SESSION 6

OPENING THE VALVE: FROM SOFTWARE TO HARDWARE

SECTION B, ROLL NO. – p39071

Valve software, a company that specializes in making online gaming platforms and in-house
games was co-founded by Gabe Newell in year 1996 on the backgrounds of his work at
Microsoft because unlikeness towards hierarchical organizational structure that was prevailing
there. Valve initially started with developing its own console but with increasing rise of open
platform of Windows on PC’s it shifted its Strategic goals towards PC gaming. Valve was
basically involved in providing open source gaming platform to its customers in order to develop
in-house games and reach the market, which not only provided as the platform to the new gamers
to promote their games but also to stream there. It proved to be instant hit.

Organizational structure of Valve was completely different; unlike Microsoft it had open, non-
hierarchical with no job titles. They had a Prospector strategy and focused on innovation, taking
risk and seeking new opportunities and failures were not de incentivized in the company. Each
individual in the company was a specialist and leader. They had a system called “cables” where,
individuals can form their own teams known as cables and work on a project that they think will
be of most benefit and also choose leaders that they think would be worthy enough for the
project. This resulted in productivity, better employee development and gained competitive
advantage in the industry.

But things changed dynamically after arrival of Windows 8, where PC’s open character was
disrupted and so valve decided to bring in their own hardware, but it came with lot of hands on
problem like now in hardware incomplete design cannot be put up in market for feedback which
can be feasible in software and dilemma like whether to adopt same or different process for
manufacturing the various different components, whether to go for mass manufacture and
consoles, since it was not in position to do so because of its existing organization structure.

In order to be in market and have claim a in the industry it is important for the valve to get into
contract with EMS for its hardware and consoles and it itself should maintain with its cables
model which would mean employees who are not currently working to be in productive role.
This would also improve employee development and make them more diverse.