By T.C. Sottek and Tom Warren

We just sat down for a rare and wide-ranging interview with Valve CEO Gabe Newell, who opened up to The Verge with details about the company's upcoming "Steam Box" gaming hardware, the future of the Steam digital distribution platform, and even gaming itself. For starters, Valve isn't just attacking the living room; the Steam Box will be designed to work across multiple screens in the home using networking standards like Miracast, ideally allowing users to effortlessly transition between rooms and monitors to enjoy gaming and other content. But Valve's goal isn't just to put a box into everyone's living room, it's to help build an ecosystem of content developers — including the gamers themselves.

The company isn't here to meet with the press this week — it set up a small private booth on the show floor to meet with partners for Steam-powered hardware — but Newell revealed plenty of details about the platform.





So you're working on your own Steam Box hardware. Why work with so many partners when you have your own ideal design in mind?

What we see is you've got this sort of struggle going on between closed proprietary systems and open systems. We think that there are pluses and minuses to open systems that could make things a little messier, it’s much more like herding cats, so we try to take the pieces where we’re going to add the best value and then encourage other people to do it. So it tends to mean that a lot of people get involved. We’re not imposing a lot of restrictions on people on how they’re getting involved.

We've heard lots of rumors about the Steam Box, including that Valve's own hardware would be "tightly controlled." Can you tell us more about Valve's own hardware effort?

The way we sort of think of it is sort of "Good, Better," or "Best." So, Good are like these very low-cost streaming solutions that you’re going to see that are using Miracast or Grid. I think we’re talking about in-home solutions where you’ve got low latency. "Better" is to have a dedicated CPU and GPU and that’s the one that’s going to be controlled. Not because our goal is to control it; it’s been surprisingly difficult when we say to people "don’t put an optical media drive in there" and they put an optical media drive in there and you’re like "that makes it hotter, that makes it more expensive, and it makes the box bigger." Go ahead. You can always sell the Best box, and those are just whatever those guys want to manufacture. [Valve's position is]: let's build a thing that’s quiet and focuses on high performance and appropriate form factors.

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"We'll come out with our own Steam Box and sell it to consumers by ourselves. That'll be a Linux box."

So are most of these going to be Linux-based Steam Boxes?

We’ll come out with our own and we’ll sell it to consumers by ourselves. That’ll be a Linux box, [and] if you want to install Windows you can. We’re not going to make it hard. This is not some locked box by any stretch of the imagination. We also think that a controller that has higher precision and lower latency is another interesting thing to have.

Speaking of controllers, what kind of creative inputs are you working on? Valve has already confessed its dissatisfaction with existing controllers and the kinds of inputs available. Kinect? Motion?

We’ve struggled for a long time to try to think of ways to use motion input and we really haven’t [found any]. Wii Sports is still kind of the pinnacle of that. We look at that, and for us at least, as a games developer, we can’t see how it makes games fundamentally better. On the controller side, the stuff we’re thinking of is kind of super boring stuff all around latency and precision. There’s no magic there, everybody understands when you say "I want something that’s more precise and is less laggy." We think that, unlike motion input where we kind of struggled to come up with ideas, [there's potential in] biometrics. We have lots of ideas.

"I think you'll see controllers coming from us that use a lot of biometric data."

I think you’ll see controllers coming from us that use a lot of biometric data. Maybe the motion stuff is just failure of imagination on our part, but we’re a lot more excited about biometrics as an input method. Motion just seems to be a way of [thinking] of your body as a set of communication channels. Your hands, and your wrist muscles, and your fingers are actually your highest bandwidth — so to trying to talk to a game with your arms is essentially saying "oh we’re going to stop using ethernet and go back to 300 baud dial-up." Maybe there are other ways to think of that. There’s more engagement when you’re using larger skeletal muscles, but whenever we go down [that path] we sort of come away unconvinced. Biometrics on the other hand is essentially adding more communication bandwidth between the game and the person playing it, especially in ways the player isn’t necessarily conscious of. Biometrics gives us more visibility. Also, gaze tracking. We think gaze tracking is going to turn out to be super important.





The hardware side of Valve is new, but you've obviously got a huge platform with Steam. What's the future of Steam like? Will it change as you begin to release Steam-based hardware?

We tend to think of Steam as tools for content developers and tools for producers. We’re just always thinking: how do we want to make content developers' lives better and users' lives a lot better? With Big Picture Mode we’re trying to answer the question: "how can we maximize a content developers' investment?" It’s not a lot easier for me to build content that spans running on a laptop, running in a living room, and running on the desktop, as opposed to completely re-writing your game.

Right now there’s one Steam store. We think that the store should actually be more like user generated content. So, anybody should be able to create a store, and it should be about extra entertainment value. Our view has always been that we should build tools for customers and tools for partners. An editorial filter is fine, but there should be a bunch of editorial filters. The backend services should be network APIs that anybody can use. On the consumer side, anybody should be able to put up a store that hooks into those services. Our view is that, in the same way users are critical in a multiplayer experience, like the fellow next to you is critical to your enjoyment, we should figure out how we can help users find people that are going to make their game experiences better. Some people will create team stores, some people will create Sony stores, some people will create stores with only games that they think meet their quality bar. Somebody is going to create a store that says "these are the worst games on Steam." So that’s an example of where our thinking is leading us right now.

That's different than Apple on the mobile side, and Microsoft. And you've come out against Windows 8.

"Windows 8 was like this giant sadness."

The thing about Windows 8 wasn’t just [Microsoft's] distribution. As somebody who participates in the overall PC ecosystem, it’s totally great when faster wireless networks and standards come out, or when graphics get faster. Windows 8 was like this giant sadness. It just hurts everybody in the PC business. Rather than everybody being all excited to go buy a new PC, buying new software to run on it, we’ve had a 20+ percent decline in PC sales — it’s like "holy cow that’s not what the new generation of the operating system is supposed to do." There’s supposed to be a 40 percent uptake, not a 20 percent decline, so that’s what really scares me. When I started using it I was like "oh my god..." I find [Windows 8] unusable.

So... Netflix on the Steam Box?

Oh absolutely. You can fire up a web browser, you can do whatever you want.

What about Xbox and Apple TV? How are you going to compete on the multimedia side?

So there are these $50 sort of things that output [media] from a PC somewhere in your house. There’s Miracast, and Shield from Nvidia, and so on. Those will be the cheap way to do it, and they’ll be high quality in the home. I spent a bunch of time when [OnLive] first started coming out, saying at the end of the day that trying to do that over [the internet] is the wrong idea. It’s the nature of how you build distributed applications; it’s why AT&T lost and the internet won. AT&T said "let's put all the intelligence into the network and at the center of the network." This is a battle that’s been fought many times.

What do you think about Shield?

I think at home it’s possible. The thing we’re working on with [Nvidia] is that you’ll be in your living room and your TV will potentially be connected either through wireless or ethernet. You’ll pick up a controller and Big Picture will come on. It’ll be integrated into all the TVs after a certain point, it’s like HDMI+. The problem to solve is how to interact with a web browser, how to get all the games to support controllers, and how to make it all seamless. If you want to play a casual game you just run Chrome and you have an infinite number of casual games. As months go by there will be more and more casual games available on the open platforms so we’re not super worried about that. The next step, the better side, is to get the most CPU and GPU you can fit into a box.

The next step above that is whatever we want. One of the things that’s interesting is that the PC has always had a huge amount of scalability. It was sort of the wild dog that moved into Australia and killed all the local life because it could just adapt. There used to be these dedicated devices, like dedicated word processors. We think that right now the PC scales from laptops up to mainframe.

Do you envision a Steam Box connecting to other screens outside the living room?

The Steam Box will also be a server. Any PC can serve multiple monitors, so over time, the next-generation (post-Kepler) you can have one GPU that’s serving up eight simultaneous game calls. So you could have one PC and eight televisions and eight controllers and everybody getting great performance out of it. We’re used to having one monitor, or two monitors — now we’re saying let's expand that a little bit.

So how does mobile fit into your plans?

So this [Steam Box] is called "Bigfoot" internally, and we also have "Littlefoot." [Littlefoot] says "what do we need to do to extend this to the mobile space?" Our approach will be pretty similar. We also think there’s a lot that needs to be done in the tablet and mobile space to improve input for games. I understand Apple's [approach]; all the way back in '83 when I met Jobs for the first time, he was so super anti-gaming.

In one of the designs that we’re building on the controller side, it has this touchpad and we’re trying to figure out where that’s useful. We don’t want to waste people’s money by just throwing in a touchpad. Once we understand what the role is of multitouch in these kind of applications then it’s easy to say you can use your phone for it.

"We need to have a theory of fun."

Will this hardware push affect what Valve can do with games?

When we started off with Half-Life, it was like "I work on operating systems right?" [Editor's note: Gabe Newell spent over a decade at Microsoft building Windows before co-founding Valve.] There are a bunch of ideas, there’s a bunch of craft knowledge about how to make operating systems, and when I got into reading it I was like "how do we make decisions, how do we make trade-offs?" In a kind of desperation we said "we need to have a theory of fun," like what is fun? How do we decide that expanding three menus on this is better or worse? So we came up with this rule, which is the more ways in which the game responds to a player's state or player action is more fun. In Quake, you shot a wall and the wall basically ignored you. You saw a little puff, and then there’s no record of your actions. So we said using this simple rule, just one rule, if you shoot a wall it should change.

One of the things that started to drive me crazy in video games is that when I walk into a room, I’m covered with the gore and ichor of a thousand creatures that I have slayed, and the monster in there reacts to me exactly the same. So in Half-Life there’s this whole progression depending upon what you do and how scary you are [to enemies]. Eventually they start running away from you, they start talking about you, and that was just another example of having the world respond to you rather than the world kind of being autistic and ignoring everything you’ve done. So then we did Counter-Strike, [and found] the rule we used for Half-Life doesn’t work in a multiplayer game. We got all this weird data, like you put riot shields in and player numbers go up. Then you take riot shields out and player numbers go up. Fuck! It’s supposed to go the opposite [direction], right? So we had to come up with a different way.

"There's this notion that user-generated content has to be an important part of our thinking."

Entertainment as a service was a guiding design principle for us in Counter-Strike. So now we’re in this strange world where we have people who are using the Steam workshop who are making $500,000 per year building items for other customers. In other words, there’s this notion that user-generated content has to be an important part of our thinking. We know of other game developers making more money building content for the workshop than what they get in their day job. One of the things we found is that this notion of a workshop needs to span multiple games. If we’re connecting Skyrim and other games... it’s like this notion that there’s just a game seems to be going away; games are starting to look like an instance of some larger experience.

We’re writing a platform, so you’ll hear us talk about "how do we make the pro players more valuable?" For us that's a real issue, we actually have to go off and solve engineering problems, because rather than just thinking of them as a pro player, we think of them as a user-generated content person with a particular kind of content that they’re generating. How do we help them reach an audience?

Do you think you can really disrupt the home entertainment space and compete with Microsoft and Sony?

The internet is super smart. If you do something that is cool, that's actually worth people's time, then they'll adopt it. If you do something that's not cool and sucks, you can spend as many marketing dollars as you want, [they] just won't.