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http://pc.ign.com/articles/608/608600p1.html

Valve Jettisons Vivendi

The companies settle suits -- and Valve emerges independent.

by David Adams

April 29, 2005 - Valve announced today that it has settled its pending lawsuit with Vivendi Universal Games, including dismissal of all claims and counterclaims in the long-running court battle. As part of the settlement, VU Games will cease distributing retail Valve titles starting August 31, 2005.

Additionally, Cyber Cafes previously licensing Valve games from Vivendi must now license the titles directly from Valve.

Valve has not announced a new publishing partner, or whether the company will now solely rely on Steam for distribution. A new publishing agreement would almost certainly be needed for the Xbox version of Half-Life 2 scheduled for release later this summer.

Today's announcement not only brings to a close a legal battle which began in August 2002 with Valve disputing Vivendi's cyber café licensing -- and leading to a counterclaim from Vivendi that Valve's Steam service violates distribution agreements. More significantly, this marks one of the first times a developer has gained such independence from a publisher. Not only has Valve kept full control of its intellectual property, but it is now free to choose another publishing arrangement, or handle distribution entirely on its own.

That's significant in a time when many independent studios feel bullied by publishers, often losing support for, or control of, their properties. Interestingly, Valve gained its strong position not only with an exceptionally strong product, but by taking advantage of digital distribution. Valve's independence may signal a new trend in the industry, one which deemphasizes the power of publishers, enabling independent studios to succeed (or fail) on their own terms.

We expect to hear more details from Valve soon. Stay tuned.

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not surprised Valve got out of the deal with Vivendi for upcoming products.

[speculation]

Obviously for the Xbox version will require a publishing partner, lest Valve is willing to front the per unit royalty to Microsoft thereby establishing itself as an independent publisher. But that would be difficult and expensive as Valve would need a sales force to at least execute sales deals with retailerl. Sure, Xbox version of HL2 is probably an easy sell, however it still takes effort to manufacture, distribute and market the product, something Valve may not have the capacity, time or expertise to do so. HOWEVER, if I were Valve I would take a long look at it and explore the economics. If there is a way, then it would be worth it in the long run because then Valve would be in a much stronger position to make what they want, when they want and distribute however the hell they want. It wouldn't be the first small developer/publisher, but it would be the most concentrated in terms of product quality to number of products ratio.

[/speculation]

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Well we are at a clear turning point at the time in game industry.

There are several things that affect the work indy developers, the growing popularity of MMORPGs has made people buy their games from internet, since many smaller MMORPGs distribute their games only through internet they are accustomed to this kind of distribution and there already are few sites on the internet that try this kind of distribution method and are somewhat succesful.

This opens a whole new channel to get the games to gamers with minimal expenses.

Other thing that I am actually excited (even tho many gamers sneer the idea) is the in-game advertising. This not only immerse the game world but creates revenue for the developer, it's not long till the qestin of "how much will the developer buy for the rights to use product X's name in the game" it will be "how much will the product X buy to get his name in the game" and this makes things easier for the developer as a source for extra money for the game development.

As for Valve, they have been an innovator in the industry, and I'm sure they are up to something, we just have to wait and see.

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