Posted on July 11, 2012, Ross Lincoln Valve Responds To EA’s Steam Dis, Wins Argument
Last month, David DeMartini, the man charged with running EA’s Steam competitor Origin, had some rather intemperate things to say about his rival’s business. Blasting Steam’s frequent, and awesome, discounts, DeMartini said “We won’t be doing that. Obviously they think it’s the right thing to do after a certain amount of time. I just think it cheapens your intellectual property.” He also compared Valve to a Big Box store, adding “We’re not trying to be Target. We’re trying to be Nordstrom.” OHBURN.
Valve has finally chosen to respond to DeMartini’s comments, and they all but demolish EA’s arguments. “Ask our partners,” Valve business development chief Jason Holtman said today at the Develop conference. “Ask the large to the small and see what they think about that. Putting it all in the bucket of, it’s all about the discounts, I don’t think that’s everything about it.”
Holtman defended Valve’s often cut-rate Steam deals, saying that “discounts serve a lot of functions. Highlighting serves a lot of functions. The qualities of the games serve a lot of functions. Everything we’ve seen, PC games and IP and all those franchises are more valuable today than they were four or five years ago.” Burn. But he continued, saying that “If this were all about a cheapening and somehow lessening the money out there or somehow customers don’t want to pay any more, they think everything should be like a used car lot – sticker price is not the real price – you’d feel that and you’d get real reinforcement of that. We don’t see any of that. We see people buying a lot and enjoying it and playing a lot.”
Holtman also pointed out the obvious: Valve puts their money where their mouth is, discounting their own games as often as other companies’ product. “We do it with our own games” he said. “If we thought having a 75 per cent sale on Portal 2 would cheapen Portal 2, we wouldn’t do it. We know there are all kinds of ways customers consume things, get value, come back, build franchises. We think lots of those things strengthen it.”
I’ll admit that I’m rather amused that EA compares Valve to Target while comparing themselves to Nordstrom. WHy not aim higher, EA? Compare yourselves to Sharper Image!
But continuing, obviously when I read EA’s original comments, I was forced to draw the cynical conclusion that EA didn’t poo-poo Valve and Steam because they’re particularly concerned with “cheapening” IP. After all, EA’s entire business is built on doing just that. No, I suspect EA wants to establish what sounds like a principled reason for not providing as
good affordable and varied a service as Valve does with Steam. Perhaps they’re also hoping to create some kind of buzz among developers, convince them that Steam is ripping them off.
But before EA gives business advice to Valve, I might suggest they pay close attention to a couple of things: