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Source: http://www.tomsgames.com/us/2008/02/21/gdc_will_steam_add_movies_music/Valve's digital distribution network Steam saw record sales for the holiday season last year, which increased 158 percent from the same period in 2006. After strong showings for third party titles such as BioShock and Call of Duty 4: Modern Warfare, Valve is now looking beyond games at other digital entertainment such as video and music.
Doug Lombari, vice president of marketing at Valve, talked about Steam's evolution and growth, as well as forthcoming Valve titles and the future of PC gaming, at GDC 2008 this week.
Rob Wright: Steam had a pretty impressive growth spurt last year. Were you surprised by the sales numbers, especially for third party titles like BioShock and Call of Duty 4?
Doug Lombari: We were very surprised. The numbers for those titles in particular blew us away. It was a great year for PC games. I don't think that any publisher that's released a game on Steam hasn't come back to it with another title.
Rob Wright: So what's next for Steam this year? Are you looking at different types of content?
Doug Lombari: We're looking at more casual games and international games. And we're also looking at other types of content like video and music. We're definitely having those conversations and meetings, and we're reaching out to folks with other types of digital entertainment. I think before the end of the year, you'll probably see some pilot programs with other digital entertainment on Steam.
Rob Wright: You also released Steamworks to help developers build games on Steam. What are you're expectations for Steamworks?
Doug Lombari: Hopefully, it will have widespread appeal. We think it makes sense to have something like this on Steam, something that helps them create content for Steam. And I don't know if anyone would look at some of the tools in the suite, like copy protection for example, and say 'Oh, I don't need that stuff.' We want people to be able to pick and choose what tools they think are valuable to them. And since we're making Steamworks available for free, we don't have any goals in mind for the number of downloads or anything like that.
Rob Wright: Of the 15 million members on Steam, how many are actually buying downloadable content versus simply purchasing a game and activating it through Steam?
Doug Lombari: Well, it's split. There are still a lot of people that will buy the Orange Box via retail because they want the physical box, and that's fine with us; it's still the same price. But the number of people downloading games through steam is certainly growing. It's definitely moving in that direction. And the funny thing is, it's often not Valve titles like the Orange Box that Steam subscribers are buying for their first download. It's other games like indie titles or Garry's Mod, for example. And Audiosurf has been a huge hit; it's the number one game on Steam now by a wide margin, blowing past the Orange Box and Counter-Strike. And that's great. We love to see that.
Rob Wright: You released The Orange Box for both the PC and the Xbox 360 and PlayStation 3 consoles. Were you happy with the business the console versions did, and how did it compare to the game's PC sales?
Doug Lombari: We were very happy with both the Xbox 360 and PS3 sales. I think the Xbox 360 version did just over a million, while the PS3 [released later in December] version did a few hundred thousand copies. So I think when all is said and done, The Orange Box will have sold about 1.5 million copies on the console, which is great. But the game's PC sales were much stronger.
Rob Wright: How much stronger, exactly?
Doug Lombari: I'd say significantly stronger, at least a two-digit percentage increase over the console sales. And that includes Steam sales, retail sales, and now individual sales of Portal, Team Fortress 2, and Half-Life 2: Episode 2. So when you take the PC numbers for The Orange Box a la carte, they're significantly higher.
Rob Wright: So it wasn't such a bad year after all for PC games, despite the NPD Group numbers about declining retail sales for 2007.
Doug Lombari: Well, the NPD numbers are just a snapshot. In America, there's no doubt there's a problem with PC game retail sales. But look at other countries like Germany, where sales are much stronger compared to the consoles in a lot of cases. So you have to look at the bigger picture; just look at what Blizzard did alone in 2007. And you also have to look at how money is changing hands and how games are being distributed for the PC games business. The PC is way more evolved in that respect, and digital distribution is a big part of it.
Rob Wright: What about piracy? Do you think that's had a major impact on PC games sales here in the States?
Doug Lombari: Well, piracy is bad, of course. But I don't think it's as big of a problem, at least for us, as people think. The majority of gamers still want to do the right thing and pay for their games. There will always be pirated games, movies and music. But the vast majority of gamers are honest and aren't going to steal the games.
Rob Wright: So what's next for Valve's own games? What projects are on tap for the near future?
Doug Lombari: Left 4 Dead is the big one for this year. It should be arriving sometime in the early fall, maybe September, on both the PC and the Xbox 360. The Orange Box was such a huge project for us. We acquired [Left 4 Dead developer] Turtle Rock Studios last month. In hindsight, it was probably a good thing they weren't in the same building as us, because they might have been sucked into the Orange Box, which would have pushed back Left 4 Dead. So we have some other things we're working on, too, like additional maps and other features for Team Fortress 2. We just released the Badlands map and that's been a huge hit. I personally think TF2 is the best thing Valve has ever done.
Rob Wright: What about Half-Life 2 and Portal?
Doug Lombari: We're in the mod now of asking ourselves what's the next Portal project? Where does Gordon go next? So we're probably going to go away for a while, as Valve does, and work on those things. But we're definitely going to have more Portal and Half-Life 2 coming.
Rob Wright: When can we expect Half-Life 2: Episode Three?
Doug Lombari: We're not going to rush Episode Three. In retrospect, the idea of getting a Half-Life 2 episode out every year was too much. We don't want to crank out content. And actually, it's getting to the point where calling them episodes may not be the best thing. Episode Two was longer than Episode One by a few hours. So the content is getting bigger, and the design times are getting longer. We'll be working on Episode Three sometime soon, but there's no specific roadmap yet for the game's release.
