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Newell: Rise of closed platforms is "ominous"

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.

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Matthew Handrahan avatar

Matthew Handrahan


Matthew Handrahan joined GamesIndustry in 2011, bringing long-form feature-writing experience to the team as well as a deep understanding of the video game development business. He previously spent more than five years at award-winning magazine gamesTM.