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Newell: Rise of closed platforms is "ominous"

Wed 12 Oct 2011 8:19am GMT / 4:19am EDT / 1:19am PDT
PeopleHardware

Valve MD calls out Apple and Xbox Live, believes Apple will "disrupt the living room" with new product

Valve's managing director Gabe Newell has proclaimed the rise of closed platforms like the Apple's iOS and Xbox Live as "ominous".

According to a report on The Seattle Times' website, Newell made the comments while participating in a panel, hosted by former Xbox exec Ed Fries, at the WTIA TechNW conference.

Newell argued that companies that once built platforms to enable developers, "instead view themselves as more rent guys who are essentially driving their partner margins to zero."

"On the platform side, it's sort of ominous that the world seems to be moving away from open platforms... They build a shiny sparkling thing that attracts users and then they control people's access to those things."

"I'm worried that the things that traditionally have been the source of a lot of innovation are going - there's going to be an attempt to close those off so somebody will say 'I'm tired of competing with Google, I'm tired of compeitng with Facebook, I'll apply a console model and exclude the competitors I don't like from my world.'"

And there are "very large structural investments and structural changes" in the games industry's immediate future that will further threaten the viability of open platforms.

When asked by Fries to clarify that he saw Apple as essentially a closed platform, Newell responded in the affirmative.

"I consider Apple to be very closed. Let's say you have a book business and you are charging 5 to 7 per cent gross margins. You can't exist in an Apple world because they want 30 per cent and they don't care that you only have 7 per cent to play with."

Steam is different, he claimed, because although Valve takes a commission from games sold through Steam, developers can use its services and tools to do business elsewhere for free. Newell maintained that if Valve were to build a hardware platform it would be open to other distributors, in the interests of healthy competition.

The panel also discussed the future of consoles, which Newell believes can no longer exist independently from other platforms like the internet, mobile and desktop.

A probable disruptive force will be Apple, which Newell suspects is poised to launch a new product that will fundamentally challenge consoles' traditional function.

"I suspect Apple will launch a living room product that redefines people's expectations really strongly and the notion of a separate console platform will disappear," he said.

26 Comments

Nalin Sharma Management Consultant, Video Mind Games Ltd

6 0 0.0
... and Steam isn't closed?

Posted:3 years ago

#1

Nicholas Lovell Founder, Gamesbrief

204 236 1.2
Gabe echoes my arguments directly, only my conclusion was "Five reasons why Steam will destroy the PC games industry"
http://www.gamesbrief.com/2010/05/five-r...

Posted:3 years ago

#2

Aleksi Ranta Product Manager - Hardware

288 138 0.5
"A probable disruptive force will be Apple, which Newell suspects is poised to launch a new product...."

I would be very suprised if Gabe didnt know this for a fact. I would also be very suprised if Valve wasnt already developing for said new product.

Posted:3 years ago

#3

Dave Herod Senior Programmer, Codemasters

528 788 1.5
@Aleksi - Not sure I agree. If he did know for sure, and was developing for it, he'd be under strict NDA and probably wouldn't risk even mentioning it.

Posted:3 years ago

#4

Kyle Davidson

12 0 0.0
"I suspect Apple will launch a living room product that redefines people's expectations really strongly and the notion of a separate console platform will disappear"

That's a pretty bold prediction, and I'm not sure if I would welcome it or not.

Posted:3 years ago

#5

Gustav Nisser Project Manager, Exertis Ztorm

12 4 0.3
/like and I'd definitely say that I suspect the same regarding an Apple living-room product.

Posted:3 years ago

#6

Andrew Goodchild Studying development, Train2Game

1,254 421 0.3
If Apple create a living room device that can serve as a console, it will sell very well. It alone won't replace consoles, the average console gamer won't want to/can't afford to pay the 500+ that Apple will charge for something that has lower spec than the next offerings from Sony and Microsoft. I certainly don't think Apple will ever sell hardware at a loss to get into the home.

Posted:3 years ago

#7

Andrew Jakobs Lead Programmer

241 99 0.4
Ofcourse Apple is doing just that (propably the AppleTV box), as they want to have that slice of the pie too..

Personally I hate platforms like iOS and consoles as they are closed, the only way to do something with them is to hack the platform.. I wouldn't have minded if Apple had also let other 'marketplaces' on their system which isn't as restrictive as theirs (if I want crap on my device it's my choice not theirs, and let's not forget, there's also enough crap in the appstore).
Also what I really don't like is how Apple handles their store, you have to pay to get into the store, but even after reviewing your product before putting it on the store, they can remove it if it's in the store.. WTF is the reviewing for then, other than getting some extra money..

But windows 8 will also go that route if you want to use the metro-interface (ofcourse that protection will be hacked quite soon, and also should be hacked as it's nonsense that I can't even put my own applications on my own computer)..

Posted:3 years ago

#8

Tim Carter Designer - Writer - Producer

582 322 0.6
You people don't get it.

Programmers want open platforms. The rest of us could give a shit.

Designers don't care whether a platform is open or closed. They just want the thing to work, they want stability, they want decent tools (a single set of tools to use for a wide variety of game types - instead of having to sap so much of their creative energy learning new tools), they want to know that when they make a game they *can* get it on the market. That's all they care about.

The audience, meanwhile, would love to have ONE machine to play all their games (okay, maybe a second one for mobile).

If you want to ensure "openness" do what the film/tv industry did: create consortiums that develop standards. Film/tv have been through things like the beta/vhs wars, and they don't like it. They know it's bad for business. Tech people, on the other hand, are so in love with jacking off their tech innovation that they don't realize how much the rest of us are tired of the disruption.

Edited 2 times. Last edit by Tim Carter on 12th October 2011 3:42pm

Posted:3 years ago

#9

John Blackburne Programmers

41 0 0.0
There's closed and there's closed though. Pay your $100 (a small fraction of your costs) and you can make an iOS game and have Apple distribute it. Compare that to the costs (direct and indirect, such as TRC requirements, submission costs) and risks (that it might get pushed back or rejected) of making a console game. Users don't care how closed it is: they just see the range and depth of cheap and free apps.

It alone won't replace consoles, the average console gamer won't want to/can't afford to pay the 500+ that Apple will charge for something that has lower spec than the next offerings from Sony and Microsoft.

People wrote the same before the iPad came out: it will be too expensive/lack too many features (where's the USB port and SD card slot?) and so fail. But design was more important than a checklist of features, while Apple's investment in the OS, in the iTunes app store, in chips and in fabrication meant they could sell it at a price no-one could match. If they wanted they could do the same in the home: the Apple TV already runs iOS, so all it needs is a controller.

Posted:3 years ago

#10

Aitor Roda Game Designer, Cyanide Studio

6 0 0.0
Great point Tim, but companies don't care about customers, companies only care about profits and if they see a chance to make a buck, they will do whatever it takes to get it.
Also, the growth potential for Apple is starting to be limited in their current fields, they need to expand to new areas if they want to continue to grow, however, I wonder if they are really sure that home consoles (or the likes) is the field where they can get the most ROI, because with 3 already established players on the field, is going to be difficult for them to scratch some profits. We saw how much it costed Microsoft to get it going for the first Xbox, always competing 1 step behind Nintendo and Sony, it took them until their second generation to start to be competitive. The gaming division was a big concern for many at Microsoft that didn't understand the negative balances year after year.
Also, for any kind of success in that market you need a strong support from 3rd parties (EA, Ubi, Activision and so on).

And regarding the subject, I believe there is a little difference between Valve and Apple. Valve has a games platform on PC, you can publish your game on their platform but you can also do it without them, there are still a bunch of games that are published outside Steam, but if you want to publish something on the iPhone/iPad you are forced to go through Apple you don't have other way around. I think that is what he is meaning.

Posted:3 years ago

#11

Amy O'Neil Production Assistant, Red Redemption

1 0 0.0
@Nalin

Steam is a delivery system, not a platform. And the barrier to entry is not in the same league as what is being discussed.

"Closed platform" = Paying to become a licensed developer for individual consoles/platforms, purchasing the proprietary SDKs (if applicable) and then, in some cases, trying to obtain authorization for the finished product to be "allowed" into that market (iOS).

As far as I can tell from our expriences with Steam, the main barrier is "can we get their attention long enough to have them look at it". That shouldn't be understated, and Steam is by no means perfect, but it's worlds away from, say, the App Store (for starters, it doesn't care where else we're selling the same game).

Posted:3 years ago

#12

Jon Wetherall Managing Director, Onteca Ltd

4 0 0.0
I perceive Steam to be a closed platform and iOS to be an open one. Apple let us release what we want on App Store but Steam just rejected us with no feedback. It is all a matter of perspective.

Posted:3 years ago

#13

John Blackburne Programmers

41 0 0.0
Maybe Newell means iOS is closed compared to e.g. the PC which, yes, is more open than iOS. It's so open the market for PC games was decimated by piracy, until Valve came along and introduced their closed platform on top of it. So perhaps he's grumpy as Apple won't let them do Steam for iOS? He might also be looking to the future, with the App Store on Mac and whatever Microsoft have planned for Windows 8, with some concern.

Posted:3 years ago

#14

Tim Carter Designer - Writer - Producer

582 322 0.6
@John Blackburne: I think you nailed it there.

Valve really are somewhat full of themselves. They've been taking their fanboy feedback too seriously (for the games they did, years ago - they are just doing sequels now, and even then most of their games are acquisitions), and not realized that, so far is Steam is concerned, us other developers just want a good decent storefront to deal with - without bowing and scraping.

For all intents and purposes, Steam *is* a closed system.

Edited 1 times. Last edit by Tim Carter on 12th October 2011 6:49pm

Posted:3 years ago

#15

Klaus Preisinger Freelance Writing

1,161 1,229 1.1
And yet driving your partners' margins to zero is exactly what enables your marketing division to crush the competition. A vicious cycle stacking the odds against open systems, such as Linux, for at least 10 years now.

If Valve released their own console, I doubt they would do anything different.

Posted:3 years ago

#16

Morville O'Driscoll Blogger & Critic

1,613 1,476 0.9
I honestly don't get how Steam and Apple can both have the same closed systems, and I think it does a dis-service to everyone here to think they are.

I'll grant you that they are both closed, inasmuch as they require a certain... "level", shall we say, to get a release through them. But to say they're both the same? That seems too simplistic. Have Steam censored games? Have they forced games to be re-written because of content standards? Have steam *forced* themselves to be the only digital storefront? And, I don't mean forced by psuedo-monopolistic tactics such as Steamworks, but literally made themselves the only digital PC store. No? Then how can they be regarded in the same breath?

I do agree with Jon, that it is all perspective. I will say, however, that I've read a vast amount about the lack of adult/mature content on the iOS, and I don't think placing Steam alongside the almost-puritanical Apple is a good comparison, either from a journalistic point of view, or a creative-designer point of view.

Edit to add: [link url=http://gizmodo.com/5477966/apples-boobie-apps-banning-resulted-in-the-suicidegirls-removal
]http://gizmodo.com/5477966/apples-boobie...[/link]

Vs

[link url=http://store.steampowered.com/app/57900/
]http://store.steampowered.com/app/57900/
[/link]

One definitely has stricter, more creatively-controlling standards than the other, and such a thing can only happen in a truly closed environment.

Edited 1 times. Last edit by Morville O'Driscoll on 12th October 2011 9:28pm

Posted:3 years ago

#17

John Blackburne Programmers

41 0 0.0
I would think if someone made DNF for iOS it would be approved: some very mature games are on the platform already. But the Suicide Girls app, which according to Gizmodo "used the iPhone's accelerometer to remove the girls' clothes when the phone is tilted", is just pornography and has nothing to with gaming.

Posted:3 years ago

#18

Morville O'Driscoll Blogger & Critic

1,613 1,476 0.9
Ahhh... But a) the SG app was not pornography (as mentioned in the article, it's bra-and-knickers, which isn't dissimilar to the swimsuit Sports Illustrated app), and b) what, exactly, does the fact that DNF is a game have to do with it? Content regulations are content regulations. Unless, of course, you're saying that the content standards for iOS differentiate between a game and an app, in which case surely that's hypocritical, since half-naked women are half-naked women, be they in a game or a "strip" app.

My point is still, in a truly closed environment, the distributor has the final say, and I don't think anyone can say that Steam *does* have the final say when it comes to releasing games, where Apple clearly does.

Edited 2 times. Last edit by Morville O'Driscoll on 12th October 2011 10:11pm

Posted:3 years ago

#19

John Blackburne Programmers

41 0 0.0
Whether it's porn is a matter of definition but it's not really a game, so of little interest to most here. Unless there are examples of games being turned down for content reasons.

And others would disagree with their relative openness: read Jon's post above for example.

Posted:3 years ago

#20

Morville O'Driscoll Blogger & Critic

1,613 1,476 0.9
Oh yes, I acknowledged Jon's point above. It is all perspective. It just seems strange to pounce on Steam, when it's... not quite the same, in my view. *shrugs*

And, as a final note (since I think we might be getting a little too off-topic here. :) ), it's debatable whether only things that are games are of interest to those here. We mustn't forget that games exist in a wider culture, and the impact that Apple's ratings board has on non-gaming products also has an impact on games, even if only slightly. (That is, a company that polices apps quite strictly will be less creatively open than one that does not, broadly speaking).

Posted:3 years ago

#21

Nick Parker Consultant

300 177 0.6
Developers pay a margin to get a service from the distributor. If the developer doesn't feel that the service is good enough, go elsewhere. You can't pick a fight with them all - Apple, Google, Valve, Facebook and Microsoft all have their advantages and disadvantages, and who knows what the long term will bring in terms of business models, but you have to work with what you have and get your game wherever you can.

Posted:3 years ago

#22

Andrew Goodchild Studying development, Train2Game

1,254 421 0.3
@John Blackburne
Re:"People wrote the same before the iPad came out: it will be too expensive/lack too many features (where's the USB port and SD card slot?) "
Going back to my original post, I said that the Apple device will sell well. Just like, as you say, the iPad has. However, just as a lot of people have bought iPads a lot more haven't. For some it's because the cost is prohibitive, for some they just don't like Apple. So my point was that Apple releasing a living room device that in part acts as a console will sell shedloads, and some people eho have PS3s or Xboxs will get one either instead of or as well as the successor to their current platform, a lot of Apple people who don't bother with Xbox/PS/Nintendo will buy them in droves, but that is not the same as every console owner flocking to Apple.
The way you would think things stood if you listened to some Apple people is that no one owns a Windows laptop anymore because everyone uses iPads, this is clearly not the case, and assuming the parrallel will be true for consoles seems to be adding 2 and 2 to equal Apple.

Edited 1 times. Last edit by Andrew Goodchild on 13th October 2011 10:48am

Posted:3 years ago

#23

Paul Johnson Managing Director / Lead code monkey, Rubicon Development

925 1,569 1.7
Closed? Pay them a few bucks and you can get as many fart apps as you like out there.

Speaking as a developer, I'd love to see Apple close it up even more, possibly by raising the entry fee to over a thousand dollars or something. It's pretty galling trying to make professional quality apps for a living when you have to fight for eyeballs alongside nine million pieces of crap that look like a CS students first week project...

And putting aside my obvious bias, what exactly is so good about having all that crap available from a users perspective? They want to get straight to the good stuff too.

Posted:3 years ago

#24

John Blackburne Programmers

41 0 0.0
@Andrew
Apple could not come in take most of the market away from established players, especially those that have decades of experience? They did with handhelds, as iOS is now the number one platform by a large margin, overtaking Sony and Nintendo in a very short time.

Could they do the same in the home market? I think so, if they wanted to. Certainly two of the main players seem almost to be inviting them in by making no moves to release new devices of their own. It's not just that Apple could make a better, cheaper platform (they could but anyone could), it's that they have a software distribution model that should have the traditional platform makers very scared. If users get used to paying from 99 for console games it might kill the market for games costing $50.

Posted:3 years ago

#25

Andrew Coleman Indie game developer

12 0 0.0
I never thought I'd see Gabe Newell engage in spin artistry.

Posted:3 years ago

#26

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