Gabe Newell Talks about DRM and Piracy on Steam

In an interview with Penny Arcade, Gabe Newell expressed his thoughts on DRM and piracy with regards to Steam. Newell believes that customers shouldn’t be punished for the possibility that they will breach a game‘s terms of service, and that draconian DRM has no positive impact on sales. While he doesn’t want to enforce any kind of DRM protocols for games released on Steam, he does hope that developers should focus on creating value for customers rather than making their lives more difficult.

PA: There’s also this huge conversation going about used games and piracy. Do you feel like you’ve kind of successfully sidestepped those issues with Steam as a service provider?

Gabe Newell: I get fairly frustrated when I hear how the issue is framed in a lot of cases. To us it seems pretty obvious that people always want to treat it as a pricing issue, that people are doing this because they can get it for free and so we just need to create these draconian DRM systems or anti-piracy systems, and that just really doesn’t match up with the data.

As a customer, I want to be able to access my stuff wherever I am, and if you put in place a system that makes me wonder if I’ll be able to get it then you’ve significantly decreased the value of it. People were worried when we started using Steam initially because, oh my gosh, if I don’t have my discs what happens when I get a new machine? And after they’ve done this a couple times they’re like “oh my god, this is so much better, I’m so much more likely to lose my discs than I am to have any problem with my Steam account, that seems way better than having a physical token that I use to access my content.”

A lot of times the systems that are put in place to punish your evil customers for maybe doing something that’s not in their terms of service end up driving people towards service providers who don’t, right? So if I have to wait six months to get my Russian language translation when I can get at this other guy on the street to give me my Russian translation right away, it seems pretty obvious when you talk about it in those terms how the pirate selling pirated DVDs has a higher product than some of the people who try to DRM their way out of not giving customers what they really want.

PA: Have you ever been tempted to put a set of standards for DRM across games on Steam?

Gabe Newell: We tend to try to avoid being super dictatorial to either customers or partners. Recently I was in a meeting with a company that had a third party DRM solution, and we showed them, “Look; at this point in your life cycle your DRM got hacked, right? Now let’s look at the data; did your sales change at all? No, your sales didn’t change one bit. So here’s before and after, here’s where you have DRM that annoys your customers and causes huge numbers of support calls. In theory, you would think that you would see a huge drop off in sales after that got hacked, and instead there was absolutely no difference in sales before or after. You actually probably lost a whole bunch of sales as near as we can tell; here’s how much money you lost by bundling that with your product.”

We do that all the time. I wouldn’t be super happy if some other third party tried to tell me how to have relationships with our customers and I expect other people feel the same way, and I also tend to think that customers don’t really like it when you try to impose rigid rules on them as well, so we tend to think and hope that over time people will move towards doing the things that are in the best interests of both the customers and the content developers.

It’s a really bad idea to start off on the assumption that your customers are on the other side of some sort of battle with you. I really don’t think that is either accurate or a really good business strategy.

I think that we have a lot more credibility now with developers on issues like this simply because there’s so much data that we can show them where we say, “Look; we’ve run all of these experiments. This has been going on for many years now and we all can look at what the outcomes are and there are lots of compelling instances where giving customers a great experience and thinking of ways to create value for them is way more important than making it incredibly hard for the customers to move their products from one machine to another.

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8 Comments on Gabe Newell Talks about DRM and Piracy on Steam

Squire Zed

On February 20, 2012 at 4:57 pm

Steam does DRM well. Run a relatively slim program that gives you features you want (instead of locking away content within the game) in addition to the game- a voice chat client, a web browser overlay, etc. while in exchange locking games to be used only with this client. Is it perfect? Not really. But is it better than Ubisoft, Securom, and the other clowns? Yes.


On February 20, 2012 at 5:22 pm

I like steam as it’s actually helpful, and enjoyable to use. I don’t mind that it’s some form of DRM- it doesn’t feel like it is; it’s HELPED me buy stuff, and never gotten in the way. And I’ve never had problems with it (there was this one time… my printer stuffed up. Printing a recipt from Steam. Probably the printer, there).

Ubisoft’s DRM efforts by contrast have driven me away from their products far more thoroughly than anything else could have (except- wait for it- attacking my freedom of speech. Yes, anyone supporting SOPA did that. Ha. Ha. Ha. *shakes head*). Ubisoft hasn’t seen a sale to me in years- all thanks to them trying to get into my bedroom and STARE at me while I would play their games. You know what Ubisoft? that. YOU. I’m taking my money elsewhere. To VALVE and STEAM. Hear that? That’s the sound of cash registers for Steam pinging- with sales you could have had. But didn’t.


On February 20, 2012 at 8:48 pm

This is why Valve is the best Game Company.


On February 20, 2012 at 11:17 pm

The thing about Steam most people dont notice is it has DRM. You must be connected to the internet for Steam to start. If you aren’t (eg. when you have connection issues) you’re SOL. So gabe going on and on about no DRM is a farce.


On February 20, 2012 at 11:52 pm

@ PAL-18

Steam is a internet based tool since after all you do download all your video games from the internet BUT steam does provide a offline feature that you can turn on at any time, once that is on you can reboot or turn your computer off and back on and never have to deal with a internet connection to play your video games unless they include there own drm like assassins creed, the settlers 7 and many others.


On February 21, 2012 at 3:51 am

Steam is the only service that gives you infinite re-downloads of your content, offers a offline mode (varies with games, some have third party draconian drm which Valve has no control over), webchat with voip, community blogs, user forums, runs raffles frequently, discounts on a daily basis, supports F2P games, any development team is able to submit their games to be sold the service, cloud based saves, achievements, stat tracking, matchmaking, anti cheat, allows for distribution of tools like SDKs and server binaries, in-game item trades and game gifting.

And on top of all this they have alot developer side tools and features to allow developers to better serve the community sadly not all of em listen to Valve or the community.

While unlike EA and other services they won’t disable your account just because your were banned or suspended on their forums, even cheaters have second chances by simply being banned on a per server basis and being branded as a cheater publicly which enhances better compliance with the service itself as its a good cheating deterrent.


On February 21, 2012 at 4:13 am

On a extra note I use steam since December 2006 and have over 100 individual games over there, have yet to find else were that gives me better value for my games and no I’m not just someone random who just buys on sales either, and I used to be on the other side of the fence as far steam goes and since I crossed over haven’t looked back.

With anything anyone new would have a small learning curve using steam but its well worth it.

Valve doesn’t look at you as just a number on a spreadsheet or a pirate, they care that’s why they have all this data going around and sit down with publishers to better express where the community is at in order to provide a better service and publishers provide better games.

Its a service that grew because of a community – service trade off, loads of features have been implemented due to community feedback\requests.

Despite all the fat jokes and HL EP3 people have given Gabe over the years he’s still working his ass off to make Valve and STEAM better everyday.
I don’t think anyone else since early on had a “open services over paranoid product control” kind of mentality like he has, thanks to that and other people at Valve and the community that shares his ideas PC gaming and I think gaming in general has gotten better.


On February 21, 2012 at 5:21 pm

I like Steam. But I think Steam should have some kind of an offline timeout, like, if somehow I’m having a problem with my connection I can still play Steam games for few hours before I got cut off.