Steam - hypothetical bankruptcy discussion - split from FAQ

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jabberwalkee_

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thirdgeek said:
Furthermore, if the game will be patched in the event that Steam is deactivated, will such a patched version also be offered in the event that a purchaser’s Steam account is terminated by Valve (particularly in instances where the reason for termination is entirely unrelated to Civilization V)?
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I can answer the first part of this question. Valve have said

"Unless there was some situation I don't understand, we would presumably disable authentication before any event that would preclude the authentication servers from being available.

We've tested disabling authentication and it works."

But, in the unlikely event valve goes broke AND nobody buys steam AND nobody turns it off, you can almost guarantee that a hacker (or more likely an ex-employee) would figure out a way to do this given that there are now over 1000 games on steam.

Not a concrete answer, I realise, but in reality it seems impossible that a situation where you would be unable to play steam games for that reason would come about and if it did it wouldn't last very long.
 
I have read that statement posted here multiple times and either the specific Valve person doesn't understand bankruptcy or he is not exactly telling the truth or both.
In the event of a Valve/Steam bankruptcy no one will remove the DRM - since anyone doing that would be held liable for any perceived damages, no bankruptcy court on this planet would allow a company that goes bankrupt to willfully destroy its remaining assets - no matter whether they can actually be sold in the end. If Steam goes bankrupt and no one takes over operations the notion that they would as a last act remove their DRM is so far out there that I cannot even start conceiving that a company official, much less a founder of a company wouldn't know that this statement is on the same level as other fairy tales.
 
ori said:
I have read that statement posted here multiple times and either the specific Valve person doesn't understand bankruptcy or he is not exactly telling the truth or both.
In the event of a Valve/Steam bankruptcy no one will remove the DRM - since anyone doing that would be held liable for any perceived damages, no bankruptcy court on this planet would allow a company that goes bankrupt to willfully destroy its remaining assets - no matter whether they can actually be sold in the end. If Steam goes bankrupt and no one takes over operations the notion that they would as a last act remove their DRM is so far out there that I cannot even start conceiving that a company official, much less a founder of a company wouldn't know that this statement is on the same level as other fairy tales.
Click to expand...

Sorry, but Valve declaring bankrupcy and no1 wanting to buy it is just as unlikely as Microsoft declaring bankrupcy and no1 wanting to buy its IP. Get real.

btw: how do you imagine Valve would become insolvent if their only fixed expenses are for +-200 emplyees and all other cost (server bandwith) is related to Steam working and selling games (with nice profit from every transaction - they get 30% of price paid by customer, which is much more than expenses related to provide that service to final customer).

Also that quote is from Gabe Newell (owner of Valve and all related IP) which he posted long time ago Steam when all games there were his own IP so he could do whatever he want with their DRM. Even now he have right to modify/terminate need to authenticate Steam client (because its his IP) as long as he isnt breaking contracts with publishers.


If you want to discuss Valves possible bankrupcy more, provide realistic scenario for that to happen.
 
Rebel44 said:
Sorry, but Valve declaring bankrupcy and no1 wanting to buy it is just as unlikely as Microsoft declaring bankrupcy and no1 wanting to buy its IP. Get real.
Click to expand...

There have been many large corporations that no one thought could possibly go bankrupt, and then later did (just think of all the banks in recent years, or the airlines such as Pan Am). It is a valid concern that they could go bankrupt at some point in the future. One such plausible scenario I can think of that would cause them to go under is a natural disaster that wipes out their servers. And in this case, it might not even matter if someone wants to purchase their IP, if it's not even physically available any more.

I think the more relevant question is "what happens if the Steam servers are unavailable for an indefinite amount of time"?
 
gmbfly98 said:
There have been many large corporations that no one thought could possibly go bankrupt, and then later did (just think of all the banks in recent years, or the airlines such as Pan Am). It is a valid concern that they could go bankrupt at some point in the future. One such plausible scenario I can think of that would cause them to go under is a natural disaster that wipes out their servers. And in this case, it might not even matter if someone wants to purchase their IP, if it's not even physically available any more.

I think the more relevant question is "what happens if the Steam servers are unavailable for an indefinite amount of time"?
Click to expand...

"Small problem" with your theory is that Valve/Steam have over 100 servers spread all over the world. So what you describes it total Moderator Action: Watch your languague please
Please read the forum rules: http://forums.civfanatics.com/showthread.php?t=422889, this is not some company with 2 emplyees and 100€ in their bank account. Why dont you and other complainers get relevant info first and after that start creating those paranoid scenarios?

Banks were playing russian roulette with borrowed money - thats big difference compared to Steam which only offer their service/goods, recieve orders from its customers and send them their data, while it takes 30% of final price for providing its service. You have to realize that Steam/Valve have very little fixed cost.
 
Rebel44 said:
"Small problem" with your theory is that Valve/Steam have over 100 servers spread all over the world. So what you describes it total BS. Why dont you and other complainers get relevant info first and after that start creating those paranoid scenarios.

Banks were playing russian roulette with borrowed money - thats big difference compared to Steam which only offer their service/goods, recieve orders from its customers and send them their data, while it takes 30% of final price for providing its service. You have to realize that Steam/Valve have very little fixed cost.
Click to expand...

Being a professional system administrator, I realize there are ways to plan for natural disasters, etc. I was simply providing a few examples of how something some people think as "impossible" could in fact be possible. But if you want something that's also "unlikely", but certainly possible, suppose there is another terrorist attack that happens to knock out several internet backbones. We could play this game for a long time, but the point is, it is still a valid question.

And it's easy to say what happened with the banks, now that we know what happened. In fact, anyone can say after the fact "well obviously if they did/didn't do such-and-such, they wouldn't have failed". It's a little bit harder to say for certain that some company or another "can't possibly fail" (which I recall from recent history has been said of some other companies).

And for the record, having learned more about the authentication Civ 5 will use through Steam, I have no problem with how it will be implemented. Simply asking a valid question doesn't necessarily mean one is opposed to the subject.

I think the real concern here for everyone asking these "paranoid" questions is that it is a new way of doing things [for the Civ franchise], and people are naturally concerned that something may have been overlooked. And you do have to admit, some other companies have used some really questionable authentication methods recently (thankfully, it appears Firaxis is actually interested in making sure they do "the right thing" here).

So, can we leave the insults at the door and just focus on the questions relevant to the topic of this thread? (I think I've made my point here too, so I'm done with this question)
 
gmbfly98 said:
Being a professional system administrator, I realize there are ways to plan for natural disasters, etc. I was simply providing a few examples of how something some people think as "impossible" could in fact be possible. But if you want something that's also "unlikely", but certainly possible, suppose there is another terrorist attack that happens to knock out several internet backbones. We could play this game for a long time, but the point is, it is still a valid question.

And it's easy to say what happened with the banks, now that we know what happened. In fact, anyone can say after the fact "well obviously if they did/didn't do such-and-such, they wouldn't have failed". It's a little bit harder to say for certain that some company or another "can't possibly fail" (which I recall from recent history has been said of some other companies).

And for the record, having learned more about the authentication Civ 5 will use through Steam, I have no problem with how it will be implemented. Simply asking a valid question doesn't necessarily mean one is opposed to the subject.

I think the real concern here for everyone asking these "paranoid" questions is that it is a new way of doing things [for the Civ franchise], and people are naturally concerned that something may have been overlooked. And you do have to admit, some other companies have used some really questionable authentication methods recently (thankfully, it appears Firaxis is actually interested in making sure they do "the right thing" here).

So, can we leave the insults at the door and just focus on the questions relevant to the topic of this thread? (I think I've made my point here too, so I'm done with this question)
Click to expand...

I am not saying that its cant ever happen. I am just tired of dumb paranoid theories which are often posted in this forum. Steam permanently going out of business is so unlikely anytime soon that I am not worried about it.
 
Rebel44 said:
Sorry, but Valve declaring bankrupcy and no1 wanting to buy it is just as unlikely as Microsoft declaring bankrupcy and no1 wanting to buy its IP. Get real.

btw: how do you imagine Valve would become insolvent if their only fixed expenses are for +-200 emplyees and all other cost (server bandwith) is related to Steam working and selling games (with nice profit from every transaction - they get 30% of price paid by customer, which is much more than expenses related to provide that service to final customer).

Also that quote is from Gabe Newell (owner of Valve and all related IP) which he posted long time ago Steam when all games there were his own IP so he could do whatever he want with their DRM. Even now he have right to modify/terminate need to authenticate Steam client (because its his IP) as long as he isnt breaking contracts with publishers.


If you want to discuss Valves possible bankrupcy more, provide realistic scenario for that to happen.
Click to expand...

I only replied to the claim that they would remove DRM if going under - they wouldn't unless they liquidate without leaving any debt whatsover, a rather unlikely scenario.
I don't expect them to go bankrupt, though its not as unlikely as you think - and their expenses are almost certainly much higher than you make them out to be - they do need to provide quite extensive server farms. Whether or not they remain profitable in the future depends on all sorts of things that are unknown and even healthy companies have gone under when making false investment choices and the like. Again I never claimed they would go under - I just replied to a poster who used Gabe Newell's post as argument that even in the case they would there would be no need to worry.

What is a ridiculous notion is that in the event of a company going belly up they would destroy or would even be allowed to destroy what little assets they have left - that post by Gabe Newell at no point in time was rooted in reality.
 
ori said:
What is a ridiculous notion is that in the event of a company going belly up they would destroy or would even be allowed to destroy what little assets they have left - that post by Gabe Newell at no point in time was rooted in reality.
Click to expand...

It isn't really an asset. Providing authentication for games that have already been sold provides no value to Valve or the publishers with whom it has contracted. Since the only time this would be necessary would be if they were shutting down their servers, they would not be selling any more games, either, so disabling the authentication would not represent a loss of future assets either.

In fact, the publishers would probably insist that Valve release such a patch, since they couldn't sell any more games either.

That is also entirely discounting the likelihood that, should Valve NOT release such a patch, Firaxis certainly would - it is their game after all and they would be motivated to keep the community active. If millions of civvers disappeared, so would their revenue stream. You can't sell expansions to a game that doesn't work. You also can't sell more copies of a game that requires Steam authentication if the Steam authentication servers are dead. I would be very surprised if Firaxis did not reserve the right to do so should their relationship with Valve ever dissolve.

So if Valve and Firaxis go under at the same time we should be concerned.
 
I don't entirely agree, but do not have time right now for a comprehensive reply. I will try to come back for one later.
In the meantime this is derailing the FAQ thread, so:

Moderator Action: split off the discussion from Steam FAQ thread
 
ori said:
I only replied to the claim that they would remove DRM if going under - they wouldn't unless they liquidate without leaving any debt whatsover, a rather unlikely scenario.
I don't expect them to go bankrupt, though its not as unlikely as you think - and their expenses are almost certainly much higher than you make them out to be - they do need to provide quite extensive server farms. Whether or not they remain profitable in the future depends on all sorts of things that are unknown and even healthy companies have gone under when making false investment choices and the like. Again I never claimed they would go under - I just replied to a poster who used Gabe Newell's post as argument that even in the case they would there would be no need to worry.

What is a ridiculous notion is that in the event of a company going belly up they would destroy or would even be allowed to destroy what little assets they have left - that post by Gabe Newell at no point in time was rooted in reality.
Click to expand...

Valve dont need server farms, what they need to have is being able to provide high speed download to their customers (there is big difference from server farms and bunch of high bandwith servers - HW they need for their service is still pretty expensive but its nowhere near price of server farms). I work for major international ISP and while my specific knowledge of prices for housing such high bandwith servers isnt perfect (all contracts ar under NDA) I know "public" prices (big customers pay much less than that) and its not very expensive when you take into account that most games will on average have around 3GB or less. Valve get 30% from final price and even 30% for 5€ for 10GB game would easily cover expenses of digital distribution (including expected 5+ future redownloads) + nice profit for Valve. Also prices of bandwith are falling every year (at least over here) because of improved infrastructure and because we have to compete for customers.
 
I know if I was filling bankruptcy my 1st concern would be to my costumers :lol:
 
No "people" wouldn't be filing for bankruptcy - Valve would be.
 
Just to reiterate I don't actually believe that Valve/Steam will go under anytime soon. However since they do not release any information about their finances this is not actually based on hard facts but the firm belief that companies like 2k would not tie their games to a DRM scheme if they were not quite certain that this scheme is viable for the life time of the game and with Civ + expansions one would assume a time frame of 4-5 years during which most sales are generated.

That said: I certainly do expect them to have some rather significant expenses beyond the employee number - what those are are just speculation.
As for the DRM = assets part: the verification and enforced connection to the servers does generate some value since it ensures that users can at the very least be contacted for advertisement and conceivably service offers, as such this mechanism would certainly be an asset that would have to be preserved even in case of liquidation until all attempts at selling these have failed and that would almost certainly only be determined after the servers are shut down, as such in the event of the company going under it is very difficult to conceive a way that Steam would release all the games from DRM, especially since such could only be done after making sure that the respective publishers would allow this to happen. This does not preclude the publisher from doing so - but I would not rely on it either since even if small it would involve some expense and they would likely only do that if they expected this expense to generate some revenue down the road.
 
People need to realize that:
a) In a developed economy when a company goes bankrupt, a very high proportion of the time this means its investors lose their money, the assets get sold and then continue as a going concern.
Bankruptcy doesn't necessarily mean the end of of the service.
b) Even without relinquishing DRM or anything like that... if the worst happened and Steam was about to go down forever, any individual player could just go into Offline mode, permanently. No action from Valve required.
 
Ahriman said:
People need to realize that:
a) In a developed economy when a company goes bankrupt, a very high proportion of the time this means its investors lose their money, the assets get sold and then continue as a going concern.
Bankruptcy doesn't necessarily mean the end of of the service.
b) Even without relinquishing DRM or anything like that... if the worst happened and Steam was about to go down forever, any individual player could just go into Offline mode, permanently. No action from Valve required.
Click to expand...

My problem with B is if I buy a new computer, or my hard drive fails, or any number of things happen, I can no longer play my games. So if that is their solution, its a crummy one at that. On the topic at hand, I dont know much about steam/valve, but I also dont know what will happen in 10-15 years. The chance of me still playing this game that far in the future may not be high, however I do like to revisit old games. Right now Im not worried, but in 10-15 years I might be saying, "Damn you steam".
 
Ahriman said:
Bankruptcy doesn't necessarily mean the end of of the service.
Click to expand...

It could mean a number of other things though.
For example, charging a subscription fee for provision of the service. After all, it's not free to run.
 
My problem with B is if I buy a new computer, or my hard drive fails, or any number of things happen, I can no longer play my games. So if that is their solution, its a crummy one at that.
Click to expand...
Agreed. But its doomsday delayed, not doomsday immediate.

For example, charging a subscription fee for provision of the service.
Click to expand...
We'd have to check the legal fine print to know if it was even possible for them to charge you a fee to use a game license you have already purchased.

Mechanically this would be hard too, unless they hardcoded a failure system into offline mode or fee cancellation.
Otherwise you go offline and play your game for free.
If you have to reinstall on a new computer, you pay the subscription fee for a month, install your game, register, go offline and then cancel your subscription.
 
since offline mode won't work unless the client is updated at the time you set it to offline mode that would actually be fairly easy to accomplish for most players - some (those that are in offline mode at the time of any such change and never leave it afterwards) would get around it, but the majority of players would be forced to participate. And one shouldn't assume that the client would continue working the same way as it does now if such a scheme would be implemented.
Frankly, I do not believe it likely, though I do not believe there are any actual technical problems in implementing such a scheme and it is actually more likely than the company going under for good.
 
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