The day after announcing Valve's new indie gaming initiative Greenlight, Jason Holtman, the company's director of business development, took time out of his recent DotA addiction to explain more about the new scheme and to address some of the issues facing Valve.
Below Holtman offers his thoughts on EA as competition, why Valve are terrible people to ask if you want to know the future of the industry, and why the most popular person in their office right now is an economist called Yanis.
Q: You announced Greenlight yesterday, which seems to show that Valve really trusts its community?
Jason Holtman: We don't see it as risky at all, and I think we not only implicitly trust our community, we have fantastic people in our community, but all the data we have about what happens when you involve a community on a large scale, all of our data points to it's always successful.
There doesn't usually seem to be much risk in any of it. I mean you want to do it right, you want to make sure you've got the right ways for it to be consumed, ways for things to get uploaded, but it's always been a huge positive. We've never had this moment of like 'that went horribly wrong when we asked our customers to help us out!' It's always been 'wow that was explosively great, that was far better than we can do.'
So our hope is we're kind of following our data and experience in Greenlight and if we're trying to get the best the best things builts and help developers and customers the most in the indie space, these are the type of solutions that have worked really well in the past. We would hope that they work well again.
Q: Have you got any predictions about the sort of games or developers that will be successful on Greenlight?
Jason Holtman: I think we're going to get better games. And I don't just mean better games because we'll take out the finding function, like I think they're just going to get found better and found faster, we'll just have better data about it. My expectation is that would happen because the community is going to be better at it.
The second piece that I predict, and I predict because I hope it happens, is our other hope for the mechanism isn't just that it's voting, what we're actually trying to do is create this space and a function using the Workshop and Greenlight piece where developers and customers get together earlier and they actually start iterating. So it's not just like 'I have this thing, vote on it and tell me if it's good or not.' We hope that the feedback cycle looks like 'wow, I'm getting a lot of interest in this', and maybe that person who thought they had a little idea all of a sudden goes 'maybe I should spend another year on this? maybe this is bigger?'
Or the person who has this grandiose idea that's not working out so well and they're getting feedback goes 'maybe I should just pare this down and make it smaller?' and then they find success there, and I think all of those things can make better content that finally gets out there. I would hope that happens. I would hope that the games we would expect to be built now get them out faster and find better ones that we couldn't do, but I also expect that fundamentally maybe different things will get built. The smart people will build different things because they're talking to customers better.
Q: And that's the purpose of allowing developers to share early builds?
Jason Holtman: That's the idea. And again I think that will change when we get that out there, and it will morph as the developers and customers find out what's useful, but that is exactly it. We want people to be involved in not just voting what's good but actually seeing the process and giving that developer that feedback during the process, because that's this one problem that we were solving ourselves for Greenlight, which was I would just find stuff and how do we not make mistakes?
This is what I talked about yesterday, we don't have enough people, we don't want to make mistakes, there's another function that's built in there that will have to solve as it goes which is developers who are making great things early on aren't established, they have no way, they have no really good way to find a nice group of people to help the or to give them feedback about what they want. Not just voting what's good or not but helping them do it. And hopefully this will solve some of that as well.
Q: Is this, along with Kickstarter, the start of a more collaborative relationship between developers and gamers?
Jason Holtman: So the other thing about what we're encouraging with the indie guys is closeness to customers. That's what we do all the time, and we find it works. This isn't a solution for small folks, this is a solution for everybody. if you're developing something or making entertainment content, types of things we make, being as close to your customer as fast as you can get is always good. And it should apply all the way from big to small. We're sorting out a specific problem with indies with Greenlight, but if bigger guys can say 'oh, if early on when I'm trying to plan the next XYZ number three, what if I could figure out a way to get even better customer input or better help?' we would of course help them.
Right now a lot of people use proxies for that, they have study groups, marketing people, demographics, I don't know, but the closer you can get the faster you can get, you're more insured about building the right thing and having the data to figure out what you want to build.
Q: Why are other big publishers not adopting the same collaborative approach? Is it fear or just the way things have been done for so long?
Jason Holtman: I don't know. There's lots of smart and talented people at other publishers and houses and creative houses, and they have all kinds of reasons for why they do what they do but I think in terms of the working structures, you know I was talking about a specific Valve working structure yesterday, I think this newer structure that gets done by having peers and having lots of connectivity and things like that is super useful. It really works.
It's easy to mimic other established paradigms and it may be good too. It has some value. But I think in terms of where we are as an industry we could look it at it and say 'do we want to do that? Do we have to organise ourselves that way because Hollywood organised that way or because IBM organised itself that way? I think we should always be asking those questions and figure out which way we go and it's not even necessarily 'I should organise myself like Valve' if that's not your answer. But we're such a young-ish industry, we're like the movie industry in the 1920s, so we should always be asking ourselves the best way to put ourselves together, and how we function and we get content out to customers.
"We're bad predictors, we're just terrible"
But the established guys? My guess is they will be thinking about these things, that's why I gave my keynote, it's kind of poking at them, 'you should think about this, maybe it's better for you?'
Q: Greenlight is the latest development, but what have been some of the biggest surprise to the way Steam has evolved that you couldn't have predicted when it launched nearly nine years ago?
Jason Holtman: Almost everything! We're bad predictors, we're just terrible. Because we'll build the next thing and look at data and look at what customers want, so I think you know the hopefulness of do we have, for instance, robust things that help games like matchmaking, sure. And I guess we could have predicted that, if you're going to have a platform those things make a lot of sense.
Things like Workshop? I don't know if you ever could have predicted Workshop. Because Workshop didn't come from some mandate about 'this should be something you put in a platform.' Workshop came from a game problem, and then all of a sudden we were scratching our heads after TF2 and we were like 'that could be a neat Steam thing, we've got cloud and let's hook this up.' I think we get really surprised at what it is we're building. And when we're building it too.
There are things that I would, six years ago, say 'that's a thing that's going to come out next year' and we still haven't built it yet, because the time's not right or customers really don't want it enough. So we get constantly surprised by what we've built, what it is and what we're building next.
Q: Are you surprised that you don't have more competition by now? Obviously there are other platforms like Origin...
Jason Holtman: This is a space that lots of folks are thinking about. I mean see EA doing Origin, you can see the App Store, this is kind of an obvious thing to do. But it's a hard thing to do. Because it's to having a store, it's not have a portal, it's not having a website. It's not none of it, but it's way harder than that. So I think there's a lot of good, healthy competition out there, and we know it's out there all the time. But we don't really see the world as like 'what are our other business competitions?'
If anything we see competition as what are customers going to want now? Because it actually doesn't matter how many people are in your competitive space, whose making something like you. What actually matter is did you build the thing that next year all of the customers are still going to want to use. That's the real competition. It's not the sideways 'what did these guys just ship over here?' It doesn't actually help and that can actually be super distracting, it's much better to look back in and be like 'customer, what do you want?' And that's how we tend to think about what to build next, rather than competitors around us we tend to look forward and say 'gosh I hope I can please you next year. I hope I don't mess this up!'
Q: So it's all about retention?
Jason Holtman: They can always leave. That's the thing, if you're going to build openly and have something that's valuable, you have to keep pleasing folks.
Q: Have you felt the effect of Origin more recently? There was the business with exclusives not so long ago, and they've done a big push on it.
"If Origin can make millions of people happy too, awesome"
Jason Holtman: We've noticed that Origin is there. I think there's no discernible like 'there's a bump or there's market share going' and again, we don't even think that way too much. So to us our business is still growing, our customers are still super happy, they still like doing what they do, our partners bringing us the content we put out are still super happy, so we haven't noticed any changes in that happiness, building the right thing feature, we haven't noticed any difference.
If Origin can make millions of people happy too, awesome.
Q: And as digital distributors what are your thoughts on the latest EU ruling on the resale of downloaded games?
Jason Holtman: We're aware of it. We're not planning on changing anything.
Q: You recently added an economist to the team. Could you explain a bit more about his role at Valve?
Jason Holtman: Yanis is super interesting. So we have an economist now, and we're treating him like any other employee so he's kind of going between game teams. There are places where he makes a lot sense and can add a bunch of value right away, but he really is like sitting with folks, working across teams, working on game problems. He's not like an abstract filter where he's looking at data mining and coming out with reports for us, he's sitting right along with us, and people are looking at him and going 'what about the flamethrower' and he'll help us look through the lens at it. He's teaching us a tonne about economic theory and economic theory so that we can use it. not for simple pricing and things like that, although you could, but actually as a way of understanding how human beings make choices. because economists can think about things and help predict and make hypotheticals or formulas that make you think about things differently, that engineers can't do. Or business people can't do.
it's just this extra lens and you can immediately tell when he landed in a group or he came to valve because people were just like sponges. They were like 'teach me how to do that' and 'how are you thinking like that?' So I think that's been one of his biggest contributions, that people sort of gather around him and try to figure out how he's thinking about things and how he can teach us things so we can make better products. At the end of the day it's what it's all about. So we can understand what's happening in our Steam game ecosystems and economy. It's fascinating.
"When you can find really smart people in different disciplines they usually always pay off"
When you can find really smart people in different disciplines they usually always pay off. Because they'll teach you new things, they'll broaden how you can think about about a problem. And then they can help too. I'm dead honest when I say he's not there just studying data, he's helping us make games, he's helping us figure out interesting things that the customers can do.
Q: Finally, at the moment the industry seems to be at a critical point when it comes to pricing and business models and the way people buy and consume games. What are your thoughts on it and what do you expect to see in the next couple of years?
Jason Holtman: I think there are some really interesting things going on. I think a lot of the hand wringing that's going on is only because there might be certain things that were easy and well known that we built structures about, that don't work quite as well. But I don't necessarily think they're all going to get replaced, like there's a big revolution on and we're going to burn down the house of state and oh my gosh, customers are only going to want free-to-play, they're never going to pay for anything and microtransactions... No! I don't think so.
People still like cash. They'll go to stores and buys things, retail is not going to die. It's not like single player is going to die, go back two years and you're a game company and you're trying to predict the smart thing to build, it's got to be multiplayer, and this and this, and all of a sudden you have Skyrim come out. Full price, triple A game, single player. Have at it. Supposedly if you would have listened to analysts that's not the game to build. It was exactly the right game to build.
So I think you're going to have, in terms of pricing and retail and games getting built my prediction is more different kinds of things will get built. And the peoplw who are going to succeed are the people that understand how to build all of those. You should understand how to build a free-to-play and why you build it. And if you're not going to be good at building a free-to-play, if you don't understand why that works and why customers like that, don't build it. It's like chasing the MMO model because Blizzard did it. There are corpses littered on that old trail, and the same things could happen here. Try to build because you think you should build a social game, or free-to-play or whatever seems to be hot. I think you've got to fundamentally say 'why am I doing that?'
It'll be interesting to see do people make more money because games start costing $30 or $40? Maybe games, and nobody talks about this, but maybe games get more expensive? Maybe what's actually happening is that we're figuring out ways people can be better fans? There's probably tonnes of fans out there that would gladly pay, not because you're restricting it or doing something fancy, but because they're like 'I want to find a way to give you $100.' If you had the opportunity to go to your best band and you knew a ticket cost $30 and there was some opportunity to give that band $150 to do something you really wanted to do, you would do it in a heartbeat. So maybe we'll figure those things out too.
There's lots of interesting things going on about customers and prices and styles, but I think it's going to end up that you're going to get a little bit of everything.
I think the other thing that's happening in general is that content production is becoming more egalitarian. It's actually becoming easier to be what we think of as an indie. Indies might be awfully big pretty soon. It's not just about sitting down on a couch and getting funding and you've got to get it in a box and it's got to be that price, a lot of those things have gone away, the 'got tos'. It's way interesting that a broader variety of people can make games than before, and have success at it.