Just run the company in a way where you don’t really care about maximizing profit. As long as you’re not at a loss and are liked, you will be successful.
Valve could probably be much more profitable at the expense of being a bigger dick, but Gabe is chill.
Also because valve is private, they don’t have any legal obligations to return maximise profit. They can purposefully lose money if they want and it’s not illegal. (At least to my knowledge)
I’m just curious but how/why would competitive pricing be illegal but not what Epic does with aggressive exclusivity agreements/offers? If Steam wanted to, could they keep prices the same to stay above the law but then use their overwhelming market share + capital to secure exclusivity across the board? I feel like the end results would be the same, securing a monopoly at the cost of short term profitability.
Thats actually what valve does. Valve mandates all games on platforms must be the same retail price (e.g a game on Steam cannot be sold for 60$ retail, but be sold for 50$ on epic), not including deals and sales.
Its standard with how physical stores demand that digital copies of games must retail at the same price as physical else stores would see that as an attack on the business by the company.
There is essentially some level of price normalization.
Private companies can have shareholders(all nfl teams but the Packers), its just a game of finding shareholders who doesnt care about constant short term profit.
Since it’s a private company he can just appoint anyone he wants to be the ceo. Maybe his son will take it or maybe he will maintain ownership of it until I’m too old to care.
But they do run it to maximize profit. There’s just allowed to do it creatively instead of obsessing over short term gains.
I mean the company essentially gave up on AAA games for well over a decade because they were making more money from steam, and Gabe famously only approves projects that have a plan to turn a profit or expand Valve’s market.
They didn’t spread into Linux out of sheer principle. It gives them more control and influence over the market to separate themselves from Windows. And they’ve done tons of shady stuff with steam like refusing to give refunds until they were sued by state governments.
I don’t read it so cynically, yes it’s in their best interest and a very smart play, but I don’t read malice into it though. Good business move, but also good for the communities and projects they’re contributing to.
Its unknown exactly how much money Valve makes but it is a safe bet they are probably one of the most profitable companies on the planet considering they get a cut of more or less every single PC game sale. Others have larger revenues but, relative to expenditures, they are likely a top 100 if not top 50.
But yeah. Everyone just needs to figure out a billion dollar idea, luck out that people liked them enough to ignore the negatives while everyone else (Stardock, Atari, Gamespy, etc) were getting torn apart, and then maintain an effective monopoly for two decades. Easy.
Just run the company in a way where you don’t really care about maximizing profit. As long as you’re not at a loss and are liked, you will be successful.
Valve could probably be much more profitable at the expense of being a bigger dick, but Gabe is chill.
Also because valve is private, they don’t have any legal obligations to return maximise profit. They can purposefully lose money if they want and it’s not illegal. (At least to my knowledge)
Ton of public companies lose money…
As long as execs get paid, it is all good.
It would be illegal if they did it to price out the competition, which I don’t think is something they do.
I’m just curious but how/why would competitive pricing be illegal but not what Epic does with aggressive exclusivity agreements/offers? If Steam wanted to, could they keep prices the same to stay above the law but then use their overwhelming market share + capital to secure exclusivity across the board? I feel like the end results would be the same, securing a monopoly at the cost of short term profitability.
Thats actually what valve does. Valve mandates all games on platforms must be the same retail price (e.g a game on Steam cannot be sold for 60$ retail, but be sold for 50$ on epic), not including deals and sales.
Its standard with how physical stores demand that digital copies of games must retail at the same price as physical else stores would see that as an attack on the business by the company.
There is essentially some level of price normalization.
I’m guessing this is a big part of it. A private company can do just about whatever they want as there are not shareholders that you are working for.
Private companies can have shareholders(all nfl teams but the Packers), its just a game of finding shareholders who doesnt care about constant short term profit.
Yeah, that’s it right there. Not being public means they don’t have to appease shareholders who want maximum growth and returns.
Yup. And the moment he steps down (or gets hit by the greed) everything will go to shit. As is tradition.
Since it’s a private company he can just appoint anyone he wants to be the ceo. Maybe his son will take it or maybe he will maintain ownership of it until I’m too old to care.
perhaps, but there are signs that Gabe’s son shares his father’s vision, so there is hope that at least things will continue as they are.
That’s good to know.
But they do run it to maximize profit. There’s just allowed to do it creatively instead of obsessing over short term gains.
I mean the company essentially gave up on AAA games for well over a decade because they were making more money from steam, and Gabe famously only approves projects that have a plan to turn a profit or expand Valve’s market.
They didn’t spread into Linux out of sheer principle. It gives them more control and influence over the market to separate themselves from Windows. And they’ve done tons of shady stuff with steam like refusing to give refunds until they were sued by state governments.
I don’t read it so cynically, yes it’s in their best interest and a very smart play, but I don’t read malice into it though. Good business move, but also good for the communities and projects they’re contributing to.
Our system of government makes this illegal for publicly traded companies.
Whose system of government? If you mean the USA, then no, it does not.
https://www.nytimes.com/roomfordebate/2015/04/16/what-are-corporations-obligations-to-shareholders/corporations-dont-have-to-maximize-profits
https://www.washingtonpost.com/opinions/harold-meyerson-the-myth-of-maximizing-shareholder-value/2014/02/11/00cdfb14-9336-11e3-84e1-27626c5ef5fb_story.html
https://corpgov.law.harvard.edu/2012/06/26/the-shareholder-value-myth/
Valve is not publicly traded.
It helps that they aren’t struggling to keep the lights on.
You can’t really do what you want if youre constantly worried if you can pay bills. Same for people, same for companies.
Its unknown exactly how much money Valve makes but it is a safe bet they are probably one of the most profitable companies on the planet considering they get a cut of more or less every single PC game sale. Others have larger revenues but, relative to expenditures, they are likely a top 100 if not top 50.
But yeah. Everyone just needs to figure out a billion dollar idea, luck out that people liked them enough to ignore the negatives while everyone else (Stardock, Atari, Gamespy, etc) were getting torn apart, and then maintain an effective monopoly for two decades. Easy.