Valve Corporation is an American video game development and digital distribution company
headquartered in Bellevue, Washington, United States. Its European-based office opened in
2012 in Luxembourg. Founded in 1996 by former Microsoft employees Gabe Newell and Mike Harrington,
Valve developed critically acclaimed video game series' Half-Life, Portal, and Left 4
Dead. It has also developed and maintains the Source engine for which most of its games
run on, and the software distribution platform Steam, which has led to the Steam Machine,
a line of pre-built gaming computers running SteamOS.
History Founding and Incorporation
Valve was founded by long-time Microsoft employees Gabe Newell and Mike Harrington on August
24, 1996 as an L.L.C. based in Kirkland, Washington. After incorporation in April 2003, it moved
from its original location to Bellevue, Washington, the same city in which their original publisher,
Sierra On-Line, Inc., was based. Half-Life
After securing a license to the Quake engine in late 1996, Newell and Harrington began
working on Half-Life. Originally planned for release in late 1997, Half-Life launched on
November 19, 1998. Valve acquired TF Software PTY Ltd, the makers of the Team Fortress mod
for Quake, in May 1998 with the intent to create a standalone Team Fortress game. The
Team Fortress Classic mod, essentially a port of the original Team Fortress mod for Quake,
was released for Half-Life in 1999. Gearbox contributed much after the release of Half-Life.
Gearbox Software is responsible for the Half-Life expansion packs, Half-Life: Opposing Force
and Half-Life: Blue Shift, along with the home console versions of Half-Life for the
Sega Dreamcast and Sony PlayStation 2 which included a third expansion pack called Half-Life:
Decay, that enabled two-player split-screen co-op.
Source Engine
After the success of Half-Life, the team led by Keiran Wright worked on mods, spin-offs,
and sequels, including Half-Life 2. All current Valve games are built on its Source engine.
The company has developed six game series: Half-Life, Team Fortress, Portal, Counter-Strike,
Left 4 Dead and Day of Defeat. Valve is noted for its support of its games' modding community:
most prominently, Counter-Strike, Team Fortress, and Day of Defeat. Valve has branched out
with this tradition to continue developing Dota 2 as the stand-alone sequel to the Warcraft
III mod. Each of these games began as a third-party mod that Valve purchased and developed into
a full game. They also distribute community mods on Steam.
Acquisitions and Awards Since Valve Corporation's founding, it has
expanded both in scope and commercial value. On January 10, 2008, Valve Corporation announced
the acquisition of Turtle Rock Studios. On April 8, 2010, Valve won The Escapist Magazine's
March Mayhem tournament for the best developer of 2010, beating out Zynga in the semi-final
and BioWare in the finale. In 2012, the company acquired Star Filled
Studios, a two-man gaming company to open a San Francisco office. In August 2013, however,
Valve ended the operation when it was decided that there was little benefit coming from
the arrangement. Network intrusions
Valve's internal network has been infiltrated by hackers twice, once in 2003 where content
of yet to be released Half-Life 2 was leaked onto the internet, and again in 2011 when
the Steam customer databases and official forums were compromised.
Legal disputes Valve vs. Vivendi case
Between 2002 and 2005, Valve was involved in a complex legal showdown with its publisher,
Vivendi Universal. It officially began on August 14, 2002, when Valve sued Sierra for
copyright infringement, alleging that the publisher illegally distributed copies of
their games to Internet cafes. They later added claims of breach of contract, accusing
their publisher of withholding royalties and delaying the release of Counter-Strike: Condition
Zero until after the holiday season. Vivendi fought back, saying that Gabe Newell
and marketing director Doug Lombardi had misrepresented Valve's position in meetings with the publisher.
Vivendi later countersued, claiming that Valve's Steam content distribution system attempted
to circumvent their publishing agreement. Vivendi sought intellectual property rights
to Half-Life and a ruling preventing Valve from using Steam to distribute Half-Life 2.
On November 29, 2004, Judge Thomas S. Zilly of U.S. Federal District Court in Seattle,
Washington ruled in favor of Valve Corporation. Specifically, the ruling stated that Vivendi
Universal and its affiliates were not authorized to distribute Valve games, either directly
or indirectly, through cyber cafés to end users for pay-to-play activities pursuant
to the parties' current publishing agreement. In addition, Judge Zilly ruled that Valve
could recover copyright damages for infringements without regard to the publishing agreement's
limitation of liability clause. Valve posted on the Steam website that the two companies
had come to a settlement in court on April 29, 2005. Electronic Arts announced on July
18, 2005 they would be teaming up with Valve in a multi-year deal to distribute their games,
replacing Vivendi Universal from then onwards. As a result of the trial, the arbitrator also
awarded Valve $2,391,932. Valve Corporation vs. Activision Blizzard,
Inc. In April 2009, Valve sued Activision Blizzard,
which acquired Sierra Entertainment after a merger with its parent company, Vivendi
Universal Games. Activision had allegedly refused to honor the Valve vs Vivendi arbitration
agreement. Activision had only paid Valve $1,967,796 of the $2,391,932 award, refusing
to pay the remaining $424,136 claiming it had overpaid that sum in the past years.
Blizzard Entertainment, Inc. vs. Valve Corporation Shortly after Valve filed its trademark for
"Dota" to secure the franchising rights for Dota 2, DotA-Allstars, LLC, run by former
contributors to the games's predecessor, Defense of the Ancients, filed an opposing trademark
in August 2010. DotA All-Stars, LLC was sold to Blizzard Entertainment, the developer of
DotA's platform Warcraft III and its world editor, in 2011. After the opposition was
overruled in Valve's favor, Blizzard itself filed an opposition against Valve in November
2011, citing their license agreement with developers, as well as their ownership of
DotA-Allstars, LLC. On May 11, 2012, Blizzard and Valve announced that the dispute had been
settled. Valve retained the rights to the term "Dota" commercially, while Blizzard reserved
the right for fans to use the trademark non-commercially, and changed the name of their StarCraft II
map, Blizzard DOTA, to "Blizzard All-Stars". Blizzard All-Stars was adapted into a stand-alone
game and renamed "Heroes of the Storm" on October 17, 2013.
Games
Cancelled games Incomplete games include a fairy RPG, Prospero
and Stars of Blood. It was also working with Arkane Studios on
Return to Ravenholm and The Crossing. Other ongoing projects
Steam
Valve announced its games platform Steam in 2002. At the time it looked merely to be a
method of streamlining the patch process common in online video games, but was later revealed
as a replacement for much of the framework of the World Opponent Network service and
also as a distribution/digital rights management system for entire games.
Valve has shown support for some of their games. For example, Valve has offered considerable
updates for Team Fortress 2; including adding new maps, new game modes, additional weapons,
new achievements, and additional game play mechanics, as well adding a store which sells
in-game items. All such updates, with the exception of the aforementioned in-game items,
are mandatory, and provided free of charge. As of July 2014, there are over 3,400 games
available on Steam, and in January 2014 Valve announced that it had surpassed 75 million
active user accounts. On August 1, 2012, Valve Corporation announced
revisions to the Steam Subscriber Agreement to prohibit class action lawsuits by users
against the service provider. Alongside these changes to the SSA, the company
also declared publicly the incorporation of Valve S.a.r.l., a subsidiary based in Luxembourg.
Valve set up a physical office in Luxembourg Kirchberg, according to Valve's project manager
Mike Dunkle, the location was chosen for eCommerce capabilities and infrastructure, talent acquisition,
tax advantages and its central geographic locations – most major partners are accessible
with 50% within driving distance. Valve S.A.R.L is used to sell games to United
Kingdom–based users to avoid paying the full 20% VAT. The tax loophole is expected
to be closed on January 1, 2015. Steam Machine
Newell has been critical of the direction that Microsoft has taken with the Windows
operating system in making it a closed architecture similar to Apple's products, and has stated
that he believes that with changes made in Windows 8 are "a catastrophe for everyone
in the PC space". Newell identified the open-source Linux platform as an ideal platform for Steam,
noting that the only thing holding back its adoption is the lack of games.
In 2012, Valve announced that they were working on a console/PC hybrid for the living room
which was unofficially dubbed by media as the "Steam Box". A precursor to such a unit
is SteamOS, a freely available Linux-based operating system that builds upon the Steam
client functionality that includes media services, live streaming across home networks, game
sharing within families, and parental controls. SteamOS was officially announced in September
2013 as the first of several announcements related to the Steam Machine platform as well
as their unique game controller. In early Summer, 2014, Valve announced that the company's
own SteamOS-powered Steam Machine would be delayed until 2015 due to problems with the
game controller. Pipeline
In July 2013, Valve officially announced Pipeline, an intern project consisting of ten high school
students working together to learn how to create video game content. Pipeline serves
a dual purpose: to discuss and answer questions that teenagers
often ask about the video game industry to see if it is possible to train a group
of teenagers with minimal work experience to work for a company like Valve
The latter purpose breaks Valve's tradition of employing experienced developers, as the
company is not very good at "teaching people straight out of school".
J. J. Abrams collaboration At the 2013 D.I.C.E. Summit, Gabe Newell confirmed
that he and director J.J. Abrams were collaborating to produce a Half-Life or Portal film, as
well as a possible new game. Organizational structure
Valve is run as a flat organization without bosses, and uses open allocation. Yanis Varoufakis,
an economist working for Valve, has attempted to place Valve's organization in the context
of theories of the firm and broader economic thinking. Former employee Jeri Ellsworth has,
however, criticized this structure as "a lot like high school", where while the structure
is flat, certain people within the company still have more say in decisions than others.
"Valve Time" "Valve Time" is an industry term used jokingly
with game releases from Valve, used to acknowledge the difference between the promised date for
released content stated by Valve and to the actual release date; "Valve Time" includes
predominant delays but also includes some content that was released earlier than expected.
Valve itself has fully acknowledged the term, including tracking known discrepancies between
ideal and actual releases on their public development wiki and using it in announcements
about such delays. Valve ascribes their delays to their mentality of team-driven initiatives
over corporate deadlines to make sure they provide a high-quality product to their customers.
Valve's former business development chief Jason Holtman stated that the company sees
themselves as an "oddity" in an industry that looks towards punctual delivery of products;
instead, Valve "[tries] as hard as we can to make the best thing possible in the right
time frame and get people content they want to consume. And if that takes longer, that's
fine." For that, Valve takes the concept of "Valve Time" as a compliment, and that "having
customers consistently looking at our property or something you've done and saying, can you
give me more" is evidence that they are making the right decisions with their game releases,
according to Holtman. The company does try to avoid unintentional delays of their projects,
and believes that the earlier occurrences of "Valve Time" delays, primarily from Half-Life
development, has helped them improve their release schedules.
References
External links
Official website