Gabe Newell, head of Valve (Steam), explains in a documentary about the shooter Half-Life 2 that a few years ago they were on the verge of bankruptcy. This was mainly due to legal disputes with the large publisher Vivendi Games.
What kind of action was that? Specifically, this is about a court case where Valve and the publisher Vivendi are fighting over the online distribution rights and, above all, the rights of Counterstrike. For example, Vivendi was allowed to offer Counterstrike in cyber cafes.
To do this, according to the interview, Vivendi hired a law firm that wanted to change Valve’s perspective: “Valve had some success in this case, and that’s why we have to change theirs [Valves] Changing your mindset from “we believe we will succeed” to “we will be destroyed”:
She [die Kläger] personally included Scott and Julie Lynch and Gabe and Lisa Newell, his wife at the time, as defendants, making it appear as if we were driving Valve out of business and bankrupting both of them. And I think that was a big part of what they thought was their path to winning that fight.
Gabe Newell says during the “Half-Life 2: 20th Anniversary Documentary” on YouTube that there was a calculation behind it to demonstrate one’s own power:
Publishers in the industry were used to bullying developers, and this was not just about optimizing financial results, but also about a show of force.
The tactic they used was to take money out of our pockets. They knew how much money we were making from retailing our games, so they tried to inflate our legal costs in order to deprive the company of resources.
[…]
(from 01:05:00) The company was on the verge of bankruptcy. I was on the verge of becoming personally bankrupt. We’re fully committed.
Despite the problems, they didn’t want to bother the developers who were still busy working on the game. This is what the documentary says:
So we didn’t have to think about it. They did a pretty good job of letting the team focus on what they could do without worrying so much about the future of the company.
Commercial for the Joule kitchen appliance with Gabe Newell from Valve
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Vivendi was dissolved in 2008 and merged with Activision
Is Vivendi still around today? No, not in name. In December 2007, the publisher Activision announced a planned merger with Vivendi Games, from which a new holding company called “Activision Blizzard” would emerge.
On July 10, 2008, the merger was completed, creating Activision Blizzard and dissolving Vivendi Games. Today Activision Blizzard belongs to the Microsoft group, which is best known for Windows and its Xbox: Microsoft announces: They want to buy Activision Blizzard