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Businesses The Almighty Buck Games

Valve Beats Google, Apple For Profits Per Employee 194

Posted by Soulskill from the are-we-supposed-to-call-them-an-evil-empire-yet dept.
AndrewGOO9 writes "It should come with little surprise that Gabe Newell is well on his way to being one of the wealthiest men in gaming. In an age when console gamers would have many believe that the PC was on its way out the door, Newell and Valve's Steam stand as sentinels of the platform, offering a ridiculous amount of content to the 30 million users. With the lion's share of the downloadable market on the PC, it's no wonder that Steam has become the go-to for many and an incredible financial opportunity for Newell and Valve. According to Forbes, 'Newell says that, per employee, Valve is more profitable than Google and Apple. A potential buyer was rumored to have made an acquisition offer a few years back for the Steam piece only, but Newell supposedly refused to split the online storefront from Valve's game-publishing arm.'"
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Valve Beats Google, Apple For Profits Per Employee More

Valve Beats Google, Apple For Profits Per Employee

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  • If they're so profitable, then where's my linux client, damnit!?

    • Re:If they're so profitable (Score:5, Insightful)

      by SudoGhost ( 1779150 ) on Thursday February 17, 2011 @04:31AM (#35229752)
      No point in having a Linux client when most people use Windows, and even a large section of Linux users dual-boot into Windows for gaming anyways. In the gaming market, Linux isn't profitable.

      • a large section of Linux users dual-boot into Windows for gaming anyways.

        [citation needed] and I don't know many Linux users who do.

        In the gaming market, Linux isn't profitable.

        http://2dboy.com/2009/02/12/world-of-goo-linux-version-is-ready/ [2dboy.com]
        http://2dboy.com/2009/10/26/pay-what-you-want-birthday-sale-wrap-up/ [2dboy.com]

        • Re: (Score:2)

          by kwenf ( 1531623 )

          [citation needed] and I don't know many Linux users who do.

          What I think he meant was "it's the only option linux users have".

          http://2dboy.com/2009/02/12/world-of-goo-linux-version-is-ready/ [2dboy.com]
          http://2dboy.com/2009/10/26/pay-what-you-want-birthday-sale-wrap-up/ [2dboy.com]

          To be fair those numbers were inflated by people who wanted to show that a game on linux can be profitable.

          • Re: (Score:2)

            by c0lo ( 1497653 )

            [citation needed] and I don't know many Linux users who do.

            What I think he meant was "it's the only option linux users have".

            Huh? The only? [winehq.org]

            http://2dboy.com/2009/02/12/world-of-goo-linux-version-is-ready/ [2dboy.com] http://2dboy.com/2009/10/26/pay-what-you-want-birthday-sale-wrap-up/ [2dboy.com]

            To be fair those numbers were inflated by people who wanted to show that a game on linux can be profitable.

            [citation needed]. And please DO your homework first

            • To be fair those numbers were inflated by people who wanted to show that a game on linux can be profitable.

              [citation needed]. And please DO your homework first

              I don't know if any formal study has been done (and I'm certainly not interested enough to conduct one myself), but even as a Linux user I think it's a fairly safe (albeit unsupported at this time) assumption to say that the GP is right. At the time, I also remember seeing people encouraging others to be generous just so developers would hopefully start to see Linux as a significant market for games. Ditto for humble bundle.

        • Re: (Score:2)

          by mwvdlee ( 775178 )

          [citation needed] and I don't know many Linux users who do.

          Equally [citation needed]

          http://2dboy.com/2009/02/12/world-of-goo-linux-version-is-ready/ [2dboy.com]
          http://2dboy.com/2009/10/26/pay-what-you-want-birthday-sale-wrap-up/ [2dboy.com]

          Annecdotal evidence, so still [citation needed].

          Two can play that game (and on Linux too, coincidentally).

        • Re: (Score:3, Interesting)

          by Ben4jammin ( 1233084 )
          From Games Radar:

          Steam raked in nearly one billion dollars in 2010 (http://www.gamesradar.com/pc/call-of-duty-black-ops/news/steam-raked-in-nearly-one-billion-dollars-in-2010/a-2011020485712484007/g-20100430155446363032)

          What are the sales figures for the whopping 2 games you linked?

        • Re: (Score:3)

          by MogNuts ( 97512 )

          I always love when people throw out strawmen.

          5 casual games on Linux does not a market make. It would be *irresponsible* for any company who actually wants to make money to serve the Linux market for games.

        • In the gaming market, Linux isn't profitable.

          http://2dboy.com/2009/02/12/world-of-goo-linux-version-is-ready/ [2dboy.com]
          http://2dboy.com/2009/10/26/pay-what-you-want-birthday-sale-wrap-up/ [2dboy.com]

          Funny thing about that example. In his 2009 IGS keynote 2DBoy's Ron Carmel, speaking about World of Goo specifically, indicated that Linux ports aren't actually profitable by themselves, but the Linux community is so vocal whenever a major game is released on Linux, it can significantly boost sales on profitable platforms like Mac and PC.

    • Re:If they're so profitable (Score:5, Insightful)

      by tylersoze ( 789256 ) on Thursday February 17, 2011 @04:32AM (#35229754)

      Yeah, but that's exactly why they *are* profitable. ;)

    • Re:If they're so profitable (Score:5, Insightful)

      by L4t3r4lu5 ( 1216702 ) on Thursday February 17, 2011 @04:36AM (#35229774)
      A Linux client sounds amazing! You'll be able to buy all of those Windows Only games, see your disk space drop slowly while they download, then realise that the "Platinum" rating they get for WINE is actually rubbish and you spent £25 on something you can't use.

      Don't take this the wrong way; I gamed on Linux for over a year, fiddling with WINE config and game ini files to get the damn things to load, and it was Good. I learned a lot. However, much like you *can* run a diesel car on cooking oil, it's far more convenient to fill it up at a petrol station than to buy carton after carton of catering fat. Right now, it's more convenient to PC game on Windows than Linux, and Gabe knows this.

      • On my Mac (the horror! the horror!) I can log on, purchase and download the games that are released for Mac. I can even play them.

        The trick is that once the Steam client has been ported, each individual game developer chooses whether to invest money in porting their awesome creation to OSX.

        If Valve ported Steam to Linux, that would open a similar calculation for the developer. It would also mean that indie developers could develop on the Linux stack and sell their games to those who run Linux. Given careful

        • On my Mac (the horror! the horror!) I can log on, purchase and download the games that are released for Mac. I can even play them.

          The trick is that once the Steam client has been ported, each individual game developer chooses whether to invest money in porting their awesome creation to OSX.

          If Valve ported Steam to Linux, that would open a similar calculation for the developer. It would also mean that indie developers could develop on the Linux stack and sell their games to those who run Linux. Given careful selection of libraries, it's possible to run the same code on Linux, OSX and Windows. It would be sweet. But it depends on whether Valve thinks there would be enough money in the Linux market to pay for the development of a Linux client.

          You do realize that a Linux steam client would get some subset of ports OS X has. Which is just a _staaaaagering_ amount of software, let me tell you.
          Yay, you can download Altitude for Linux.... from Steam now, win...
          Some cheesy cross platform puzzle games, wooooo.

          There are lots (but not a high percentage of total PC software) of Mac ports outside of Steam. The Linux situation is more dire, so maybe Steam would give people wishing to target Linux something to focus on at least. Really though, Steam is

        • Re: (Score:2)

          by DavidTC ( 10147 )

          Developers already choose what platforms to run their game on. It has nothing to do with Steam. It has solely to do with the size of the platform and the ease of the port.

          I bet you can't find a single developer who decided to port their game to Mac because Steam is there. In fact, Valve itself didn't decided to port Half-life to Mac because Steam was there...it was the other way around, they decided to port Steam because they were already porting Half-life and other games on that engine.

          No one has ever sa

      • Right now, it's more convenient to PC game on Windows than Linux, and Gabe is helping to perpetuate this.

        FTFY..

        I have seen comments to the effect that Valve bugfix their own games to run better on WINE, not sure how true it is though.

        • Re: (Score:2)

          by Ihmhi ( 1206036 )

          He's a businessman. He's in it for the money, and maybe to have fun making games. (As far as I can tell from interviews and the like, he still actually enjoys that part.)

          The day that people would get Linux for a Linux-exclusive AAA title (like people bought 360s for Halo, or PS3s for MGS4) is the day that a Linux client is even a possibility.

          • The one guy I heard of that got a PS3 for MGS4 actually bought a HDTV and PS3 and then sold them all once he completed it.. then again that guy was a bit strange. We're not talking about exclusives here, we're talking about cross platform games. For any games that already have an OSX port, getting the actual games to run on Linux would take very little extra work. I think the existence of WINE is making it a pretty easy decision for them right now though.

            I bought an XBox recently. I certainly didn't do it f

      • Re: (Score:2)

        by Lumpy ( 12016 )

        I gamed on linux for 2 years.

        Problem is Loki went out of business and took linux gaming with them. Honestly, Linux is for real tasks like work, engineering, chemistry, design, etc... it's not a fisher price toy like Windows.

        I dont see many games that run on IBM mainframes or supercomputers.... Where is solitaire for WATSON?

        and honestly, THAT approach is what sill continue linux in the business world. No games = more professional to a Lot of executives.

    • Son, you don't make money by writing a lot of checks -- or a lot of Linux code, for that matter.

      • It's not Linux can't be profitable. It's that Linux doesn't have enough of a marketshare in the consumer market to make it worth Steam's efforts. Launching a Steam client means more than coding. It also means support as well. Valve is relatively a small company by Apple's or MS standards so adding personnel for a small number of users doesn't make a lot of business sense.
    • Steam runs fine under Wine, especially with the new webkit browser engine.

    • Employing people to work on that would reduce their profit per employee, and possibly their profit full stop.

  • One thing on the profitability per employee thing, at least with Apple the figure most likely includes retail employees as well. With the latest figures I could find and from my back of the envelope calculations Apple made 14 billion with about 50k employees, for a profit of roughly $280k/employee. Meanwhile valve made, according to the article $55 million on 250 employees, for a profit/employee of $220k. Right off the bat, unless Forbes is using different numbers than I am, you see a discrepancy. Furt

    • Re: (Score:3)

      by N1AK ( 864906 )

      Furthermore, if we limit the discussion to non-retail employees

      Which we would do why? It makes about as much sense as suggesting we limit the discussion to the number of African-American females (none), unless you're suggesting that Apple's retail employees work for free or apple should/could drop out of retail entirely.

      • No, you have to sort of separate out the retail from the non-retail aspects of Apple to get a fair comparison because Valve doesn't have any sort of real "retail" presence. To get truly accurate numbers you would have to suss out the profitability of the retail section vs. the rest of the company but those numbers aren't easy to come by as Apple doesn't really release figures in that granularity.

        • Re: (Score:2)

          by MrHanky ( 141717 )

          You mean, the numbers are only fair if Apple gets to win.

          • No, Apple may still very well lose that comparison, I actually don't give a shit as I don't hold any Apple stock(and obviously no share in Valve as its a privately held company), but if you are going to go and make claims like this then you should make the control variables be as close as possible.

            • Re: (Score:2)

              by Zenin ( 266666 )

              And arbitrarily cutting random classes of workers only distorts the very variables you are so worked up over.

              As a company, as a business model, as a management strategy, however you'd like to word it Valve unquestionably produces greater revenue and profits per human head used then Apple.

              The fact Apple chooses to use some of those heads for retail work is simply that; Their choice. And it's the entire point; Apple's business choices, including human resources, affect their profits and revenues per-capita.

              • Valve probably has part-time employees but their numbers are probably small. ie. an intern or receptionist, etc. Apple with a retail presence has a much larger amount of part-time employees. Incidentally Apple takes into account retail into their calculations. If you read any of their financial statements, they don't show number of employees. They use equivalent employee hours or something like that. Basically they divide the part time hours by 40 to figure out equivalent full-time and then add it to t

        • Valve doesn't have any retail employees because it doesn't need them, Apple does because it has to.

          You could argue the Apple could dump all of it's Apple Stores and just sell online or through 3rd Party retailers and thus reduce it's staff count but I believe the Apple Stores are as much as about Apples image as it is about direct sales and by dumping the Apple Stores would find it's harder to sell it's products at the premimum it does.

          Only time would tell whether the reduced head count would increase t
          • Actually overall revenue/head isn't all that useful a statistic no matter how you slice it. For example Apple could increase it's revenue per head by shedding it's retail business but overall revenue and profits, which at the end of the day are the true measures of success, would suffer. If you are going to compare revenue/head then you should make the comparison as close as possible.

            • Which you do by ignoring a large chunk of one companies' employees while still counting all of their revenue? That just seems like a number intentionally biased in the other direction. If we discount all their retail employees, shouldn't we also be discounting all revenue from sales via Apple's first party retail outlets (read: Apple Stores),

              • I actually said that...... but it's actually difficult to do as Apple doesn't release a whole lot of information other than the basics(revenue, profit etc)

        • Re: (Score:2)

          by GauteL ( 29207 )

          Profit per employee is a ridiculous measure to go by anyway. Consider two otherwise identical companies, where one of them decides to outsource their manufacturing and retail arms to third parties. This company now may now have a massively larger profit per employee than the other company, but they may well have missed out on a lot of profit (which are now swallowed up by the retailers and manufacturers).

          Also, only trying to increase your profit per employee would be ridiculous. Consider a 500 employee comp

          • Re: (Score:2)

            by JTsyo ( 1338447 )
            No one is going to argue that this is a useful statistic. Also consider that a lot of Steam sales are just Valve selling games from other developers.

          • Profit per employee is a ridiculous measure to go by anyway.

            Exactly. I'd rather work for a company that pays me more, which in turn lowers their profit-per-employee metric.

    • Re: (Score:3)

      by romiz ( 757548 )
      You're missing something. In TFA, the $55 million profit is the 2005 value. As Valve is privately owned, it does not give any information regarding its profit to the public, which means that no-one really knows how much profit it did last year. But probably more than $55 million, if we do your math in reverse.
    • Your comparing 2010 (2009?) Apple profit with Valve's 2005 profit, you need to read the article more carefully. Vavle is likely making in the $250m/750 range at present.

      Apple made less than 2B in 2005 profit [apple.com], so you're off by about 12-13B.
  • By not having to pay for a real person to talk to when you have a problem, they save a bundle on paying for tech support. It's email only and it usually takes 24 hours to get a response. There is no number to call or any way to talk to a live person. For a company that was supposed to have made a billion dollars in revenue last year, I have to assume that some of that was profit. They really need to put some of that profit into live tech support.

    • Re: (Score:2)

      by gl4ss ( 559668 )

      but still, steam works fine. there's some aspects to it that make you want to grab crack releases still though, random offline playing as main culprit.

      but how could they spin off game development when in practice they've lately done about as much of it as 3d realms in '02.

      • Huh? They've got L4D2, still relatively recent, they have even more TF2 updates, and Portal 2 coming out in a few weeks. Sure, Episode 3 is still barely more than a rumor, but it certainly doesn't seem like "hasn't made a game in four years" is an apt description.
  • Somewhere out there is a featherweight considered the best pound-for-pound fighter in the world. Doesn't mean in a straight fight he wouldn't get killed by the best heavyweight.

    • Re: (Score:2)

      by Barny ( 103770 )

      No, but if you cut all the extra mass from the heavyweight it would become a much easier fight for the featherweight...

  • When GM was struggling to hold the fort against the onslaught of econoboxes in the 1990s, the MBA suites came up with a metric that showed Cadillac had the best mileage of all the cars in the market. The metric was Miles Per Gallon Per cubic foot of space. Oh yeah, you could always find some metric that looks impressive but it does not mean much.

    This is particularly true of intensive properties compared to extensive properties. The sewing needle creates more pressure than the sheet metal bending machines,

  • all of the hard-corps PC nerds thought that Steam was the key to all evil? "I won't own the discs! I have to be on the internet to play? They can get my credit card information?"

    I LOL and LOL and LOL, and play more TF2.

  • The best thing about Steam (and all Windows apps should pay attention) is that it stays out of my way. I don't even know it's running in the background. It doesn't bog my system down, it doesn't tie up bandwidth when I'm not actively using it, and it's not constantly bugging me for updates/reboots, etc.

  • Is not hiring people and pocketing the vast profits whilst millions of workers are unemployed something to be admired now?

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