Sunday, October 16th 2011

Walled Garden Outfit Valve Accuses Apple Of Operating A Walled Garden

You've got to laugh at the hypocrisy of big companies sometimes. It's a well known fact that Apple operates a very closed and controlling walled garden eco system with all of their products, courtesy of the late Steve Jobs. Examples include the iPhone, which can only purchase apps from the official Apple apps store and the iPod, which can also only sync with iTunes, both due to deliberate vendor lock-in using a combination of hardware and software DRM (Digital Restrictions Management). Apple claims that this is to ensure a seamless, consistent and high quality user experience. Savvy users know this to be only half the story, instead it's there to shut out competition and lock you in to Apple for everything in order to charge high prices for allegedly "premium" product. The only way to avoid this, is to jailbreak the devices (break the DRM) which conveniently (for Apple) voids the warranty on these expensive gadgets. Thankfully, this process is no longer underground, due to a recent court ruling that said jailbreaking was legal, much to Apple's displeasure.

However, the equally closed Valve, with their Steam gaming platform and it's account-based DRM has accused Apple of being a closed system! They are also "concerned" about it. This happened in an interview between Bellevue-based Valve's Gabe Newell and leading games investor Ed Fries at the WTIA TechNW conference. This has been reported in The Seattle Times in Brier Dudley's blog.

The Steam platform gives the illusion of openness, because it allows such things as game backups to be made and also allows a game to be played on any number of computers (one at a time of course) simply by installing the Steam client, the game and logging in. Like Apple, you can also only purchase from its own store, of course. However, it's certainly one of the "best" DRMs out there as far as DRM goes, given the various features of the Steam client, such as auto updates and social networking. However, the huge "but" in all this though, is that Valve do not let you sell on your used Steam games as a matter of corporate policy(SSA section E,(i)), although the system to transfer game access from one account to another has always been present and correct. This removes an individual's first sale rights as defined in law, but makes games companies ecstatic, because they have complained bitterly about used game sales allegedly eating into their business, as if they have any right to that used game money in the first place. It's exactly like car companies stopping you from selling your used motor, alleging that it hurts the sales of new cars. Utter rubbish. One wonders if this unreasonable restriction would truly stand up in court if someone with money took them on?

In the interview, Fries asked if these were the best of times, or the worst. For the clearest answer to this question, let's quote from Dudley's blog. Newell replied:
"It's a very interesting time."
"Our business is growing very rapidly both on the content side and on the service platform side so in that sense, business has never been better," Newell said. "The challenges we see looking forward are very rapidly evolving model for how value is created for customers."
After broad pursuit massively multiplayer online games, the free-to-play model is emerging as "a really interesting opportunity," he said.
But there are dark clouds forming, Newell continued, raising concerns about the closed-garden approach of platforms such as Apple's iOS.
"On the platform side, it's sort of ominous that the world seems to be moving away from open platforms," he said.
Platform providers that used to use their role to enable developers "instead view themselves as more rent guys who are essentially driving their partner margins to zero," he said.
"They build a shiny sparkling thing that attracts users and then they control people's access to those things," he said.
Newell said that "very large structural investments and structural changes" are coming over the next few years that will threaten people who create value bulding things like the open Internet.
The conversation then moved onto consoles, but soon returned to discussion of closed systems. Notice how these closed systems act like the worst kind of monopolies, with the company running it squeezing their partners so hard that they make no money at all. Therefore, their greed ends up killing their golden goose and the business model fails for everyone. This is just the same as expecting people to work an average 9-5 office job without pay. Ridiculous. Dudley continues with:
Newell reiterated his concerns about a closed model being the "wrong philosophical approach" but one that people will emulate because of the success of Apple and Xbox Live.
"I'm worried that the things that traditionally have been the source of a lot of innovation are going - there's going to be an attempt to close those off so somebody will say 'I'm tired of competing with Google, I'm tired of compeitng with Facebook, I'll apply a console model and exclude the competitors I don't like from my world.'"
Fries asked Newell to clarify whether he sees Apple as being a closed platform.
"I consider Apple to be very closed," Newell said. "Let's say you have a book business and you are charging 5 to 7 percent gross margins. You can't exist in an Apple world because they want 30 percent and they don't care that you only have 7 percent to play with."
Doesn't Valve's Steam service also extract a "tax" on game companies that use the platform, Fries asked.
Newell said Steam gets a commission if games are sold through Steam, but developers can use its free tools and services and sell their games elsewhere and "we don't take anything."
If Valve were to make a hardware platform, it would open it up to competing distribution systems because openness is important to the future of the entertainment industry, he said.
So there you have it. Steam is wonderfully open in the sense that developers can use it flexibly and they don't charge high commissions, but the customer (gamer) is locked in tight, like a straitjacket. How is this an open system?

As the old saying goes, it's the pot calling the kettle black. Enjoy the picture.

As well as our primary news source, thanks also go to our secondary sources linked to in the article: Techdirt, TG Daily and Wikipedia.Source: The Seattle Times
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84 Comments on Walled Garden Outfit Valve Accuses Apple Of Operating A Walled Garden

#1
Easy Rhino
Linux Advocate
Walled Garden Outfit Valve Accuses Apple Of Operating A Walled Garden
huh?
Posted on Reply
#2
Frick
Fishfaced Nincompoop
How is this news and not opinion?
Posted on Reply
#3
Easy Rhino
Linux Advocate
by: Frick
How is this news and not opinion?
it should be in the opinion section or something. also, the title makes no sense. i had to read into the article before i could understand the title. it needs to be changed.
Posted on Reply
#4
Kreij
Senior Monkey Moderator
There is nothing wrong with editorials and/or opinion pieces. The problem is that there is no editorial/opinion section to put them into at the moment. There should be.
I asked W1zz about doing editorials and he said fine, put them in their respective section. The problem is that editorials can many time cross multiple sections in their content (hardware/software).

Anyway ... Steam is a more open system in that as a developer you are not required to only sell your product on Steam. You can sell your game on Steam, on your own website and anywhere else you would like all at the same time.
Posted on Reply
#5
AphexDreamer
Interesting article, something I was well aware of and dread but sadly its just one of those things that just is.

I hope legal actions are taken, perhaps a class action law suit that would push steam to allow us to manage our games the same way we would expect when we physically own them.

If we can physically trade and sell the games we own the it goes to say we should be able to virtually trade and sell the games we own.

I remain optimistic that something like this will be done either through steam or a new digital distribution software that will give steam a run for its money.

Walled Garden Term
Posted on Reply
#6
[H]@RD5TUFF
Apple opperating a proprietery totolitarian closed system . . . . shocker!:rolleyes:
Posted on Reply
#7
theeldest
This is a ridiculous piece. Apple with their hardware+software ecosystem is quite a different story from Valve with Steam.

And using steam isn't a requirement... You can buy games through other channels.
Posted on Reply
#8
reverze
how is valve anything like apple.... valve isnt an OS and isnt hardware, nor are you ever forced to use their steam platform unless the devs,and not valve , choose to publish on steam only.

that said, if TPU is going with these pointless articles which i can find a dozen of on neowin, ill just stick with neowin.
Posted on Reply
#9
XooM
This is garbage. Why is this on the front page?
Posted on Reply
#10
[H]@RD5TUFF
If apple was smart it would partner with steam to add more games to it's platform, there is a lot of anti M$ people who run it because there is no other option, I might actually boot into OSX more than once a month if I could play my games.
Posted on Reply
#11
Easy Rhino
Linux Advocate
id like valve to make a linux compatible version of their games and also support steam on linux. at least having a few popular linux games would really open up a new world to developers who want to put together a game in an open environment.
Posted on Reply
#12
Moose
Ok I don't really understand why all these replies are saying that this is crap. Apple is the biggest DRM using company there is they would like your whole life to be Apple controlled with no competition, paying huge sums to Apple for services others give for free.

The only thing that is a bit wrong is steam, although it's DRM steam doesn't uninstall all other programs from your system and take it over so you can only use steam to get programs. It even goes so far as to happily coexist with other programs not bought on steam allowing you to have the steam overlay on them if you want it.

As for the title I'd have thoguht it was obvious for anyone who knows about technology.
Posted on Reply
#13
qubit
Overclocked quantum bit
by: AphexDreamer
Interesting article, something I was well aware of and dread but sadly its just one of those things that just is.

I hope legal actions are taken, perhaps a class action law suit that would push steam to allow us to manage our games the same way we would expect when we physically owe them.

If we can physically trade and sell the games we own the it goes to say we should be able to virtually trade and sell the games we own.

I remain optimistic that something like this will be done either through steam or a new digital distribution software that will give steam a run for its money.

Walled Garden Term
Thanks for the walled garden definition. I've added it to the article. :toast:

And yes, competition is what's needed here. If Origin ends up being run in a similar way to Steam, then perhaps this will come about. I won't hold my breath though. :ohwell:
Posted on Reply
#14
Easy Rhino
Linux Advocate
by: Moose


As for the title I'd have thoguht it was obvious for anyone who knows about technology.
not only is the title OPINION it is also too wordy. it should read, "Valve Accuses Apple of Operating a Walled Garden."

news articles are about reporting facts behind events, not drawing conclusions based on other people's opinions.
Posted on Reply
#15
LDNL
Qubit :slap:. Kinda questionable why we had those bf3/mw3 articles on the front page.
Posted on Reply
#16
qubit
Overclocked quantum bit
by: Easy Rhino
not only is the title OPINION it is also too wordy. it should read, "Valve Accuses Apple of Operating a Walled Garden."

news articles are about reporting facts behind events, not drawing conclusions based on other people's opinions.
Ok, I'll dive in.

The title is fine as it is, because the whole article is about the hypocrisy displayed by Valve. Your suggestion would neuter that.

There is an editorial button I could click, which would put a stylized "Editorial" icon next to it. I've been mulling over clicking it. What do you think? :toast:
Posted on Reply
#17
Frick
Fishfaced Nincompoop
by: qubit
Ok, I'll dive in.

The title is fine as it is, because the whole article is about the hypocrisy displayed by Valve. Your suggestion would neuter that.

There is an editorial button I could click, which would put a stylized "Editorial" icon next to it. I've been mulling over clicking it. What do you think? :toast:
Doo eeet. News is "Powercolor readies awesome GPU" or stuff like that, this is not news.

Imo. :)
Posted on Reply
#18
Easy Rhino
Linux Advocate
this is not news, it is an editorial.
Posted on Reply
#19
Moose
by: Easy Rhino
not only is the title OPINION it is also too wordy. it should read, "Valve Accuses Apple of Operating a Walled Garden."

news articles are about reporting facts behind events, not drawing conclusions based on other people's opinions.
I happen to agree with you that the title shouldn't show opinion but the point I was making is that everyone is saying it doesn't make sense when it is very obvious if you know anything about the companies, I had never heard the term "walled garden" before but I understood the title immediately.
Posted on Reply
#20
qubit
Overclocked quantum bit
Ok done, editorial it is! :) Heck, it's a Sunday, time for something a little different. ;)
Posted on Reply
#21
Kreij
Senior Monkey Moderator
I like the editorial/opinion pieces that Qubit writes. I've felt that TPU should have editorials for quite some time.
I've known about this issue (Gabe's opinion on Apple) for several days from reading other sites and this editorial is well researched and well done.
The title should display opinion, because ... (drum roll) ... it's Qubit opinion!!

It does not matter if I agree or not. Editorials are great for generating discussion and liven things up in a way that hard news cannot do. You, as a TPU member, have a LOT more freedom of expression than on many other sites, and this give you a chance to jump in and agree with Qubit or beat him up without (too much) fear of getting your ass kicked.

Keep up the good work Q. I disagree with your opinions many times, but that's what makes these editorials entertaining for me. :toast:

I think I just wrote an editorial on Qubit's editorial. :eek: :D
Posted on Reply
#22
[H]@RD5TUFF
by: easy rhino
id like valve to make a linux compatible version of their games and also support steam on linux. At least having a few popular linux games would really open up a new world to developers who want to put together a game in an open environment.
yes please!!
Posted on Reply
#23
kid41212003
I think stating your own opinion first before showing people the fact is a bad writing structure, but that's just my opinion.

And since the title is giving the impression of "Valve is accusing Apple of operating a closed platform", it should be focusing on showing information about that.
Posted on Reply
#24
silkstone
by: Kreij
I like the editorial/opinion pieces that Qubit writes. I've felt that TPU should have editorials for quite some time.
I've known about this issue (Gabe's opinion on Apple) for several days from reading other sites and this editorial is well researched and well done.
The title should display opinion, because ... (drum roll) ... it's Qubit opinion!!

It does not matter if I agree or not. Editorials are great for generating discussion and liven things up in a way that hard news cannot do. You, as a TPU member, have a LOT more freedom of expression than on many other sites, and this give you a chance to jump in and agree with Qubit or beat him up without (too much) fear of getting your ass kicked.

Keep up the good work Q. I disagree with your opinions many times, but that's what makes these editorials entertaining for me. :toast:

I think I just wrote an editorial on Qubit's editorial. :eek: :D
I agree. Editorials are fine, you don;t have to agree with them. It's just a pity that there isn't a dedicated editorial section.
I love sites like ArsTech which run frequent opinion pieces. Even if a don't agree with them, they are certainly interesting to read.
Posted on Reply
#25
FreedomEclipse
Crazy Dogmatic Bullsh!t!
by: Kreij


I think I just wrote an editorial on Qubit's editorial. :eek: :D
the master lecturing the apprentice?
Posted on Reply
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