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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.

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.

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Jim Rossignol