Earlier this fall, an article came out on Geekwire’s website featuring an interview with Gabe Newell, the man in charge of one of the most successful PC game developers and distributors – Valve Corporation. This interview highlights a lot of strange, interesting, and puzzling phenomena found in the online PC market that puts a lot of economic principles to test.
Valve is in a unique position to collect data and analyze economic theories, being the largest distributor of online PC games through their Steam distribution service. Through Steam, Valve can observe consumer behavior, purchases, and game activity in real time and base policies on data trends.
I want to highlight three interesting insights that emerge from the interview, and provide some brief commentary on what makes them so strange, and how we might go about exploring their consequences. Some of the language of the interview is a bit unclear, so below is my attempt to glean the basic results of it. Continue reading