Is Google Getting into Gaming?

By Josh Catone

Edit: Via one of our commenters, Valve has said this is purely fiction.

According to the Inquirer, Google is closing in on a deal to acquire Valve, a US-based video game development house, and more importantly, creator of the highly popular video game content distribution system called Steam. Even though we’ve recently wondered if Google was losing focus with too many projects that don’t contribute to its core business of search, acquiring Valve and Steam might make some sense.

Steam is a beloved digital content distribution engine in the video game industry. There are hundreds of games available on Steam and generally about a million users logged into the system at any one time. When we wrote about why people pirate software in August, independent game developer Cliff Harris wrote that, “Lots of people claimed to pirate because it was easier than going to shops. Many of them said they pirate everything that’s not on [Valve’s] Steam. Steam got a pretty universal thumbs up from everyone.”

Users love it. Developers love it. It’s an efficient system, provides a ton of valuable user data, and a hook into a $42 billion worldwide business that is expected to grow to $68 billion by 2012. Sure sounds like a fit for Google, and would definitely help them in their mission to control organize the world’s information.

72% of Americans play video games — which is more than use Google — but just 42% play online. That number is growing however, and video games are an industry that Apple is now entering with its refreshed iPhone/iPod Touch line and that Google rival Microsoft has a major foothold in with its Windows monopoly and Xbox 360 console system.

Google also quietly announced plans to introduce a developer API to Lively, its recently launched online 3D virtual world, which would allow developers to create mini arcade games playable inside the world. Lively creative director Kevin Hanna told a small crowd at Austin GDC’s WorldInMotion event that the eventual goal was a complete toolkit for creating full 3D games distributable through Lively.

Acquiring Valve’s Steam content distribution engine and Source 3D engine might be helpful in seeing those plans through to fruition.

  • Shady Aidy

    I had Half-Life running on my old XP machine, using Steam, but I haven’t played it in a long while.

    Since I built a new PC earlier this year, running Vista Ultimate 64 and installing The Orange Box, Steam became the most irritating piece of s/w I’ve ever voluntarily installed.

    Intermittent refusal to authorise me as a player, and every Steam enabled game I bought on physical media refused to install from the media it was purchased on, and would only download all of the content for the game, which through a 2mb connection took a *long* time.

    Also, I just want to play the damn game! I don’t want to have to wade through screens of choose this and that, I just want to double click the icon on desktop that matches the game I want to play and play!

    Admittedly I haven’t played any games for a while, been too busy, so it’s possible that the experience could have improved, but based on my experiences with The Ornage Box, I would much prefer not to have Steam installed if I could help it.

  • Just one more step in taking over the world.

  • Raj

    I am guessing Eric Schmidt will give his model for Dr. Breen in Half Life 2 Episode 3.

    Replace the citadel with GooglePlex, Gordon Freeman with Bill Gates in a Hazard Suit – That works.

  • “Steam is a beloved digital content distribution engine in the video game industry.”

    Am I missing something here? Last time I checked Steam sucked hard and gamers hated it. When did this change?

  • Valvue has killed this rumor already.
    Vavle kills Google buyout rumor

  • Geez, I can’t spell today.

  • automatic_ab

    Yeah, I agree with Reaper2047. But this could be good for Valve Development. I mean, having Google sized finances couldn’t possibly be a bad thing right?

  • @slaction: 15 million users seem to disagree….

    @Reader2047: Thanks, I’ve updated the post with a link to that Kotaku story.

  • Jay

    Does that mean we will see Adsense in newer video games? ;)

  • I think it’d be more accurate to say users put up with Steam because it’s the only way to play Valve games. It’s actually a really annoying piece of software.

  • Foxhound

    not sure about Valve thing, but i know google is into gaming

    – Google made Lively
    – Sony announced they will have in-game advertisement in PS3 Home and other games
    – Sony was talking about Google at E3, don’t know what was said tho..

    they will either offer ingame ads to developers or maybe they will buy a game developer to start by themselves first..

  • @Josh Catone

    15 million users is a bit misleading…Any person who has purchased Half-Life 2 or one of the episodes has been forced to use Steam to play the game. That doesn’t mean they are active users and that certainly not how the users should be measured.

  • mejiac

    “Sony announced they will have in-game advertisement in PS3 Home and other games”

    It’bad enough that we get bombarded with ads when surfing the web…will we also have the same effect with games?

    Will the ads be specific to age gender?

    Any thoughts?

  • Microsoft is in the in-game ad business too. They bought Massive for $200-400 million a couple of years ago. Sometimes, in-game ads can make a lot of sense and actually add to the realism (billboards in racing games, ads on the sides of buses in Half-Life, product placement (like soda machine models), etc.) or they can be unobtrusive (like a “Sponsored by XXXXX” in the waiting lobby of a network game).

    And, Sony is using DoubleFusion for their PS3 in-game advertising.

  • Foxhound


    they wont be the same annoying way, maybe more like advertisement in the movies, as in a big car shows in the scene and a big brand name on the car

    another example in Metal Gear Solid 4 you can use an iPod in the game

    don’t know for sure how is it gonna be, but it seems like for big bucks only :D

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