Valve Corporation Business Model | Business Model Navigator

Overview:

Valve Corporation is an American video game developer, publisher and digital distribution company headquartered in Bellevue, Washington. It is the developer of the software distribution platform Steam and the Half-Life, Counter-Strike, Portal, Day of Defeat, Team Fortress, Left 4 Dead, and Dota 2 games. Valve was founded in 1996 by former Microsoft employees Gabe Newell and Mike Harrington. Their debut product, the PC first-person shooter Half-Life, was released in 1998 to critical acclaim and commercial success, after which Harrington left the company. In 2003, Valve launched Steam, which accounted for around half of digital PC game sales by 2011. By 2012, Valve employed around 250 people and was reportedly worth over US$3 billion, making it the most profitable company per employee in the United States. In 2015, Valve entered the game hardware market with the Steam Machine, a line of third-party built gaming PCs running Valve's SteamOS operating system.

Industries:

Information Technology

Entertainment

Business Model Patterns:

Long Tail

How they do it: On Steam, Valve’s game publishing platform, users can download (for free) or purchase access to 781 million different games, as of 2018. This includes large blockbuster titles, as well as very obscure games published by hobbyists. Most distinctly, a large portion of all games published on the platform (or, as much as 450 million games) were never downloaded or played. In 2018, Steam introduced a $100 fee for publishing a game on its platform, to curb abuse of the system.

Open Business Model

How they do it: In addition to creating several award-winning games, Valve is also a developer of leading-edge technologies including the Source game engine and Steam, the premier online gaming platform. Valve permits game developers from all over the world to publish their games on the Steam platform, in exchange for 10 to 40 percent of the revenues.

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