Valve seems to be the only company on this capitalist world that actually understands that company profits cannot and should not grow exponentially forever without eventually destroying itself. All other companies don’t know or want to stop the greed ad are constantly pushing for more profits to see until where they can push the greed and milking without losing “too much” costumers. They even weight the amount of costumers lost vs the extra profits to see if its viable to lose those costumers and still profit, like Netflix. Valve does not work like this. Valve grew to a size, and that size is giving them stable and steady profit. And they are holding that size, slowly growing more here and there but nothing big. The biggest thing they did in like 10 years was the Steam Deck and they will not update it with a Deck 2 anytime soon. Valve plays the very slow, but steady profits game. This is how you win as a company. You try to keep yourself on a balance between good profits and good public perspective.
Being privately held helps a ton. Gabe is his own boss. Once a company’s public they’re beholden to the investors, and investors want big short term returns so they can dump their stock and move onto the next one.
Stocks = certificate of ownership in a fraction of a company. The basic principle is sound and goes back at least to the Renaissance, it’s everything else around it that sucks and creates a plethora of perverse incentives that benefit the capital owners.
Company stocks are not unique there, it’s the most common example but the principle extends to every commodity. You can buy virtual coal or gold right now if you want and sell later, without actually having coal delivered to your doorstep. This is actually a very important market mechanism when it works right because it allows the market to internalize external forces, reducing risk. European energy providers learned this the hard way when prices shot through the roof in 2022 and they were buying gas at “current prices”, leading to funds drying up unexpectedly sometimes to the point of bankruptcy, rather than buying gas at “future prices”, guaranteeing deliveries that were paid for months in advance. When it works well, speculation is actually an inescapable tool of complex modern economies. Without it you cannot maintain supply chains fit for the modern world, as speculation (when not abused) is the market’s way of accounting and preparing for the expected future.
Even in a communist society, you’d need stocks: the disagreement then becomes whether the state should own (part of) the stocks, or if the workers should own all the stocks (legally equivalent to the means of production).
Oh huh, neat. Thanks for the write-up! Basically the only thing I know about stock trading comes from family members trying to convince others to buy meme stocks, so I don’t really have a high opinion of the craft.
I think it is a little more complicated than that. You go to public markets to raise cash. Sometimes you can get the cash you want, sometimes not. The issue is when you are incentivized to make the stock price go up at all costs. If you don’t need the cash, there is no point to having a higher stock price - lower is somewhat better.
Now, if you are a CEO, and you are paid in stock options, you are going to do whatever you can to maximize the stock price. Even if it is bad for thebling term health of the company. I don’t think the public markets care either way.
Valve able to do that because they are private company, the exponential growth is only made mandatory because of the stakeholder. if the growth is stagnant(even with healthy profit), it’s very unattractive to investor, hence growth is needed to keep the cog running.
I wonder, what actual benefits are there in publicly traded companies for society as whole? Benefits that are good for you, me and everyone else equally.
It’s mostly the effect of expanding the company, like more job, better product, etc etc. sometime it help develop the society quicker because they get more capital to do bigger thing and put in research to do better thing or find new thing, but in return you have to promise growth and return to people giving you money to do that thing. i don’t think it’s meant to be altruistic cus it’s not charity.
A bit like the difference between building bigger and unstable houses vs smaller and stable. No idea where you got the charity concept from, i dont think anyone has even mentioned it before.
Sorry, when word “charity” gets mentioned in this context tends to annoy me a lot as sentence “we are not a charity” seems to be like magic word to some that can be used to excuse any shitty behaviour by the company.
Gets you something to add to your 401k portfolio. Which I don’t think is a great argument; there are plenty of other ways to handle retirement even in a fundamentally capitalist system.
There’s a theory out there that as SP500 indices for 401k’s become the dominant investment, that will convince publicly traded companies to think long term. Those indices don’t jump in and out of stocks. They want to add a stock and then keep it for decades. Companies would change their thinking to match.
I’m not convinced of that, though. Starting with the fact that 401k’s started as a tax loophole that got mistaken for a good retirement plan, while traditional pensions and Social Security have been eroded away (to say the least). But it’s a possible outcome.
I think the initial idea of like “I have a great idea but don’t have the capital to get it off of the ground” is a decent argument for public companies, or in the case where employees are shareholders and thus reap reward when companies are successful, but I think these are both mostly antiquated notions and the ills of how public companies are today are a net-loss, and there are generally better ways to accomplish both of these things.
Especially in tech, it’s entirely common to charge nothing, make no money and burn investment money until they end up either so dominant they essentially have monopoly power (think: Amazon) or that the business plan is reach critical mass and hopefully sell. And then the very notion that every business has to grow forever leads to rather perverse incentives. Again, especially if you look at tech, basically all of the FAANG companies used to be a lot better/nicer until some critical mass is hit and then they have to enshittify everything.
Mark my word, once Gabe pass it’s gonna be very very different. We have very different things to worried about, like climate change, but on software side and tech we shouldn’t rely on monopolies. Valve was kept in that state because all the competition didn’t actually put up a fight worth extra investment. The windows store pushed valve to develop SteamOS and Proton, they also back off on some revenue split policy because of EGS’s deals. (Let’s be honest, not all players care about which launcher they use, as long as they get better deals and can play the game they want.)
And to my experience, Steam’s recent years’ updates to store/client are not something I like as well.
I don’t like the gamification of sales event etc.
I don’t like the new unlimited scroll type, they backed off a bit and become like 3 pages long until you hit the top/popular/sales part.
I also don’t like some of the UI changes(ie the downloads/library mixed together and not separate item)
I hated the auto start live streaming thing, if there is option to turn off that please let me know.
For EGS,
their search sucks
library page sucks, you can’t really organize your free games/purchased games etc.
auto updates are pretty on par so that’s okay.
their friends/etc also sucks.(not that I care much but at least it’s far worse than steam one.)
I like that they adopted Nintendo’s gold coin reward type to encourage consumer to purchase there.
games from other big publisher usually do require install their clients as well, which sucks. (it’s similar on steam as well.)
I want to finish reading your post but now I’m just too sad about the thought of GabeN dieing
I will say one of the things i don’t like about egs is nothing similar to steamvr, I still highly enjoy my index and want that industry to do well and refuse to invest in a store with no skin in the vr game.
also, I’m finished with windows forever and steam has native Linux support while egs needs a weird combo of wine, bottles, and lutris to be able to achieve something somewhat similar
that’s right, Linux also have a worrisome spot as shown by RedHat, you can gain sort of dominating position and cut off the older GPL source access. And it would be very dangerous to have some popular distro slowly acquired and then merged into a single one. I am not active Linux user at home but like you I would probably peace out if Windows goes subscription model. (they current pricing I’d still willing to spend a couple hundred and let the OS updated for 10+ years. (windows 10 almost 10 years. )
There is a downloads page, right click on “library” at the top and there is a downloads button that gives you a view of all pending/queued/current downloads etc.
The sales have become less fancy than they used to be? I have seen lots of complaints that the events have gotten worse.
okay, that makes sense now, I don’t know what I did now it shows all the menu items when I hover over the big item. Which is good, hope it stays that way. :)
I used to need to click around to find the download page, or unless I have updated game queued up then it show up at bottom of the UI.
Valve seems to be the only company on this capitalist world that actually understands that company profits cannot and should not grow exponentially forever without eventually destroying itself.
Nah, they are many of them, maybe even the majority of companies are like that (think SMBs). The peculiarity of Valve is that it also managed to become and stay the world leader in its domain, so every nerd knows about it.
Tons of SMEs are world leaders in their domain, you just never heard of them because they produce giant ship propellers, fire hose couplings, surgical instruments, whatnot, not exactly things people not using them ever think about. And of course you don’t have to be a hidden champion to be a SME that owns their market, say, Herrenknecht. Who would be unknown if tunnel boring wasn’t so cool and impactful that there’s tons of documentaries about them doing it.
Coincidentally, I was just reading a news article about Chipotle doing exactly that - raising prices while losing customers.
Even companies that have seen customers pull back due to the higher prices reported higher sales, because those higher prices offset volume declines.
PepsiCo, for example, reported … sales rose nearly 7% to $23.45 billion. The … company said it increased prices globally by 11% on average… In that time, PepsiCo’s volume fell 2.5%.
Nah, that’s just actual inflation. You know the deficit that the government runs on now, and the bug private-sector and general-public bailouts of the last two decades?
Yeah, that’s just printing money. Selling the overall value of the dollar to make ends meet today.
If companies are reporting larger profits after adjusting their prices for inflation then customers are met with inflation that is larger than the reported inflation rate.
No dude. These companies are several decades old and continue to make money hand over fist by exploiting their customers. They do this shit because it makes them a fuckton of money, because their users have no fucking principles or backbone and just lick boots every time they’re stepped on.
I am not an optimistic person but literally the only explanation I have for this sort of thing is altruism. That Valve is a company that simply loves its’ community and doesn’t want to exploit their customers. Nothing else makes sense.
I’m not sure it’s entirely accurate to say these companies aren’t destroying themselves though. Are they just going to explode and die all at once? Probably not, but they will likely fade to obscurity like IBM or HP (two powerhouses of the last century). I agree that exploiting customers is how they make money hand over foot (and we just roll over for it) but the point is to make the largest possible short term gains, not to maximize profit. It’s important to maximize short term gains because it makes big shareholders happy, and the shareholders (e.g., the CEO and the board) want to enrich themselves. The issue with optimizing for short term gains is that you miss out on the dividends of long term effort, which is usually significantly greater.
Something I think about occasionally is how it is that a no-name startup beat the likes of Google, MS, Facebook, etc to chatgpt. Chatgpt is the single greatest innovation in search in almost 3 decades. Google’s whole business relies on users needing Google’s search platform to find information. Google gets to place ads here, and that makes up the largest part of their revenue, but chatgpt threatens to upend that whole business. There is the potential for a whole new generation of advertisement technology to be baked into chatgpt that delivers an unprecedented level of ad targeting. In case you need a translation, that is massive $$$$$$$$, because advertisers want their ads to be placed in front of people who will actually buy the product (and they will pay a premium for this!), not the spray and pray strategy you see today.
So yes, in a way, Google and other companies that rely on simply extracting wealth rather than innovating/building wealth risk losing billions of dollars and eventually fading to irrelevance. I really think Facebook has passed the point of no return already in this regard, and has allowed numerous social media sites to steal market share very easily.
Something I think about occasionally is how it is that a no-name startup beat the likes of Google, MS, Facebook, etc to chatgpt.
Which was immediately absorbed by the anti-consumer company MS for several tens of billions of dollars.
I really think Facebook has passed the point of no return already in this regard
How so? Literally half the planet still checks into Facebook on a monthly basis.
has allowed numerous social media sites to steal market share very easily.
They haven’t stolen market share, they’ve created it. Facebook didn’t lose any users and these other platforms still operate with a tiny fraction of Facebook’s users.
Microsoft didn’t “absorb” open ai, they have a partnership where Microsoft pays assloads of money to sustain openai so that Google doesn’t get it. Ironically, this might be considered “long term thinking” but I wonder how long shareholders will tolerate such a hit to the books. There is supposed to be a profit sharing model here eventually (up to a certain point) but Microsoft isn’t getting chatgpt, otherwise bing would have replaced chatgpt. I have to wonder if, by the time chatgpt is profitable, if there will already be better models produced by other groups (maybe even open source), especially given the pace of AI innovation. I would not be surprised if this was a net loss for MS. GPT is amazing but it has numerous drawbacks at the moment. I admit that, if they figure things out quickly, this could be a huge win for them. I would go so far as to say that this is not anti consumer at all and is exactly how the free market is supposed to work.
As for Facebook, the only data you need is that the younger generations think it’s for boomers and don’t use it. I’m a little older and (to your credit) I check in about once a month. I know that meta has a very powerful user data harvesting business (arguably more valuable than Facebook), but Facebook’s user engagement will continue to slide if they can’t capture younger users and keep millennials and gen x users on the platform. This devalues their ability to make money from ads directly, and again, they did this to themselves by destroying their reputation for short term gains. They will eventually become like Yahoo! or AOL, both of which have almost zero brand value.
Valve seems to be the only company on this capitalist world that actually understands that company profits cannot and should not grow exponentially forever without eventually destroying itself. All other companies don’t know or want to stop the greed ad are constantly pushing for more profits to see until where they can push the greed and milking without losing “too much” costumers. They even weight the amount of costumers lost vs the extra profits to see if its viable to lose those costumers and still profit, like Netflix. Valve does not work like this. Valve grew to a size, and that size is giving them stable and steady profit. And they are holding that size, slowly growing more here and there but nothing big. The biggest thing they did in like 10 years was the Steam Deck and they will not update it with a Deck 2 anytime soon. Valve plays the very slow, but steady profits game. This is how you win as a company. You try to keep yourself on a balance between good profits and good public perspective.
Being privately held helps a ton. Gabe is his own boss. Once a company’s public they’re beholden to the investors, and investors want big short term returns so they can dump their stock and move onto the next one.
Maybe that shouldn’t be possible.
Yep. Investing should tie you to a stock for at least a year - as soon as you decide to sell, the one-year timer starts.
Agree wholeheartedly, there should be risk.
Why is trading stocks even allowed? Seems like a net loss for basically everyone, except the ultra-wealthy.
Stocks = certificate of ownership in a fraction of a company. The basic principle is sound and goes back at least to the Renaissance, it’s everything else around it that sucks and creates a plethora of perverse incentives that benefit the capital owners.
Company stocks are not unique there, it’s the most common example but the principle extends to every commodity. You can buy virtual coal or gold right now if you want and sell later, without actually having coal delivered to your doorstep. This is actually a very important market mechanism when it works right because it allows the market to internalize external forces, reducing risk. European energy providers learned this the hard way when prices shot through the roof in 2022 and they were buying gas at “current prices”, leading to funds drying up unexpectedly sometimes to the point of bankruptcy, rather than buying gas at “future prices”, guaranteeing deliveries that were paid for months in advance. When it works well, speculation is actually an inescapable tool of complex modern economies. Without it you cannot maintain supply chains fit for the modern world, as speculation (when not abused) is the market’s way of accounting and preparing for the expected future.
Even in a communist society, you’d need stocks: the disagreement then becomes whether the state should own (part of) the stocks, or if the workers should own all the stocks (legally equivalent to the means of production).
Oh huh, neat. Thanks for the write-up! Basically the only thing I know about stock trading comes from family members trying to convince others to buy meme stocks, so I don’t really have a high opinion of the craft.
I truly fear the day Gabe passes on. Do we know who would own Valve if Gabe were to pass on today?
I think it is a little more complicated than that. You go to public markets to raise cash. Sometimes you can get the cash you want, sometimes not. The issue is when you are incentivized to make the stock price go up at all costs. If you don’t need the cash, there is no point to having a higher stock price - lower is somewhat better.
Now, if you are a CEO, and you are paid in stock options, you are going to do whatever you can to maximize the stock price. Even if it is bad for thebling term health of the company. I don’t think the public markets care either way.
Valve able to do that because they are private company, the exponential growth is only made mandatory because of the stakeholder. if the growth is stagnant(even with healthy profit), it’s very unattractive to investor, hence growth is needed to keep the cog running.
I wonder, what actual benefits are there in publicly traded companies for society as whole? Benefits that are good for you, me and everyone else equally.
It’s mostly the effect of expanding the company, like more job, better product, etc etc. sometime it help develop the society quicker because they get more capital to do bigger thing and put in research to do better thing or find new thing, but in return you have to promise growth and return to people giving you money to do that thing. i don’t think it’s meant to be altruistic cus it’s not charity.
A bit like the difference between building bigger and unstable houses vs smaller and stable. No idea where you got the charity concept from, i dont think anyone has even mentioned it before.
Charity as in the purpose is purely for the good of society. Unless it’s rhetorical, I merely answer your question.
Sorry, when word “charity” gets mentioned in this context tends to annoy me a lot as sentence “we are not a charity” seems to be like magic word to some that can be used to excuse any shitty behaviour by the company.
I haven’t seen a better product from companies that grow big. I always see the quality go down and users stay because of lock-in.
Gets you something to add to your 401k portfolio. Which I don’t think is a great argument; there are plenty of other ways to handle retirement even in a fundamentally capitalist system.
There’s a theory out there that as SP500 indices for 401k’s become the dominant investment, that will convince publicly traded companies to think long term. Those indices don’t jump in and out of stocks. They want to add a stock and then keep it for decades. Companies would change their thinking to match.
I’m not convinced of that, though. Starting with the fact that 401k’s started as a tax loophole that got mistaken for a good retirement plan, while traditional pensions and Social Security have been eroded away (to say the least). But it’s a possible outcome.
I think the initial idea of like “I have a great idea but don’t have the capital to get it off of the ground” is a decent argument for public companies, or in the case where employees are shareholders and thus reap reward when companies are successful, but I think these are both mostly antiquated notions and the ills of how public companies are today are a net-loss, and there are generally better ways to accomplish both of these things.
Especially in tech, it’s entirely common to charge nothing, make no money and burn investment money until they end up either so dominant they essentially have monopoly power (think: Amazon) or that the business plan is reach critical mass and hopefully sell. And then the very notion that every business has to grow forever leads to rather perverse incentives. Again, especially if you look at tech, basically all of the FAANG companies used to be a lot better/nicer until some critical mass is hit and then they have to enshittify everything.
Mark my word, once Gabe pass it’s gonna be very very different. We have very different things to worried about, like climate change, but on software side and tech we shouldn’t rely on monopolies. Valve was kept in that state because all the competition didn’t actually put up a fight worth extra investment. The windows store pushed valve to develop SteamOS and Proton, they also back off on some revenue split policy because of EGS’s deals. (Let’s be honest, not all players care about which launcher they use, as long as they get better deals and can play the game they want.)
And to my experience, Steam’s recent years’ updates to store/client are not something I like as well.
For EGS,
I want to finish reading your post but now I’m just too sad about the thought of GabeN dieing
I will say one of the things i don’t like about egs is nothing similar to steamvr, I still highly enjoy my index and want that industry to do well and refuse to invest in a store with no skin in the vr game.
also, I’m finished with windows forever and steam has native Linux support while egs needs a weird combo of wine, bottles, and lutris to be able to achieve something somewhat similar
I’m amazed by how far Linux gaming has come, so far my biggest issue is that Logitech drivers are shit and it double types every fucking word
that’s right, Linux also have a worrisome spot as shown by RedHat, you can gain sort of dominating position and cut off the older GPL source access. And it would be very dangerous to have some popular distro slowly acquired and then merged into a single one. I am not active Linux user at home but like you I would probably peace out if Windows goes subscription model. (they current pricing I’d still willing to spend a couple hundred and let the OS updated for 10+ years. (windows 10 almost 10 years. )
There is an option in the settings to turn that off.
edit: Account details -> Store preferences -> Broadcast preferences (at the very bottom of that page)
thank you very much, for people who don’t know it’s “checked” to opt out/disable. (<– this should be illegal. )
I was actually thinking about this the other day, will be a very sad day. Valve is the only company I genuinely can say I’m a fan of.
There is a downloads page, right click on “library” at the top and there is a downloads button that gives you a view of all pending/queued/current downloads etc.
The sales have become less fancy than they used to be? I have seen lots of complaints that the events have gotten worse.
okay, that makes sense now, I don’t know what I did now it shows all the menu items when I hover over the big item. Which is good, hope it stays that way. :)
I used to need to click around to find the download page, or unless I have updated game queued up then it show up at bottom of the UI.
If by live streaming thing you mean the “broadcast” thing, you can turn it off on options.
Settings -> broadcast at bottom of list -> privacy settings -> broadcasting disabled
also, thank you very much, but this one seems to be your broadcasting preference, the other user’s option path is correct.
Ah, you wanted it gone from the storepage. I have them disabled too and didn’t remember they even exist there
Nah, they are many of them, maybe even the majority of companies are like that (think SMBs). The peculiarity of Valve is that it also managed to become and stay the world leader in its domain, so every nerd knows about it.
Tons of SMEs are world leaders in their domain, you just never heard of them because they produce giant ship propellers, fire hose couplings, surgical instruments, whatnot, not exactly things people not using them ever think about. And of course you don’t have to be a hidden champion to be a SME that owns their market, say, Herrenknecht. Who would be unknown if tunnel boring wasn’t so cool and impactful that there’s tons of documentaries about them doing it.
What is a SME or SMB in this context? Mentioning @[email protected] in case you’re not sure what they meant by SMB either.
https://en.m.wikipedia.org/wiki/Small_and_medium-sized_enterprises / businesses
Thanks!
Small to medium business/enterprise.
Thanks!
Coincidentally, I was just reading a news article about Chipotle doing exactly that - raising prices while losing customers.
Isn’t that just price discovery?
I suppose so, but if everyone does it at once within every market sector it seems to just become inflation.
Nah, that’s just actual inflation. You know the deficit that the government runs on now, and the bug private-sector and general-public bailouts of the last two decades?
Yeah, that’s just printing money. Selling the overall value of the dollar to make ends meet today.
If companies are reporting larger profits after adjusting their prices for inflation then customers are met with inflation that is larger than the reported inflation rate.
Is Google destroying itself? Facebook? Amazon?
No dude. These companies are several decades old and continue to make money hand over fist by exploiting their customers. They do this shit because it makes them a fuckton of money, because their users have no fucking principles or backbone and just lick boots every time they’re stepped on.
I am not an optimistic person but literally the only explanation I have for this sort of thing is altruism. That Valve is a company that simply loves its’ community and doesn’t want to exploit their customers. Nothing else makes sense.
I’m not sure it’s entirely accurate to say these companies aren’t destroying themselves though. Are they just going to explode and die all at once? Probably not, but they will likely fade to obscurity like IBM or HP (two powerhouses of the last century). I agree that exploiting customers is how they make money hand over foot (and we just roll over for it) but the point is to make the largest possible short term gains, not to maximize profit. It’s important to maximize short term gains because it makes big shareholders happy, and the shareholders (e.g., the CEO and the board) want to enrich themselves. The issue with optimizing for short term gains is that you miss out on the dividends of long term effort, which is usually significantly greater.
Something I think about occasionally is how it is that a no-name startup beat the likes of Google, MS, Facebook, etc to chatgpt. Chatgpt is the single greatest innovation in search in almost 3 decades. Google’s whole business relies on users needing Google’s search platform to find information. Google gets to place ads here, and that makes up the largest part of their revenue, but chatgpt threatens to upend that whole business. There is the potential for a whole new generation of advertisement technology to be baked into chatgpt that delivers an unprecedented level of ad targeting. In case you need a translation, that is massive $$$$$$$$, because advertisers want their ads to be placed in front of people who will actually buy the product (and they will pay a premium for this!), not the spray and pray strategy you see today.
So yes, in a way, Google and other companies that rely on simply extracting wealth rather than innovating/building wealth risk losing billions of dollars and eventually fading to irrelevance. I really think Facebook has passed the point of no return already in this regard, and has allowed numerous social media sites to steal market share very easily.
Which was immediately absorbed by the anti-consumer company MS for several tens of billions of dollars.
How so? Literally half the planet still checks into Facebook on a monthly basis.
They haven’t stolen market share, they’ve created it. Facebook didn’t lose any users and these other platforms still operate with a tiny fraction of Facebook’s users.
Microsoft didn’t “absorb” open ai, they have a partnership where Microsoft pays assloads of money to sustain openai so that Google doesn’t get it. Ironically, this might be considered “long term thinking” but I wonder how long shareholders will tolerate such a hit to the books. There is supposed to be a profit sharing model here eventually (up to a certain point) but Microsoft isn’t getting chatgpt, otherwise bing would have replaced chatgpt. I have to wonder if, by the time chatgpt is profitable, if there will already be better models produced by other groups (maybe even open source), especially given the pace of AI innovation. I would not be surprised if this was a net loss for MS. GPT is amazing but it has numerous drawbacks at the moment. I admit that, if they figure things out quickly, this could be a huge win for them. I would go so far as to say that this is not anti consumer at all and is exactly how the free market is supposed to work.
As for Facebook, the only data you need is that the younger generations think it’s for boomers and don’t use it. I’m a little older and (to your credit) I check in about once a month. I know that meta has a very powerful user data harvesting business (arguably more valuable than Facebook), but Facebook’s user engagement will continue to slide if they can’t capture younger users and keep millennials and gen x users on the platform. This devalues their ability to make money from ads directly, and again, they did this to themselves by destroying their reputation for short term gains. They will eventually become like Yahoo! or AOL, both of which have almost zero brand value.
Not but they do very much use Instagram.