Gabe Newell, the co-founder of gaming company Valve, turned a single game into a nearly $10 billion fortune. Last October, 20 Valve employees gathered to celebrate the 25th anniversary of Half-Life, Valve’s first best-selling game. Despite Valve’s success in multiple areas, including its digital sales platform Steam and hit games like Portal and Dota 2, Half-Life remains core to the company’s identity. Gabe Newell, the reclusive president of Valve, rarely attends company events and has been living on one of his five ships since the pandemic. Valve has maintained a more than 40% operating profit margin for a decade and has been more profitable per employee than companies like Amazon and Microsoft.
Valve’s Steam platform dominates the global market for online game distribution, with an estimated 75% market share. Steam’s success has allowed Valve to venture into hardware, launching the Steam Deck console in 2022. The Steam Deck can play PC games, giving players access to their existing Steam library. The company sold nearly half a billion dollars’ worth of consoles in its first year. Steam contributed an estimated $3 billion to Valve’s revenue in 2023 and is growing rapidly, with total game sales up 18% that year.
Despite Valve’s success, Steam’s 30% cut of sales has drawn criticism from competitors like Epic Games, which operates the Epic Games Store. Epic Games CEO Tim Sweeney has called for a change to the 30% fee, arguing it is too high for developers. Several companies have removed popular games from Steam to host exclusively on their own platforms or the Epic Games Store, only to return due to Steam’s large audience. Valve is facing lawsuits alleging anticompetitive behaviors, including forcing publishers to match Steam’s prices on other platforms.
Gabe Newell’s focus appears to have shifted away from Valve to personal passion projects, including Starfish Neuroscience and Inkfish. Starfish, spun off from Valve in 2022, is working on neural interfaces, while Inkfish conducts maritime research. Newell’s absence from Valve’s day-to-day operations has led to speculation about the company’s future direction. Despite his reduced involvement in Valve, Newell remains one of the most central players in the gaming industry and a legendary figure in the field.
