For us, the Xbox 360 and the PS3 are challenges for designing a system so that it is as simple as possible for publishing simultaneously on all three platforms. The Wii is more of a challenge because of its input - that's something that we're going to have to work harder to understand. It's easier to think of the Xbox 360 and the PlayStation 3 as things that live within the flexibility you already have to think of on the PC side. And the Wii is the thing that is both furthest outside and most exciting, because of the controller. I have to say that we don't understand how to take advantage of that yet. We think there's a lot of potential there, and our respect for Nintendo goes up a notch, as they're the ones who are doing the things that are disruptive and exciting.
Sony has always said that it is going to leave the ultimate control of its online service to developers and publishers. Could you envisage Steam and the PS3 Online Service merging in some way?
Gabe Newell: We'll certainly take advantage of whatever flexibility and openness they have, and if we can run our games through Steam, and get updates and new content to those customers, then that would be great. We'd encourage them to go in that direction, because we think the publishers and developers can do a really good job of figuring out how to deliver those services. That might be a key part of their strategy against Microsoft, because Microsoft wants to have that stuff very controlled through their systems.
It's nice that in general, those consoles that have lagged in their appreciation of the value of having the connected customer are starting to realise how important that is. Obviously, given our history, going back to the very beginning of the company, we've really believed that having that connected customer presents opportunities in game design, support and communications.
Right now, I think the benchmark game in the industry is World of Warcraft, and every platform could be measured against its ability to give advantage, or fail to give advantage, to building a better World of Warcraft. In the way that, in previous generations, it might have been a Grand Theft Auto or a Final Fantasy that was the benchmark. If your platform helps developers build something that beats that, then you're on the right track. If you're not offering that capability, then you're probably going to struggle.
How feasible is it for companies with less resources than Valve to build a game split into a number of episodes? Because you can't build part of a game and then release it.
Gabe Newell: I think that's one of the challenges. In the Quake era, one of the big challenges was working out how to build a 3D graphics engine. In Half-Life 2's era, one of the big challenges was scalability. One of the challenges now, for a developer, is managing risk: how can you build something that's useful and have only one roll of the dice, because most of the time, you're going to fail. I think building stuff that's smaller and managing to reduce the scope is one of the big challenges for game developers right now. It seems to work: I think the guys who built Darwinia could have made their job impossible, but they made some really good choices. Their art direction by itself made their art production workload enormously less, and those are the sort of smart choices people have to make.
How much nicer is it working with EA rather than Vivendi?
Gabe Newell: Well, EA hasn't sued us yet, so that's an improvement.
Have you got any comments to make on what happened with Vivendi, or would you rather not?
Gabe Newell: (Laughs) That was our old girlfriend... We've been very happy with EA, they're a very professional, very effective organisation. And nobody is suing anybody, so that's a vast improvement.
What is your take on in-game advertising?
Gabe Newell: I think it's interesting, and that people need to explore it. What it comes down to is that it's a monetisation issue. In Korea, for example, there are a bunch of games where the base game is given away for free, and you make money as a developer by allowing people to customise themselves. I think advertising is another way in which you can move away from trying to charge your customers. Hopefully, it's going to be a way of increasing the distribution of certain kinds of games, by reducing the direct cost to customers.
Could it ever be made to work in something as well-defined as the Half-Life universe?
Gabe Newell: The way we've designed the game, it would struggle if it had advertising intruding on it, because we weren't thinking about that when we were designing it. Obviously, any sports games are very well suited to having advertising.