Microsoft purchasing Valve

Microsoft needs help when it comes to exclusive games for the Xbox One, and acquiring developers or publishers with a great game selection is the easiest way to get that help.

But Valve is an unlikely source of relief for Microsoft. Valve doesn’t need the money, and few people involved with the company, studio head Gabe Newell included, have any reason to sell. But it’s still reported that Newell owns the majority of Valve, and it often appears from the outside as if Valve is more or less on cruise control. If Newell wanted to focus on something else in his later years, this would be a good chance to make a clean break while pocketing a fortune.

Besides, Newell wouldn’t be the first person who has claimed not to like Microsoft only to be convinced by a huge check.

But what would Microsoft get with that purchase?

Steam owns a huge chunk, if not the majority, of PC gaming in the United States. People use the service to buy games, developers use the service to sell games and Valve takes a cut of everything that happens on the platform. Microsoft is interested in PC gaming for the obvious reasons, but it lacks the exclusive games that would draw players to its own substandard online stores and services. That would change overnight if Microsoft controlled Steam.

But buying and selling games is only part of Steam’s value, as Microsoft would also control one of the most useful means of collecting user data in all of gaming. Microsoft would learn about what hardware is in the systems of players who agree to share that data, and it would know what games people are playing and for how long. If data is power these days, Steam is the equivalent of a nuclear bomb stuffed with hundred-dollar bills.

Gabe Newell Steam Machine reveal

Gabe Newell Steam Machine reveal
Gabe Newell would have to be convinced to sell to Microsoft
 Christopher Grant/Polygon

That metaphor may have gotten away from me a bit, but you understand what I mean.  Microsoft would profit from every sale on the platform, while also being able to cash in on the data it could learn from player behavior.

It might be hard for Microsoft to convince its shareholders to pay that much for a company so strongly centered on gaming, when that hasn’t historically been a major profit center for the company, but CEO Satya Nadella has spoken about the company’s upgraded interest in gaming.

“We’re mobilizing to pursue an expansive opportunity in the 100+ billion gaming market,” Nadella stated near the end of 2017. “This means broadening our approach to how we think about gaming end-to-end. About starting with games and how they’re created and distributed, and how they’re played and viewed.”

And Valve would earn Microsoft money from day one while pouring data into Microsoft’s brain. These two things in concert would make one hell of a slide deck for anyone skeptical of the acquisition internally.

That’s not to mention the profits generated from games like Dota 2 and Counter-Strike: Global Offensive, which would allow Microsoft to be a major player in competitive gaming from the first day it took over Valve’s assets. Microsoft would be grabbing control over games that pull in ridiculous amounts of money while also gaining a leadership position in the growing world of esports.

Which brings us to the last point about this potential acquisition: Microsoft would gain the mother of all exclusives.

Laugh all you want. Star Wars was a joke too, until Disney bought Lucasfilm and threw money and talent at bringing the franchise back. And that seems to be going OK.

Half-Life 3 has been a running joke in the video game industry for so long that it’s hard to imagine anything actually happening with it, but that’s mostly because Valve itself doesn’t have much of an incentive to go back to the series. The company is making too much money on everything else to “waste” time or energy on a follow-up to one of the most beloved games of all time.

But Microsoft sure as hell has a reason to invest in Half-Life 3 if it were ever given the opportunity.

Imagine a future in which Microsoft owns Valve and puts Half-Life 3 on the development fast track, throwing money at the original creative team and aiming for an “exclusive” release on Windows PC and Xbox One. PC players wouldn’t even lose anything because they’d finally be getting the sequel they always wanted, and they would be able to buy it on Steam. A version of Steam that’s controlled by Microsoft, sure, but the point stands.

Hell, Microsoft could ship it as part of a Purple Box with Left 4 Dead 3 and Portal 3, which are other series that have sat dormant as Valve rakes in the cash from its other ventures. Valve is sitting on a wealth of IP that’s severely underutilized, and Microsoft has all the reasons in the world to bring all these exclusives out of retirement.

Microsoft needs to make a big move to try to take control of gaming, and the most powerful console in the world is just one step toward that goal. Buying Valve, for whatever the cost would be, would help the company in every possible way.

The acquisition would likely pay for itself with time, Microsoft would have access to the data of all those PC gamers, and the exclusives problem would disappear with the day-and-date announcement of Half-Life 3’s development.

Look at it this way: Why bother buying PUBG when the game is already a timed exclusive on your platform and you could instead own the store on which it’s sold? Microsoft would have a lock on the PC gaming space in a way it can only dream of right now, and all it would take is this one acquisition.

Is this going to happen? It’s unlikely, but it’s not impossible. And Microsoft is just the company to write a check with enough zeroes to make it happen.

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