Varoufakis on Valve, Spontaneous Order, and the European Crisis

As someone who has been a fan of both Valve and EconTalker since since their relative inceptions, this talk was surreal. I can confirm what Yanis said about Valve's platform steam. It's a pure monopoly and I'm fine with that because I couldn't see myself using any other platform to play games. From how robust the application is, to how easy it is to use, to how aggressive a marketplace it is, Steam has no match in the gaming space. It's no contest at the moment.

PC gaming before Valve created this platform was dying, the 'home consoles' were forcing it out of the marketplace but Steam created a stable marketplace for developers of games to have a reliable place to sell games. Valve saved the platform really. I could talk about how good of a platform Steam is but as non-hierarchical Valve is as a company I want to stress the importance of the cult of personality around Gabe Newell. I don't know any other way to describe it other that to say as someone who plays games, and has for a long while, he feels like one of us. Russ the only equivalent I can think for yourself is hearing you yourself talk about Steve Jobs. He's ruthless, meticulous and he says everything I want to hear before I thought I wanted to hear it.

Also as for firing, they just laid off a lot of people companies would be falling over to get including Jeri Ellsworth who's a computer chip designer. Absolute legend but they laid her off so the anarcho syndicalist company structure is robust enough to incorporate firing. So many topics to talk about I guess I'll move to barter economy. I remember Steam's near liquidity crisis all too well and it's still a serious problem. In some countries like South Korea I believe there are obtaining so many electronic goods in their games that can be traded outside that the government of South Korea are treating it as income, and trying to tax it. Gabe talked about this at his recent Austin talk where he basically had to create forms for Koreans to fill out to pay a tax on it. Much of the liquidity crisis has been worked out via third parties run by fans who saw the problem, and decided to act. Basically creating an ebay of sorts so you could auction away your goods. They don't go for much often times but it allows breathing room for the market. Valve quickly saw the external auction sites and I believe that's around the time they added Steam wallet so that you could just keep money on your account to trade privately, circumventing these third party trading sites.

Russ a trend with Valve not brought up here is how they're now adopting what is known as "free-to-play" structure to pricing. Just google the term I won't bore you with all the details but what's interesting on that note is how they're finding ways of creating scarcity on free goods much like Apple. The most recent game by Valve, DOTA 2 (which was brought up briefly here) is gifted to users who buy products on Steam. The product is sold in the store and can be bought for 30$ but there are so many free copies in the wild there would be no need for any user to ever buy it if you have friends who buy games. There's two really important things going on with that right there. They're incentivizing community and they're creating a huge profit. Currently DOTA 2, a game tied behind this gift structure is the most played game with 600,000 concurrent users playing it and it's not even a finished product. This free product is in direct competition with a game called League of Legends which has been out for years. To unlock all the things in League of Legends that DOTA 2 offers for free, it would cost the user upwards of hundreds of dollars. Valve is slowly but effectively pricing League of Legends out of the market. I say they're in direct competition because they are in essence the same games. Since these games are considered sports(they have thousands of users watching competitive matches almost every day, rivaling television baseball broadcasts in volume), an apt comparison would be to say DOTA 2 is to the MLB as League of Legends is to NCAA Baseball. They are near identical products with minor variations. The most endearing thing about what I just said was that DOTA 2 was worked on because the employees of the company were fans of the original, it's a product that arose out of all the wonderful innovations that Yanis brought up in this talk and I really think only could have arisen out of such a structure.

I'm not a fan of that style of game, many are but all the attention to detail in it is incredible. I hope copycats arise for the mediums sake but I doubt they can do it on the level Valve can, just because nobody has done what Valve has. Until they do I'll remain skeptical and pessimistic.

http://www.econtalk.org/archives/2013/02/varoufakis_on_v.html

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