He is also unafraid to tweak rivals, once calling the PlayStation 3 a "total disaster." He has since made up with Sony. His 6-foot-4 frame often makes him the target of fat jokes by online wags. Newell looms large both in real life and the industry. Newell owns more than half of the business, making the Harvard dropout a near billionaire, if not one already. Various sources value the company at $2 billion to $4 billion, which is reasonable, considering the $4 billion to $6 billion valuations being put on Zynga, the maker of Facebook game hits FarmVille and Cafe World. (Valve denies being made an actual offer, only confirming that it received interest in both Steam and Valve in the past.) A potential buyer was rumored to have made an acquisition offer a few years back for the Steam piece only, but Newell supposedly refused to split the online storefront from Valve's game-publishing arm. Newell says that, per employee, Valve is more profitable than Google and Apple. Valve announced last October that it was on track for its biggest year ever, with 200% year-over-year growth.
The 250-person company releases no financials but, according to Newell, is "tremendously profitable." Ed Barton, a games analyst at IHS Screen Digest, estimates that Valve's revenue in 2010 was in the "high hundreds of millions of dollars." (A 2005 FORBES story on Valve had the company grossing $70 million with a fat $55 million in operating profit.) Its sci-fi shoot-'em-up thriller Half-Life 2 has sold 12 million copies since 2004 and is the highest-rated PC game on the Web site Metacritic. Steam controls half to 70% of the $4 billion market for downloaded PC games, selling titles from bigger firms such as EA and Activision, as well as Valve's own games. "He has some sharp insights for what makes good games and for what's around the corner in technology." He's one of the smartest people I know," says John Riccitiello, chief executive of one of the world's biggest game publishers, Electronic Arts. A milestone was reached last year when unit sales of PC games via download outstripped sales of boxed games in stores for the first time, according to research firm NPD Group. Only Nintendo, Microsoft and Sony have larger footprints in the gamer community.
Valve's site, Steam, has 30 million customers downloading PC games and add-ons. Valve has done the same thing with PC videogames. ITunes, Amazon and Netflix reshaped their slices of the media business by moving people from physical stores to the Web. Newell was already one of the most clear-eyed seers in the digital economy even with bad corneas. It reminded me of how fast the future is coming at us and from what unexpected directions."
"The thing that snuck past my defenses was that not only could I see again but I could see better than I ever had before.
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