How Valve runs a successful game business, hires people, and more

Here’s a long (long!) video interview with Gabe Newell, CEO of Valve (one of the biggest / most successful games companies).

(incidentally: this post is shorter than intended. Someone at WordPress considered it acceptable to DELETE your post if your login cookie timesout before you hit the save button. Completely the wrong way to build a blogging platform)

Listening to the long interview, I found him saying some very concise, pithy things about the games industry, and the roles of us working within it. Some of them are clearly at odds with the “corporate” messaging that typically comes out of the larger games companies. Personally, I have often railed against those corporate statements and shouted “don’t believe a word of it! read between the lines – this is a person with their own hidden agenda!”, so I was delighted to hear Gabe providing much more rational and intelligent messages.

I transcribed a few as I listened, as they resonated with a lot of the concepts I’ve tried to hilight on this blog and elsewhere.

Employer responsibility, and a culture of humanism

“You cant ruin people’s home lives to benefit the business
…
we’re not telling them to work on the weekends, but people are working on the weekends
…
those really are the things we worry about”

Contrast this with the issue that made me quit the IGDA:

Mike Capps (CEO of Epic Games) who claimed that: “working 60+ hours was expected at Epic, that they purposefully hired people they anticipated would work those kinds of hours, that this had nothing to do with exploitation of talent by management but was instead a part of “corporate culture,” and implied that the idea that people would work a mere 40 hours was kind of absurd.”

Even when doing a PR-interview to try and un-fuck the issue – supposedly on his best behaviour, trying to sound like a good guy – Mike Capps felt this excused his behaviour:

“My guys ask to crunch. They say, “Hey, we’re not crunching yet. What’s going on? Why isn’t everybody crunching? This is really serious!” That kind of stuff.”

No. Doesn’t stand. You can’t abrogate responsibilty – especially not when you’re an at-will employer in a country with employment law that gives employers many rights, but employees almost no rights at all.

Gabe’s language (whether or not Valve actually does this) is in the opposite, humane direction: at Valve they “worry about” this, and supposedly seek to stop the behaviour, not to work with it.

A real games “business” is self-funding, always

“we fund our own projects so I dont have to worry about how the bank or whoever feels about our business decisions … it makes it a lot simpler to run the business that way”

This is the most common recurring issue I see with good indie games companies that fail – they cannot (or “will not”) grasp the importance of the above statement.

(EDIT’d this section to be clearer; and, of course, this is all IMHO – I have no idea what Gabe/Valve thinks on this)

Read that carefully: it’s “a lot simpler to run the business”. That should be a wakeup call to all the studios that say “I’d love to work that way, but I can’t afford to”; I’d say: you can’t afford *not* to.

It’s generally accepted that *if* you get to that point in your studio lifecycle, you’ve got it “made”. In practice, that should be turned on its head: until you get to that point in your lifecycle, you’re heading towards failure.

Often they make excuses to themselves that it’s “not possible” to run this way, and accept it won’t happen, and then blithely go about their business.

Net result: their games get worse and worse, as their competitors pull away from them, and sooner or later they drop below the standard it takes to keep getting new projects, and BANG! studio goes under.

All digital products these days are an order of magnitude easier/cheaper to make than they were 15 years ago, ignoring the staff costs; service prices have plummeted (web hosting costs, software suite costs, etc). They’re at least an order cheaper/easier to launch and sell in the marketplace. If you’re a startup, you should find it trivial to get to self-funded project status – ignoring the staffing costs.

So. Compared to 15 years ago, you have two obvious routes to self-funding: get someone else to pay your staff costs, but move *very* quickly to where you don’t need their money (because otherwise you’ll have a hard time forever), or do what you can with the people you have (you, your co-founders, the goodwill you can get from ex-colleagues, etc). It’s not excusable to say “self-funding our projects is out of our reach” – this is simply not true. It may require some ingenuity – or it may simply prove that your business is non-viable (if your business plan is to out-do Zynga at their own game, for instance, you’ll probably find it’s just not possible. In that case, declaring “we’re starting off non-self-funding, and when we get our first hit game (like Zynga did), it’ll be easy from there” is just papering-over your hopeless business plan).

How to get a *good* job in the games industry

“the main characteristic we look for is the ability

• to create something
• develop an audience about it
• measure the reations to something you’ve created
• and then change what you’ve built to reflect that
• and measure again how much of a difference you made

”

Sound familiar?

If you’re serious about startups, it should do – it’s the path that http://venturehacks.com/ et al have been pushing startups along for the past 5 years. The best of the entrepreneurs are expected to live and breath this approach by now.

It’s not even rocket-science – a big part of it is nothing more or less than the Scientific Method, over a century old now, which has driven most of the world’s research. It works. It’s a pity that so many people ignore it.

If you want to be a game maker, then … make games

Partly responding to the oft-quoted fear “but how can I get experience making games, if the pre-requisite to joinging a game team is that I already have experience making games??”:

“iteration cycle with Customer Feedback is the most important characteristic for somebody to be successful right now, and ability to demonstrate that through a portfolio, through a website, through a mod

If you have learnt anything at all, if you have achieved anything, if you have any skill – then you can *always* demonstrate that, somehow. If not, then implicitly your achievement doesn’t exist – if you can’t show it, it’s not there. c.f. the section Marketing is a science, not an art, and read Sergio Zyman’s book if you need inspiration here.

Which matters more: credentials, or mindset?

Atttitude and approach wins, apparently:

“you have to actually act almost like a CEO yourself, in terms of understanding an audience, understanding a market, building a product, taking feedbakc about the product evolving the product communicating about the product
…
more than whether or not you go to an Ivy League school … or take CS classes … or drawing classes … that for us is the key indicator of future success
…
an awareness of what’s actually going on right now tends to trump a lot of previous experiences … I think it’s going to be harder and harder for people to stay current as the pace of things accelerates … get in front of instead of get behind any structural changes of an industry you’re going into
”

Don’t take a job you don’t want, to sneak into the one you were too crap to get

And, so important (and lied about so many times by journalists, HR departments, recruiters, et al): the worst thing to do if you want to get into a game development job is to join QA expecting it to be an “easy route in”:

“each person that we hire has to be able to do that, even if they’re just going to be in marketing … or support … or QA”

i.e. QA is no “easy path” – you’re still held to the same criteria.

But also, as *so few* execs from EA etc are willing to admit (and I pick EA, because I’ve seen their senior people HR blatantly lie (IMHO) about this on multiple occasions, following their own agenda):

“at most companies they put in all these barriers to keep people from moving out of QA or support … in some companies you can actually get fired for trying to get out of support positions into the development organization …[so instead] build a flash game; ship it; make it better … and you’ll get everybody’s attention if you’ve got talent”