Impending Windows 8 'catastrophe' behind $3bn game maker’s shift to Linux

By Graeme Burton
27 Jul 2012 View Comments
Half Life 2

Computer game platform maker Valve is to port its Steam gaming and distribution platform to Ubuntu Linux in a move intended to protect the company from the impending "catastrophe" of Windows 8.

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The availability of the Steam platform will make the latest games available on the open source operating system for the first time – making Linux a potentially viable migration option for ordinary consumers.

The shift by the company, valued by Forbes at $3bn (£1.9bn), is all the more significant because co-founder and chief executive Gabe Newell spent 13 years at Microsoft. Newell was being questioned on stage by Microsoft's former vice president of game publishing, Ed Fries, at an event co-sponsored by Google Ventures, the venture capital investment arm of Google.

"The big problem that is holding back Linux is games. People don't realise how critical games are in driving consumer purchasing behaviour," said Newell. "We want to make it as easy as possible for the 2,500 games on Steam to run on Linux as well. It's a hedging strategy."

Part of the reason for the move is the potentially disruptive effect of Windows 8 when it is released in October. "I think Windows 8 is a catastrophe for everyone in the PC space. I think we'll lose some of the top-tier PC/OEMs, who will exit the market. I think margins will be destroyed for a bunch of people. If that's true, then it will be good to have alternatives to hedge against that eventuality."

For many software vendors, the Windows Store that will be built into Windows 8 represents a potent threat to their livelihood. It will give Microsoft a direct link to software-buying purchasers for the first time. Microsoft is believed to be demanding a 30 per cent commission from developers wishing to sell their software in the Windows Store.

This represents a direct threat to Valve's business model. For other developers, the level of knowledge about consumers and their software preferences that Microsoft will be able to glean from the store will hand it an unprecedented level of power over its own eco-system.

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