Futureshock

Gabe Newell recently talked about the future of the tech industry at a conference in Seattle. Gabe is the CEO of Valve and the visionary behind Steam, the most successful digital distribution service in the world. Here's a few excerpts from his large brain:

“We think the future is very different [from] successes we’ve had in the past. When you are playing a game, you are trying to think about creating value for other players, so the line between content player and creator is really fuzzy. We have a kid in Kansas making $150,000 a year making [virtual] hats. But that’s just a starting point.

“That causes us to have conversations with Adobe, and we say the next version of Photoshop should look like a free-to-play game, and they say, ‘We have absolutely no idea what you are talking about, but it sounds really bad.’ And, then we say, ‘No, no, no. We think you are going to increase the value being created to your users, and you will create a market for their goods on a worldwide basis.’ But that takes a longer sell.

“This isn’t about videogames; it’s about thinking about goods and services in a digital world.”

Newell is one of the few people in the tech industry who "gets it." He understands that the old ways of marketing and distribution are either dying or already dead. That puts him lightyears ahead of the dunderheads at companies like Adobe. And unlike many "analysts" who think they know the tech industry, Newell has the chops to back it up: digital distribution through Steam brings in billions of dollars a year in revenue. (Yes, that's with a "b".)

“The big problem that is holding back Linux is games. People don’t realize how critical games are in driving consumer purchasing behavior."

Gee that sounds familiar... Where have I heard that bef-- Oh, that's right: ME. For the last twenty years.

Steve Jobs' pathological hatred for video games did more to sabotage Apple in the consumer market than all their proprietary tech-xenophobia. There was a time when Apple computer games ruled the roost, (circa early 1980s). Jobs threw all that out the window (pun intended) and surrendered the market to Microsoft for purely emotional reasons. I find it amusing that so many people worship the grave of the late Mr Jobs, because his business sense was constantly being clouded by his personal prejudices; it was always His Way or No Way. Mr Newell thinks the consumer should decide what you push to market.

To be fair, most Penguinheads understand all this and would love to undercut Microsoft with a massive surge in native game development. Unfortunately, the Linux landscape consists mostly of a patchwork of basement dwellers, sociopaths, and closet anarchists, so they've been unable to capitalize -- literally -- on the opportunity that gaming affords Linux. Perhaps Newell and Valve can focus them a bit more. I hope so, because...

"I think Windows 8 is a catastrophe for everyone in the PC space. I think we’ll lose some of the top-tier PC/OEMs, who will exit the market. I think margins will be destroyed for a bunch of people. If that’s true, then it will be good to have alternatives to hedge against that eventuality."

Metro is typical of the overreaction so common among top-heavy and bureaucratic megacorps like Microsoft. I imagine something very like the following conversation took place at Redmond in early 2011:

CorpSuit: "Hey look! Tablets are a Big Deal! We should develop a tablet OS."

CorpDrone: "Throw out Windows and make it a tablet OS! We can shoe-horn it onto PCs. They'll love it! My therapist told me so."

CorpSuit: "Brilliant!"

When Gabe Newell used the proceeds from the success of Valve's mega-hit Half-Life to deploy a digital distribution platform in 2004, he was universally ridiculed by all the "playas" in the industry. Fast-forward to 2012 and watch as Microsoft and EA scramble to deploy their own DD networks in a belated effort to buy a boarding pass for the CashTrain.

Admittedly that single facet of success doesn't make Newell an all-knowing god of the industry, but he's earned a great deal of money through his customer-oriented practices and employee-centric business techniques. And he had the guts to walk away from his cushy job at Microsoft and strike out on his own when he saw them flirting with disaster. I think that's deserving of demi-god status, at least.