.

  6. Martin Coxall says:

    Well, let’s look at some hard and fast numbers here.

    What percentage copies of BioShock are for the PC version? It’s around 16-17%, isn’t it? Even though it’s obviously the superior version, fools.

    Publishers are going to notice that kind of thing eventually, you know, once they employ people what can add up and that.

  7. Nowon Wil KNo says:

    Not sure if Martin is the same guy as Coxall… however if Coxall is someone different than Martin and he his arguing against Matin’s claim that PC gaming will be around forever ; one must note that the 16-17% is a significant increase in revenue for any developer who choses to port their console game to PC. That is why developers who target multiple console anyway usually port their game to the PC as well.

    What needs to happen for that 16-17% to increase is
    …games need to be playable on intel integrated graphics
    remember that as crappy as it may be… it is at least comparable to an ATI 7500 or an GeForce3… especially if you take advantage of the immense processing power available on even low end PCs (remember Nabe’s comparison of the sales of Intel and Cell) a game developer can get some impressive results

    …the crappy EULA that nobody reads needs to go away
    and be replaced by the simple green “FBI warning” we see in all movies. Software is published, not manufactured. The lengthy “no warranty” nonsense belongs on software no more than it belongs on books.

    …in fact, games need to be immediately playable from the discs without an install…
    Steam gets close to this… the moment it is downloaded you do not need to go through an install afterwards. Content can be streamed to the hard disk for the sake of performance during play.

    In fact, there is no reason for any app to not be stand alone… the install shield and latching to registry nonsense needs to be gone.

  8. Morry says:

    For games to be playable on integrated graphics means that the hardware needs to be improved significantly. More and more games are being developed for the consoles, therefore the ports of these titles will require a mid-range graphics card to run reasonably well. It’s a good thing that AMD and ATi have combined, as this scenario can theoretically happen – motherboards shipping with a mid range video card as standard. Once the average consumer recognises that the PC they buy at the shop is a formidable gaming machine, they might just use it as the machine for the whole family – work and play in the one machine.

    I’m not sure about instant-play games though. Games that are pre-installed on the PC take greater advantage in terms of load times, resources and, of course, mods.

  9. Kadayi says:

    The fundamental problem with Console games is that the games they host are ultimately constrained by the limitations of their hardware controllers to provide the user with a means to instigate in game actions. The bonus for Consoles is the fact that because of their enforced simplicity they are very easy to pick up and learn. In comparison the PC with it’s keyboard/mouse combo offers up far greater interface opportunities for developers, but more often than not developers don’t invest time in making good, simple and intuitive interfaces (like you have to have with consoles), but instead just assign everything to innumerable keys, which relies too much on a players inner geek to get to know.

    An example of what I mean is say changing your rates in CS:S. To do this you have to enable the developer console inj your settings, then type in 3 separate command lines with the appropriate settings for each. Knowing how to do that isn’t something that’s found in the manual, you have to search around the web to find it, but an enormous number of serious CS players actively do it,especially when it comes to match play (I know..I’m one of them…).

    If it was a pure console product the rates would either change automatically dependent upon your connection type, or there would be a simple and intuitive GUI interface too take care of it all. Until PC developers are prepared to tackle these sort of nitty gritty things the PC will always lag compared to consoles in terms of immediate popularity, even though it should be the superior platform.

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