VALVE CORPORATION is an American video game developer and digital
distribution company headquartered in Bellevue , Washington . The
company is known for the _
Half-Life _, _
Counter-Strike _, _
Day of Defeat _, _
Team Fortress _, _
Left 4 Dead
Left 4 Dead _, and _
Dota 2 _
games, and its software distribution platform Steam .
Valve was founded in 1996 as a limited liability company by former
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 2004, Valve launched Steam alongside
the critically acclaimed _
Half-Life 2 _. By 2011, over half of digital
PC game sales were through Steam, and Valve was 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 prebuilt
gaming computers running
SteamOS , a Valve-developed fork of the
Debian operating system .
* 1 History
* 1.1 Founding and incorporation
* 1.2 _Half-Life_
* 1.3 Source game engine
* 1.4 Acquisitions and awards
* 1.5 Network intrusions
* 2 Games
* 2.1 Cancelled games
* 3 Steam
* 4 Other projects
* 4.1 PowerPlay
* 4.2 Steam Machine
* 4.3 Pipeline
J. J. Abrams collaboration
* 5 Finances
* 6 Organizational structure
* 7 Legal disputes
* 7.1 _
Valve Corporation v. Vivendi Universal Games_
* 7.2 _
Valve Corporation v. Activision Blizzard_
* 7.3 _Dota_ intellectual property ownership
* 7.4 _ACCC v. Valve Corporation_
* 7.5 _
UFC Que Choisir v. Valve Corporation_
* 7.6 _A.M. v. Valve Corporation_
* 7.7 Skins gambling
* 8 "Valve Time"
* 9 References
* 10 External links
FOUNDING AND INCORPORATION
Valve was founded by former longtime
Microsoft employees Gabe Newell
Mike Harrington on August 24, 1996, as Valve L.L.C., based in
Kirkland, Washington on the Seattle Eastside . Harrington left the
company in 2000. After incorporation in April 2003, it moved from its
original location to Bellevue, Washington, the same city in which
their original publisher, Sierra On-Line , Inc., was based. In 2010,
the office was moved again to a larger location in Bellevue. In 2016,
Valve signed a nine-floor lease in the Lincoln Square complex in
downtown Bellevue, doubling the size of their offices.
Half-Life (video game)
After securing a license to the _Quake_ engine through the help of
Michael Abrash of id Software in late 1996, Newell and
Harrington began working on _
Half-Life _. Originally planned for
release in late 1997, _Half-Life_ launched on November 19, 1998. Valve
acquired TF Software Pty. Ltd., the makers of the _
Team Fortress _ mod
for _Quake _, in May 1998 with the intent to create a standalone _Team
Fortress_ game. The _
Team Fortress Classic _ mod , essentially a port
of the original _Team Fortress_ mod for _Quake_, was released for
_Half-Life_ in 1999. Gearbox contributed much after the release of
Gearbox Software is responsible for the _Half-Life_
expansion packs, _Half-Life: Opposing Force _ and _Half-Life: Blue
Shift _, along with the home console versions of _Half-Life_ for the
PlayStation 2 which included a third expansion
pack called _Half-Life: Decay _, which enabled two-player split-screen
SOURCE GAME ENGINE
Source (game engine)
After the success of _Half-Life_, the team worked on mods, spin-offs
, and sequels , including _
Half-Life 2 _. All current Valve games are
built on its Source engine. The company has developed six game series:
_Half-Life_, _Team Fortress_, _
Portal _, _
Counter-Strike _, _Left 4
Dead _ and _
Day of Defeat _. Valve is noted for its support of its
games' modding community, most prominently, _Counter-Strike_, _Team
Fortress_, and _Day of Defeat_. Valve has branched out with this
tradition to continue developing _
Dota 2 _ as the standalone sequel to
Warcraft III _ mod. Each of these games began as a third-party
mod that Valve purchased and developed into a full game. They also
distribute community mods on Steam . Valve announced the Source 2
engine in March 2015, later porting the entirety of _Dota 2_ to the
engine in September of that year.
ACQUISITIONS AND AWARDS
Valve has grown both in scope and commercial value. On January 10,
2008, Valve announced the acquisition of
Turtle Rock Studios . On
April 8, 2010, Valve won _
The Escapist Magazine '_s March Mayhem
tournament for the best developer of 2010, beating out _
Zynga _ in
the semi-finals and _
BioWare _ in the final.
In 2012, the company acquired Star Filled Studios, a two-man gaming
company to open a San Francisco office. In August 2013, however,
Valve ended the operation when it was decided that there was little
benefit coming from the arrangement.
Valve's internal network has been infiltrated by hackers three times,
in 2003 where content of the yet to be released _
Half-Life 2_ was
leaked onto the internet, Newell's email account was compromised, and
keyloggers were installed on several Valve systems. In 2011 the Steam
customer databases and official forums were compromised. In
September 2011, a hacker broke into the network and downloaded the yet
to be released beta code of _Call of Duty: Modern Warfare 3 _.
In June 2014, a developer from
SCS Software reported an exploit that
allowed announcement pages to be injected with code, and after no
response, he edited an announcement to redirect users to a Harlem
Shake video. In March 2016, a vulnerability on the Steam Store
allowed a user to publish a game without any authorization from Valve.
List of Valve Corporation video games
Valve has developed and published the main games in both the
Half-Life _ and _
Portal _ series, as well as published both and
developed one of the _
Left 4 Dead
Left 4 Dead _ games, the other of which was
developed by Valve South (now
Turtle Rock Studios ). Valve also
developed and published _
Team Fortress _, _
Team Fortress 2 _, and
Dota 2 _.
As several of Valve's series feature only two primary games, named
with numerals such as _Half-Life_ and _
Half-Life 2_, and with no
apparent announcements on a third title in these series, Valve has
developed a lighthearted joking reputation for not being able to count
to 3, or scared of this number. This has also created a humorous
myth-like nature among players and journalists as to whether
Half-Life 3 _ actually exists or not.
Incomplete games include a fairy -themed role-playing game ,
_Prospero_ and _Stars of Blood_.
Valve worked with
Arkane Studios on _The Crossing _, which was
cancelled in May 2009. Arkane later tried to produce _Return to
Ravenholm_ (a.k.a. _
Half-Life 2: Episode Four_) without consensus by
Valve, which was then also canceled.
Gabe Newell (foreground) and
Doug Lombardi (background), 2007
Valve announced its games platform Steam in 2002. At the time it
looked to be merely a method of streamlining the patch process common
in online video games , but was later revealed as a replacement for
much of the framework of the
World Opponent Network service and also
as a distribution and digital rights management system for entire
On August 1, 2012, Valve announced revisions to the Steam Subscriber
Agreement (SSA) to prohibit class action lawsuits by users against the
service provider. By July 2014, there were over 3,400 games
available on Steam, and the platform had surpassed 75 million active
user accounts by January 2014.
Alongside these changes to the SSA, the company also declared
publicly the incorporation of Valve S.a.r.l. , a subsidiary based in
Luxembourg . Valve set up a physical office in
According to Valve's project manager Mike Dunkle, the location was
chosen for eCommerce capabilities and infrastructure, talent
acquisition, tax advantages and central geographic location – most
major partners are accessible, with 50% within driving distance.
Valve S.a.r.l. was used to sell games to United Kingdom–based users
to avoid paying the full 20% VAT . The tax loophole was expected to
be closed on January 1, 2015. In December 2015, the French consumer
UFC Que Choisir initiated a lawsuit against Valve for several of
their Steam policies that conflict or run afoul of French law. One of
the reasons was for using the tax loophole. Valve S.a.r.l. stopped
doing business on January 1, 2017, with the main company taking over
EU sales again.
In August 2017, Valve announced that Steam had reached over 67
million monthly and 33 million daily active players on the platform.
PowerPlay was a technological initiative headed by Valve and Cisco
Systems to decrease the latency for online computer games. Gabe
Newell, the managing director of Valve, announced the project in
January 2000 and after 12 months the project was quietly abandoned.
PowerPlay was described as a set of protocols and deployment
standards at the router level to improve performance. It was claimed
that a player with 1000 ms ping was able to play against another
player on a LAN connection with no noticeable disadvantage. Initially
the protocol was to be released with PowerPlay 1.0 focusing on Quality
of Service (QoS) and later a revision, PowerPlay 2.0 that would focus
on functionality. Cisco and Valve intended to deliver a single dial-up
service in Q1 2000 in the United States with a 30-day free trial with
a bundled copy of _
Team Fortress _ modified to support PowerPlay.
Despite never deploying the dial-up plan featuring PowerPlay 1.0,
Valve announced in January 2001 that the standard had indeed been
The standard was to involve purchasing PowerPlay approved Cisco
hardware and infrastructure that had adequate bandwidth and QoS
standards that prioritize PowerPlay gaming packets at the expense of
Gabe Newell conceded that Internet service providers
(ISPs) would bear the brunt of this expense: "The ISPs are going to
need to spend a fair amount of money to be compliant with PowerPlay.
But how they get that back is up to them. Some will have a tiered
service, and some will just try to recoup their investment through
reduced customer churn and customer acquisition."
Steam Machine (hardware platform)
Newell has been critical of the direction that
Microsoft has taken
with the Windows operating system in making it a closed architecture
similar to Apple's products, and has stated that he believes that the
changes made in Windows 8 are "a catastrophe for everyone in the PC
space". Newell identified the open-source Linux platform as an ideal
platform for Steam, noting that the only thing holding back its
adoption is the lack of games.
In 2012, Valve announced that they were working on a console/PC
hybrid for the living room which was unofficially dubbed by media as
the "Steam Box". A precursor to such a unit is SteamOS, a freely
available Linux-based operating system that builds upon the Steam
client functionality that includes media services, live streaming
across home networks, game sharing within families, and parental
SteamOS was officially announced in September 2013 as the
first of several announcements related to the Steam Machine platform
as well as their unique game controller. In May 2014, Valve announced
that the company's own SteamOS-powered Steam Machine would be delayed
until 2015 due to problems with the game controller.
In July 2013, Valve announced Pipeline, an intern project consisting
of ten high school students working together to learn how to create
video game content. Pipeline serves to discuss and answer questions
that teenagers often ask about the video game industry, and see if it
is possible to train a group of teenagers with minimal work experience
to work for a company like Valve. The latter purpose breaks Valve's
tradition of employing experienced developers, as the company is not
good at "teaching people straight out of school".
J. J. ABRAMS COLLABORATION
At the 2013
D.I.C.E. Summit ,
Gabe Newell confirmed that he and
J. J. Abrams were collaborating to produce a _Half-Life_ or
_Portal_ film, as well as a possible new game.
In March 2015, Valve and Taiwanese electronics company
a joint project to develop the Vive , a virtual reality headset with
motion tracked controllers. The companies are working with
Lions Gate , and
HBO to develop content for the device.
Valve does not make its finances public. In 2005, _
Forbes _ estimated
that Valve had grossed $70 million that year. Ed Barton, a Screen
Digest analyst, estimated Valve's 2010 revenue to be in the "high
hundreds of millions of dollars". As of 2011, the company had an
estimated worth of $2 to 4 billion, and according to Newell it was the
most profitable company per employee in the United States. Most of
Valve's revenue comes from its Steam service, which controls 50 to 70%
of the market for downloaded PC games.
In Valve's early days, the company's structure was similar to other
development firms; this was principally driven by the nature of
physical game releases through publishers that required tasks to be
completed by given deadlines, requiring a more regimented structure.
As the company moved to digital releases where they serve as their own
publisher, the company structure has become more as a flat
organization . Valve published their employee handbook to the public
in 2012, demonstrating at that time that outside of executive
management, there were no bosses, and the company used an open
allocation system, allowing employees to move between departments at
will. This approach allows employees to work on whatever interests
them, but requires them to take ownership of their product and
mistakes they may make, according to Newell. Newell recognized that
this structure works well for some but that "there are plenty of great
developers for whom this is a terrible place to work".
Yanis Varoufakis , a former economic consultant for Valve,
and former Finance Minister of
Greece , attempted to place Valve's
organization in the context of theories of the firm and broader
economic thinking. Former employee
Jeri Ellsworth has, however,
criticized the structure as "a lot like high school", where while the
structure is flat, certain people within the company nevertheless have
more say in decisions than others.
_VALVE CORPORATION V. VIVENDI UNIVERSAL GAMES_
Between 2002 and 2005, Valve was involved in a complex legal dispute
with its publisher,
Vivendi Universal Games (under Vivendi's brand
Sierra Entertainment ). It officially began on August 14, 2002, when
Valve sued Sierra for copyright infringement , alleging that the
publisher had illegally distributed copies of their games to Internet
cafes . They later added claims of breach of contract , accusing their
publisher of withholding royalties and delaying the release of
_Counter-Strike: Condition Zero _ until after the holiday season.
Vivendi fought back, saying that
Gabe Newell and marketing director
Doug Lombardi had misrepresented Valve's position in meetings with the
publisher. Vivendi later countersued, claiming that Valve's Steam
content distribution system attempted to circumvent their publishing
agreement. Vivendi sought intellectual property rights to _Half-Life_
and a ruling preventing Valve from using Steam to distribute
On November 29, 2004, Judge
Thomas Samuel Zilly of the U.S. District
Court for the Western District of Washington ruled in favor of Valve.
Specifically, the ruling stated that Vivendi Universal and its
affiliates (including Sierra) were not authorized to distribute Valve
games, either directly or indirectly, through cyber cafés to end
users for pay-to-play activities pursuant to the parties' publishing
agreement. In addition, Judge Zilly ruled that Valve could recover
copyright damages for infringements without regard to the publishing
agreement's limitation of liability clause. Valve posted on the Steam
website that the two companies had come to a settlement in court on
April 29, 2005.
Electronic Arts announced on July 18, 2005, that they
would be teaming up with Valve in a multi-year deal to distribute
their games, replacing Vivendi Universal from then onwards. As a
result of the trial, the arbitrator also awarded Valve $2,391,932.
_VALVE CORPORATION V. ACTIVISION BLIZZARD_
In April 2009, Valve sued
Activision Blizzard , which acquired Sierra
Entertainment after a merger with its parent company, Vivendi
Universal Games . Activision had allegedly refused to honor the _Valve
v. Vivendi_ arbitration agreement. Activision had only paid Valve
$1,967,796 of the $2,391,932 award, refusing to pay the remaining
$424,136, claiming it had overpaid that sum in the past years.
_DOTA_ INTELLECTUAL PROPERTY OWNERSHIP
Defense of the Ancients _ (DotA) was a landmark mod built in 2003
that created the basis of the genre of multiplayer online battle arena
(MOBA). It was originally developed by "Eul" within Blizzard
Entertainment 's _
Warcraft III _ via its world editor , and spawned
several similar efforts, notably _DotA-Allstars_. While there have
been several that contributed to _DotA-Allstars_, the project was
managed primarily by
Steve Feak , aka "Guinsoo", and later by "IceFrog
IceFrog was eventually hired by Valve in 2009 and in 2010 reported
that they had sold their rights to the _DotA_ property to Valve. Eul
was also hired into Valve by 2010.
Valve subsequently filed trademarks towards a sequel to _DotA_, _Dota
2 _. DotA-Allstars, LLC, a group of former contributors to the
_DotA-Allstars_ project, filed an opposing trademark in August 2010 to
contest Valve's claim it owned the property rights. DotA-Allstars,
LLC was eventually acquired by Blizzard to start development of
_Blizzard All-Stars_. Blizzard took over the trademark challenge. The
United States Patent Valve retained the right to use _Dota_
commercially, while Blizzard reserved the right for fans to use _Dota_
non-commercially. Blizzard changed the names of its own projects to
remove the _Dota_ term, and renamed _Blizzard All-Stars_ as _Heroes of
the Storm _. Valve's _Dota 2_ was released in 2013.
In 2014, mobile developers Lilith and uCool released their titles
_Dota Legends_ and _Heroes Charge_, respectively. Both titles were
influenced by _Dota_ and the sequels. In 2017, Valve and Blizzard took
joint action against these companies, citing copyright issues related
to the _Dota_ names. uCool argued that the _Dota_ games were a
collective work and could not be copyrighted by anyone in particular,
but the presiding judge,
Charles R. Breyer , felt that due to the
trio's actions as maintainers of the _Dota_ mods, that they rightful
have copyright claim to this. Separately, Lilith and uCool argued that
Eul had, in a forum post dated September 2004, assigned an open-source
copyright license to _Dota_, which would make Valve and Blizzard's
copyright claims void. The case is scheduled to be heard by a jury to
resolve this matter at a later date.
_ACCC V. VALVE CORPORATION_
Australian Competition and Consumer Commission (ACCC) announced
it was taking action against Valve in 2014. On March 29, 2016 Valve
was found guilty of breaching Australian consumer law because:
* Valve claimed consumers were not entitled to a refund for
digitally downloaded games purchased from Valve via the Steam website
or Steam Client (in any circumstances);
* Valve had excluded statutory guarantees and/or warranties that
goods would be of acceptable quality; and
* Valve had restricted or modified statutory guarantees and/or
warranties of acceptable quality.
During the prosecution of this case, Valve implemented a refund
policy for Steam purchases, but the case still reviewed Valve's
actions prior to the onset of the lawsuit. The court overseeing the
case sided with the ACCC in assigning a A$ 3 million (about 2.1
million USD) fine against Valve in December 2016, as well as requiring
Valve to inform Australian consumers of their rights when purchasing
games from Steam.
_UFC QUE CHOISIR V. VALVE CORPORATION_
Consumer rights group
UFC Que Choisir , based in France, filed a
lawsuit against Valve in December 2015, claiming users should be able
to resell their software.
_A.M. V. VALVE CORPORATION_
A former employee filed a $3.1 million lawsuit in May 2016 alleging
mistreatment after sex reassignment surgery, and that Valve was
Valve was named as a defendant in two lawsuits in June and July 2016
related to third-party gambling sites that use the Steamworks API to
allow betting with the virtual currency of cosmetic weapon "skins"
from _Counter-Strike: Global Offensive _, which through these sites
can be converted from or to real-world money. Both suits assert Valve
aiding in underaged gambling . Valve subsequently stated it has no
commercial ties with these sites, and that it would demand these sites
cease their use of the Steamworks API as they violate the authorized
use policies. In October 2016, the Washington State Gambling
Commission required Valve to stop the use of virtual skins for
gambling on Steam, stating they would face legal repercussions if they
failed to cooperate. Valve sent a letter on October 17, 2016 to the
Gambling Commission stating, "Valve has no business
relationship with such gambling sites, and indeed they can come into
existence, operate, and go out of existence without Valve's knowledge"
and that "We are not aware of any such law that Steam or our games are
In February 2017, the
European Commission began investigating Valve
and five publishers—
Bandai Namco Entertainment ,
Capcom , Focus Home
Koch Media and
ZeniMax Media —for anti-competitive
practices, specifically the use of geo-blocking through the Steam
storefront and Steam product keys to prevent access to software to
citizens of certain countries. Such practices would be against the
Digital Single Market initiative by the European Union.
"Valve Time" redirects here. It is not to be confused with Valve
"Valve Time" is an industry term used jokingly with game releases
from Valve, used to acknowledge the difference between the "promised"
date for released content stated by Valve and to the "actual" release
date; "Valve Time" includes predominant delays but also includes some
content that was released earlier than expected. Valve itself has
fully acknowledged the term, including tracking known discrepancies
between ideal and actual releases on their public development wiki
and using it in announcements about such delays. Valve ascribes
delays to their mentality of team-driven initiatives over corporate
deadlines to make sure they provide a high-quality product to their
Valve's former business development chief Jason Holtman stated that
the company sees themselves as an "oddity" in an industry that looks
towards punctual delivery of products; instead, Valve " as hard as we
can to make the best thing possible in the right time frame and get
people content they want to consume. And if that takes longer, that's
fine". For that, Valve takes the concept of "Valve Time" as a
compliment, and that "having customers consistently looking at our
property or something you've done and saying, can you give me more" is
evidence that they are making the right decisions with their game
releases, according to Holtman. The company does try to avoid
unintentional delays of their projects, and believes that the earlier
occurrences of "Valve Time" delays, primarily from _Half-Life_
development, has helped them improve their release schedules.
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