Newell: Valve beats Apple, Google in profit-per-employee

Not short on charming revelations, finance-bible Forbes' new article on Valve head Gabe Newell leads with a shot of the big guy himself, standing atop the company offices in Bellevue and hefting a chaingun. Sure, it's a replica – even Denis Dyack hardly ever brings genuine, loaded weapons to an interview – but the three-page profile paints Newell as one of the industry's most powerful figures, strapped or no. By his reckoning, there are standards by which Valve outperforms leaders in the tech field.

Above: Newell addresses GDC 2010

Newell is notoriously private with concrete figures as to the company's profitability or growth: never publicly traded or venture-capital funded, Valve is accountable to nobody but Valve (though the article points out that modder-friendliness has made Steam gaming profitable for players, too). However, there are some boasts he can't resist making: on a profit-per-employee basis, Newell says his company's doing better than Apple or Google. The stock-analytics site ADVFN puts Google's profit per employee at $1,256,740 for the last year, and Apple's at $1,320,244. A year ago, business blog 37Signals had both companies more profitable-per-employee than Amazon, Facebook or Ebay – putting Valve at the top of an impressive pile.

Above: Half-Life 2, still arguably Valve's signature title

Besides business boasts, the article is the classic nerd-made-good story: asked the secret of Valve's success, EA CEO John Riccitiello cites Newell's “brilliance” and “sharp insights” without neglecting a “maniacally focused” attitude toward success. Slowly losing his sight to Fuchs Dystrophy, Newell had his “dead-people eyes” replaced by fresh corneas over 2006-2007, prompting a clear vision of “how fast the future is coming at us and from what unexpected directions.” Seeking to temper long hours at a screen, Newell took up machining, so as to custom-build swords and iPad accessories.

Above: Updates for Left 4 Dead 2 and Team Fortress 2 keeps gamer interest in Valve/Steam high

Above: Portal 2 is one of GamesRadar’s most anticipated games of 2011 

But whereas gaming billionaires – a club Forbes estimates Newell may well have already joined – would once get rich young and blow their wad on bling and sports cars, Newell shows no signs of abandoning his long-term plan. That maniacal focus kept the company from venturing into casual-ware or mobile games: short-term goldmines that Newell says would likely have bankrupted the company in the bigger picture. Even Tony Bartel, CEO of GameStop – a business obviously threatened by download gaming on the level provided by Steam – can't help praising the platform's success. As Forbes noted, though, Valve actively competes with retailers like GameStop: when you're that powerful, you can afford to play nice.

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