Valve

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 series.

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.[5] [6]  In 2015, Valve entered the gaming hardware market with the Steam Machine, a line of third-party built gaming PCs running Valve's SteamOS operating system.

Founding Half-Life (1996-2003)
Valve was founded in 1996 by former longtime Microsoft employees Gabe Newell and Mike Harrington. Newell had spent the prior 13 years at Microsoft developing Windows.[7] Wanting to move onto a new venture using their shared wealth, they founded Valve, L.L.C. in Kirkland, Washington (about five miles from the Microsoft campus in Redmond), on August 24, 1996, Newell's wedding day.[8] [9] [7] [10]  Alternative names considered by Newell and Harrington include "Fruitfly Ensemble" and "Rhino Scar".[11]

Valve's first product was Half-Life, a first-person shooter (FPS) with elements of the horror genre.[12]  The development was aided by access to the Quake engine by id Software; another former Microsoft employee Michael Abrash, who had worked with id, helped negotiate the license. Valve modified this engine into their GoldSrc engine.[7]  After struggling to find a publisher, Valve eventually signed with Sierra On-Line.[7]  Half-Life was released in November 1998,[13]  and was a critical and commercial success.[14] [15] [16]  According to IGN in 2014, the history of the FPS genre "breaks down pretty cleanly into pre-Half-Life and post-Half-Life eras."[17]

Valve enlisted Gearbox Software to develop three expansions for Half-Life.<sup id="cite_ref-hist_7-4">[7] <sup id="cite_ref-18">[18]  They acquired TF Software, a group that made a popular Quake mod for Quake, and remade the mod for GoldSrc as Team Fortress, released in 1999.<sup id="cite_ref-19">[19]  The company released the software development kit (SDK) for the GoldSrc engine, facilitating numerous user-created mods. One of these, Counter-Strike, became one of the most popular mods, and Valve acquired the mod and hired its developers to create the standalone Counter-Strike game.<sup id="cite_ref-hist_7-5">[7]  Harrington left the company in 2000.<sup id="cite_ref-hist_7-6">[7]

Exspanion, Source engine, and Steam (2003-2013)
In 2003, Valve moved to Bellevue, Washington, and re-incorporated as Valve Corporation.<sup id="cite_ref-hist_7-7">[7]  In 2010, the office moved again to a larger location in Bellevue. In 2016, Valve signed a nine-floor lease in the Lincoln Squarecomplex in downtown Bellevue, doubling the size of their offices.<sup id="cite_ref-20">[20]

After the success of Half-Life, the team worked on mods, spin-offs, and sequels, including Half-Life 2, using its new Source engine, improving upon its GoldSrc engine. Team Fortress 2 was a reworked version of Team Fortress Classic developed in the Source engine. To expand on Half-Life 2, Valve had planned on releasing three episodes to extend its story prior to a planned Half-Life 3. With the second episode, Valve also packaged the game for consoles in The Orange Box, which included Half-Life 2 and both episodes, Team Fortress 2, and Portal, an experimental game developed by a student team hired into Valve from their work on Narbacular Drop. Of the Orange Box games, Portal proved a critical success, and later, Valve developed Portal 2, hiring in another student team from the game Tag: The Power of Paint to incorporate those mechanics.

Alongside developing games, Valve developed Steam, a digital storefront and delivery platform. The concept of Steam bore out of Valve trying to maintain patches for games like Counter-Strike so that all players were up-to-date. Failing to gain help from other third-party developers, Valve took it on themselves to build out Steam, which was first introduced in 2002, and eventually became mandatory by the time of Half-Life 2'srelease.<sup id="cite_ref-21">[21] <sup id="cite_ref-22">[22]  Steam initially offered only Valve's games, but they soon allowed third-parties to sell on the service with Valve taking a cut of the revenues for maintaining the storefront and content delivery. Steam eventually became the most significant ways gamers on the personal computer platform acquired digital games, with Steam accounting for up to 70% of all digital sales.<sup id="cite_ref-forbes-gnprofile_23-0">[23]

In January 2008, they announced the acquisition of Turtle Rock Studios,<sup id="cite_ref-Valve_2008-01-10_24-0">[24]  which would be renamed Valve South.<sup id="cite_ref-25">[25]  Turtle Rock developed Left 4 Dead and Left 4 Dead 2 while associated with Valve. Turtle Rock Studios later spun out of Valve again in March 2010.<sup id="cite_ref-26">[26]

Valve hired IceFrog, the developer of Defense of the Ancients, a Warcraft III mod. IceFrog led the development of a sequel not associated with the Warcraft elements, Dota 2.<sup id="cite_ref-27">[27]

In December 2012, Valve acquired Star Filled Studios, a two-man gaming company, to open a San Francisco office.<sup id="cite_ref-28">[28]  However, Valve ended the operation in August 2013 when they decided there was little benefit coming from the arrangement.<sup id="cite_ref-29">[29]

At the 2013 D.I.C.E. Summit, Newell announced that he and film director J. J. Abrams were collaborating to produce a Half-Life or Portal film, as well as a possible new game.<sup id="cite_ref-30">[30]

Transition to services, VR, and Source 2 (2014-present)
Valve's activities as a game developer has slowed significantly since 2013, around the same time that Valve started to reduce its involvement in curation on Steam via Steam Greenlight, allowing for a larger influx of titles and gain its dominate position as the primary digital storefront for PC gaming. Between 2014 and 2019, Valve has only developed one game, Artifact. However, Valve has also looked at other projects, including Steam Machine consoles, and developing virtual reality hardware in association with HTC in the HTC Vive and later in its own Valve Index hardware. It has been argued that the transition from game developer to service provider has been driven by the economics in Steam, which is estimated to bring in more revenue than Valve's own game sales; in 2017, Steam Spy estimated that Valve has received US$4.3 billion in its revenues from Steam sales.<sup id="cite_ref-31">[31]  In contrast, Valve had estimated to have had only hundreds of millions of dollars in revenue around 2010 and 2011 with a net worth estimated between two and four billion dollars.<sup id="cite_ref-32">[32]  Many players have been waiting in anticipation of either the final episode of Half-Life 2, or a potential Half-Life 3, and while word of several potential starts on these have been mentioned by former Valve employees or other companies, they remain in limbo as of 2019. Some consider these projects to be canceled due to the departure of some of the lead talent involved in earlier games.<sup id="cite_ref-33">[33]

The change in Valve's approach has also been attributed to its use of a flat organization structure that was adopted as the company expanded. Valve's structure was more typical of other development firms at its founding, driven by the nature of physical game releases through publishers that required tasks to be completed by given deadlines.<sup id="cite_ref-gamasutra_newell_2017_34-0">[34]  However, as Valve became its own publisher via Steam, it transitioned to a looser, flat structure, which was formally in place by 2012.<sup id="cite_ref-35">[35] <sup id="cite_ref-valve_neh_36-0">[36]  Outside of executive management, Valve does not have bosses, and the company used an open allocation system, allowing employees to move between departments at will.<sup id="cite_ref-37">[37] <sup id="cite_ref-38">[38]  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".<sup id="cite_ref-gamasutra_newell_2017_34-1">[34]  Many outside observers believe the lack of organization structure has led to frequent cancellations of potential games as it can be difficult to convince other employees to work on such titles.<sup id="cite_ref-layoffs_39-0">[39] <sup id="cite_ref-yanis_40-0">[40] <sup id="cite_ref-41">[41]

Valve announced the Source 2 engine in March 2015, later porting the entirety of Dota 2 to the engine in September of that year.<sup id="cite_ref-42">[42] <sup id="cite_ref-43">[43]  In April 2018, Valve acquired the independent developer Campo Santo, known for the 2016 adventure game Firewatch. Campo Santo will continue to develop its own games under Valve.<sup id="cite_ref-44">[44]  In November 2018, Valve released Artifact, a digital collectible card game based on Dota 2. The game was considered a flop, losing 95% of players months after release.<sup id="cite_ref-45">[45]  In June 2019, Valve released Dota Underlords into early access. It is based on Dota Auto Chess, a popular Dota 2 community-created auto battler game mode.

In November 2019, Valve announced Half-Life: Alyx, a virtual reality game, which will be released in March 2020. According members of the development team, much of its early development was honing the Source 2 engine. Along with that they had developed a number of game prototypes, but which never got to a state that made sense to release for a game.<sup id="cite_ref-finalhours_alyx_46-0">[46]  Since 2015, Valve had been working to develop their own virtual reality headset, the Valve Index, which was released in June 2019. Many asked during this type what Valve had planned to release as a flagship game for their VR hardware as to justify an investment into the hardware, leading Valve to examine other possible prototypes before falling onto a new Half-Life game to serve this role.<sup id="cite_ref-finalhours_alyx_46-1">[46]