System manufacturers 'are the rent guys who drive their partner margins to zero'

Newell: Consoles must cease isolating developers

Platform holders are severing direct lines between developers and customers for their own benefit, Valve president Gabe Newell has said.

Newell, who has repeatedly called on the industry to open its closed games platforms, says the current insular approach is hurting business and stifling creativity.

In what was an unremitting criticism of the industry, Newell said the likes of Microsoft, Nintendo and even Apple “view themselves as more rent guys who are essentially driving their partner margins to zero".

"They build a shiny sparkling thing that attracts users and then they control people’s access to those things," he said, as quoted by the Seattle Times.

Newell, speaking at the WTIA TechNW conference, said it was “ominous that the world seems to be moving away from open platforms”.

Valve’s business has been built on the notion that its developers are given a direct line to customers. Analytics and player feedback are data feeds that determine business decisions. This model, also employed across the booming social games space, has driven Valve to become a multi-billion dollar company.

But the platform holders have hitherto sheltered its development partners from customers, Newell explained.

This is the “wrong philosophical approach", he added, but one that people will emulate because of the success of Apple and Xbox Live.

"I’m worried that the things that traditionally have been the source of a lot of innovation are going – there’s going to be an attempt to close those off so somebody will say ‘I’m tired of competing with Google, I’m tired of competing with Facebook, I’ll apply a console model and exclude the competitors I don’t like from my world.’"

In its bid to open consoles to the internet, Valve reached a breakthrough last year. The company announced its Steam platform will be accessible on PlayStation, in theory giving Valve a direct line to PS3 customers.

It is not known if Sony has allowed Valve full access and control over its PS3 Steam platform – it is believed content still has to be evaluated and approved by Sony.

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