It is pointed out that Steam's developer Valve's commission income has increased 20-fold in about 10 years, and its operating profit per employee has exceeded 500 million yen, thanks to its 'unique corporate culture.'



Valve, a game development company founded by former Microsoft employee

Gabe Newell, is known for developing classic titles such as the ' Half-Life ' and ' Counter Strike ' series, as well as operating the PC game sales platform and game launcher 'Steam.' Steam has an overwhelming share of the PC game sales market, and the Financial Times, a British economic newspaper, reports that Valve is generating huge revenues.

Valve conquered PC gaming. What comes next?
https://www.ft.com/content/f4a13716-838a-43da-853b-7c31ac17192c

Valve's reported profit-per-head from Steam commissions is out there, and at $3.5 million per employee it makes Apple and Facebook look like a lemonade stand | PC Gamer
https://www.pcgamer.com/gaming-industry/valves-reported-profit-per-head-from-steam-commissions-is-out-there-and-at-usd3-5-million-per-employee-it-makes-apple-and-facebook-look-like-a-lemonade-stand/

Steam was originally developed as a solution to the problem of PC game piracy in the early 2000s, integrating game updates, piracy prevention, and cheat prevention into a single platform. This convenience for gamers has made Steam the default platform for the PC game market in an instant, establishing a dominant position that accounts for approximately 70% of the entire market, generating phenomenal profitability.

In 2024, leaked litigation documents with indie developer Wolffire Games revealed that Steam's commission revenue was estimated to reach approximately $2 billion in 2021, with operating profits estimated to be approximately $1.2 billion to $1.3 billion.

Valve, which operates Steam, has only 336 employees as of 2021, and the average annual salary is estimated to be 200 million yen - GIGAZINE



What's particularly noteworthy is that this profit is generated by a very small number of employees; as of 2021, Valve has a total of 336 employees, which means that each employee makes about $3.5 million in profit from Steam fees alone.

Furthermore, if we look only at Steam's employees in the administrative and management departments, the figure comes out to a staggering $11.4 million per employee, far surpassing not only other tech giants like Facebook and Apple, but even Wall Street financial firms as of 2018.

The chart below shows the commission revenue (in millions of dollars) that Steam earns from game sales in a bar graph, the operating margin in a green line graph, and the gross margin in a red line graph. We can see that the explosive growth in commission revenue, combined with the maintenance and improvement of high operating margins, has generated huge profits for Valve. The rapid growth, especially since 2020, is thought to reflect the global increase in demand for games due to the COVID-19 pandemic. The Financial Times analyzed that 'team appeared in the right place at the right time, quickly becoming the standard platform for PC gamers to download and manage their games.'



Furthermore, the Financial Times claims that 'Valve's unique corporate culture' is also behind this success. Valve has a 'flat' organizational structure, with no formal managers or hierarchies, and employees autonomously lead projects and move their desks to be closer to those they want to collaborate with. On the other hand, this free culture also has the drawback of an extremely slow pace of development of new games, and the 'stack ranking' system, in which colleagues evaluate each other and decide on rewards, places emphasis on short-term results.

Valve has also faced some controversy due to its laissez-faire approach, the Financial Times noted. Competitors have filed antitrust lawsuits against the company for being anti-competitive, and the Steam forums have also been criticized for being a breeding ground for extremism. Valve has responded by stating that its content policy allows essentially everything 'except for illegal content or simple trolling.'

The man who built this corporate culture is the well-known libertarian founder Newell, who has reportedly rarely been seen in the office in recent years and is now living on a ship. At the same time, he has a strong interest in brain-computer interface (BCI) technology, which connects the brain to a computer, and has founded a new startup

called Starfish Neuroscience . The Financial Times speculated that if Newell were to step down from management, Valve would undoubtedly become an attractive acquisition target for major tech companies.


by Dota 2 The International

In response to the Financial Times's view that 'Valve's success was due to its unique corporate culture and jumping on the bandwagon,' a comment was made on the social news site Hacker News, criticizing the view as 'an economic analyst-level mistake.' The user who posted said, 'Valve saved PC gaming when other major companies, including Microsoft, abandoned the PC to focus on the lucrative console (home game) market, and they didn't just jump on the bandwagon. The other major companies that have recently returned to the PC market are opportunistic players who could destroy PC gaming again for the benefit of their own consoles.'

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in Note,   Web Service,   Game, Posted by log1i_yk