Secrets Valve doesn't want you to know

Valve used to be a game developer. Then, it became the owner of the largest online market for PC games, a PC-console hybrid distributor, a proponent of in-home VR for gaming and design, a manufacturer of PC peripherals, and a (part-time) game designer. Valve has done some sketchy things to increase its bottom line. How sketchy are we talking? Judge for yourself.

Valve made a killing on the CSGO gambling scandal

Back when Valve made video games, Counter-Strike combined collaborative and competitive gameplay styles into a new, objectives-based teamwork-driven game with a unique terrorists versus counter-terrorists gimmick. Valve's latest addition to the series, CS Global Offensive, introduced gun skins — purely cosmetic textures that add nothing to the gameplay — available for purchase.

CS GO skins have spawned third-party, "not gambling" sites for not making wagers, not filling pots, and definitely not collecting payouts of skins and cases on virtually every aspect of CS GO matches. By law, kids can't actually gamble — but it's totally cool for them to "not gamble." Naturally, all the "not gambling" these kids did netted Valve a whole lot of moolah during the three years before the company sent out cease-and-desist letters to the third-party "not gambling" sites.

Let's say you're a poker chip manufacturer. (In this thought experiment, your name is Joe/Jane Valve.) In your factory, you make poker chips, which you call skins. Some of the skin chips come in cases — if one of your customers acquires one, and wants to see what's inside, that person can pay a case-opening fee to your company. Upstairs, there's a desk from which an employee on your payroll gives advice on how a casino can get the most out of your company's poker-related paraphernalia. Three years ago, the employee upstairs was made explicitly aware that poker chips from your factory have been used in the casino for gambling purposes.

In addition to manufacturing skin poker chips and cases, you make a gadget called an API, which lets skin poker chip purchasers exchange massive amounts of chips with each other for a fee. Your API gadget enables casinos to shuffle chips around in bulk, giving your company the house's cut each time. Suddenly, after three years of quiet complicity (and amassing millions of dollars from gambling-related transactional fees), your company announces that every single casino in town has ten days to shut down, quit using your API gadget, and either abandon the skin poker chip game altogether, or face court for violating the company's official anti-gambling policy.

For Valve, it seems clear that money often speaks louder than ethical obligations.

Valve took way too long to respond to Digital Homicide's misdeeds

Digital Homicide appeared out of nowhere in 2014 with Slaughtering Grounds, a cobbled-together buggy mess of a shooter. well-dressed game critic / sentient lawn gnome Jim Sterling played it, hated it, mocked it (link contains NSFW language), and thus began a drawn-out back-and-forth between Sterling and the so-called developer. Digital Homicide used nonsensical copyright claims to get Sterling's reviews temporarily taken off YouTube. Later, Digital Homicide's delightful Romine Brothers would sue Sterling for $15 million, for defamation and causing damage to their business.

During this time, more unsavory details emerged raising more uncomfortable questions. For instance, had Digital Homicide used shell companies to bypass Steam's safeguards against multiple submissions from third-parties? (Yep.) When (allegedly) scam operations such as Digital Homicide masquerade as independent developers, the entire software development industry suffers.

But none of that compared with what the Romine brothers did next. A public figure like Sterling is one thing, but in 2016 DH filed suit against 100 regular Steam reviewers, seeking to publicly expose — and bankrupt — private citizens for writing product reviews. This was finally too much, even for Valve, who dropped DH after two years of ignoring what they were up to. Their actions came as a shock to followers of the scandal — not because banning a developer is a rare and extreme action for Valve to take, and certainly not out of some sort of displaced respect for the unlikable indie studio. Nope, the surreal part was that Valve decided to any action at all against Digital Homicide, probably because they couldn't make money off them anymore.

Valve is notoriously litigious--and it's coming back to bite them

A 2012 welcome handbook for Valve employees makes the claim that, unlike most software companies, "Valve owns [all of] its intellectual property." As for how the company acquired its IPs, that was accomplished "[thanks] to some legal wrangling with our first publisher after Half-Life shipped." By the way, that "legal wrangling" spanned three years and caused a ton of headaches for everyone involved. That doesn't stop Valve from gloating about it.

Perhaps you know that Valve's legal team has had teeth since 2002, when it began a drawn-out legal battle with Vivendi Universal – Half-Life's original publisher — for complete control over how Half-Life and other Valve-developed games could be sold. Settled in 2005, the battle resulted in the establishment of what some have called Valve's "monopoly" on digital distribution. Score one for the then-little guy. (They grow up so fast, don't they?)

You might not know the extent to which that decision has affected Valve's trajectory from small developer to a massive, multifaceted corporation that dominates the PC gaming market. It's Valve's own drive for corporate control over the software industry that has driven co-founder/head honcho Gabe Newell's company away from software development, and towards the hardware industry. Valve understands dominance, not coexistence and healthy competition.

Greenlight, once indies' only hope, holds devs back now

For independent developers, it used to be that the only thing worse than a world with Greenlight, was a world without it.

Shortly after it launched, Greenlight on Steam endowed its content creators with direct access to Valve's customer base, and a tried-and-true method of digital distribution. Indies would finally be given a chance to compete with AAA developers! Shame it hasn't worked out that way, as Greenlight's democratic voting system of moving the most popular (and therefore, "best") through Greenlight and onto Steam quickly degenerated into a cesspool of cynics, opportunists, impulsives, and idiots.

As Greenlight became an institution, it lost its identity to Valve's arbitrary, bureaucratic meddling. Dishonest voting practices have allowed garbage devs to push objectively wretched wares past the safeguards and onto the Steam store. Imagine being an honest, hard-working dev whose only hope for success is getting through Greenlight. Now, imagine watching your pixel-perfect masterpiece languish in semi-obscurity (and your savings disappear). That has been the reality for too many indies — for every brilliant treat like Snowflake's Chance, there's a shameless asset-flip like Grand Crime Gangsta Vice Miami (link contains NSFW language, in case the game's title didn't clue you any).

Valve says it is putting the kibosh on Greenlight, presumably because fixing it would be too much work. The company's successes with digital distribution have emboldened its competitors to create Steam-like clients of their own, resulting in a world where Greenlight is obsolete. Desura, itch.io, Humble, and CD Projekt RED's GOG store have shown the market for DRM-free, non-Steam versions of Steam games is a large one indeed. Let's hope they have learned from Greenlight's mistakes.

The Better Business Bureau has no love for Valve

At press time, Valve has an F rating from the Better Business Bureau. For those who've forgotten how school works: that's low.

Many older complaints stem from the pre-Steam Guard years, when Steam had no refund policy, and account-theft was a regular occurrence. With digital software distribution — where the exchanged items consist of a credit card number, a license, and a data stream — refunds should be simple. But for years, Valve met requests for refunds with convenient silence.

Meanwhile, Greenlight and Early Access saturated Steam's market with buggy, glitchy, vaguely game-shaped monstrosities that pretended to be quality products. It took an Australian court charging Valve $2.1 million to finally inspire the company to craft a reasonable refund policy. What will it take to resolve some of the other complaints? One hundred BILLION dollars?

Newer complaints allege that Valve offers minimal assistance should an account be hijacked. In fairness, the newly added Steam Guard, with its two-step verification process, has substantially increased security for users. But that's just preventative — what if your account has already been compromised? According to several complaints, that's when Valve's forum-based, mostly peer-to-peer customer service's inadequacies become most glaring. Simply put, there is no customer service line. For gamers 1,000+ games in their library, the thought of suddenly losing access to all their games overnight is nightmarish — the thought that such a theft could be permanent, leaving you without any real recourse to prove you're not you horrifies us. "How am I not myself, Valve?"

Per the BBB's Valve page: "On July 1, 2013, BBB notified the company of the complaint pattern. To date, the company has not responded to BBB's request to address the pattern." Another unanswered grievance, par for the course for Valve. Let's hope they change that — and soon.

The company's esports involvement has been disastrous

Why does a money-driven, powermad company like Aperture Science — er, Valve — promote allegedly free-to-play titles like Dota 2, the store's most downloaded and played title to date? The answer's a two-parter: e-sports and in-app purchases.

Valve's ill-fated e-sports ventures deserve our scrutiny. Although the prize pots for Valve's exclusive Dota 2 tournaments continue to grow, the streaming broadcasts have been amateurish and garbled. Mic issues, problems with pacing and staging, poor technical direction, equipment failures, and one abysmal host have conspired to tarnish the whole stadium-gaming affair.

The International Dota 2 Championship and Valve's newer championships, the Majors, make an implicit argument against the very structurelessness that Valve prides itself over. Take, for instance, the public humiliation and dismissal of host James Harding, as covered by Vlad Savov of The Verve. Harding had been expected to host and provide commentary but, without meaningful preparation, Harding bombed, telling inappropriate jokes and ultimately getting himself fired in the middle of another live event.

Asked about it later during a Reddit AMA, Gabe Newell diplomatically said, "James is an ass," and stated that his company had cut ties with the former host. Newell's eagerness to trash Harding in public strikes us as another indication of the company's allegedly "high school" environment. In this light, the 2000 decision of Valve's other co-founder, Mike Harrington, to leave the company to sail the high seas makes total sense. We, too, would rather deal with real sharks than sharks in the boardroom.

The flat structure is a lie

When Valve says, "structure happens," emphasizing its project-specific, informal hierarchies, what they're really saying is, "Structure doesn't exist until we say it does." Then, like the job sector's equivalent of a neutrino, it snaps into reality, until the paperwork goes through to fire you. By the time you've cleaned out your desk (and rolled it back to where you found it), the structure vanishes again.

Valve's former employees have spoken out against what they allege to be a cliquish corporate culture, made all the more frustrating by the company's claims of flat organization. There's no evidence that Valve's "cabals" — informal teams of designers — magically appear based on employees' shared goals, yet mountains of exculpatory evidence exist to suggest a pecking order behind the scenes.

Former Valve employee Jeri Ellsworth says she "found out the hard way is that there is actually a hidden layer of powerful management structure in the company… [It] felt a lot like high school. There are popular kids that have acquired power in the company, then there's the trouble makers, and everyone in between." She struggled to thrive in the :unstructured" environment. Recruiting became an issue, too. "We would interview very talented people but they would be rejected by the old timers at Valve as not fitting the culture … [Valve] promised me the world and then backstabbed me." No wonder she left in 2013 to work on the CastAR.

Valve's partnership with GameStop isn't about convenience, it's about sewage seeking its own level

Valve and GameStop couldn't be more different. GameStop has built an empire on resale of used games. Valve opposes the very idea of reselling games. And yet, in 2015, Valve joined forces with GameStop, even though their undying devotion to disc-based distribution makes it a natural enemy of Valve's digital distribution philosophy.

Against seemingly all reason, GameStop has installed physical in-store sections dedicated to selling Steam gift cards and Steam Machines. It's all the convenience of shopping online, minus the actual convenience, and plus the annoyances of shopping in-person. The main purpose of a Steam Corner isn't to sell Steam gift cards, but rather to convince console gamers to drop $1,200 on a Steam Machine, the magic of which is SteamOS, the under-supported official operating system of Valve.

To recap: Valve thinks GameStop shoppers will spend 3x what they paid for their PS4s on a glorified gaming PC with a janky OS, that can't even run all the games available on Steam — and the worst part is, they might be right.

Valve doesn't just allegedly discriminate, it also stiffs its contractors

In April 2016, an English-to-Spanish translator formerly employed by Valve filed a lawsuit alleging discrimination against her for being transgender. She claims to have been called "it" by other Valve employees following her reassignment surgery.

The full story is much more complicated — and potentially even more scandalous. According to Valve, on the condition that she resign to become an independent contractor, the company granted her request for a transfer to Los Angeles, where she later underwent reassignment surgery and worked remotely while recovering from the surgery and "related disabilities including depression." She claims to have complained to her supervisor on behalf of other translators, who allegedly weren't being paid for their work. Shortly thereafter, Valve ended her contract.

The litigant alleges that the change to independent contractor status constitutes, among other violations, "Retaliation, Unpaid Overtime, Unpaid Wages, and Misclassification as an Independent Contractor." Forbes has a breakdown of the case's tax implications and why the "misclassification" allegation could mean a higher payout for the claimant if Valve loses the suit. Simply put, the alleged "misclassification" has major tax implications, since employees get benefits and protections that independent contractors do not.

The stakes are high. In many ways, a simple discrimination suit would be preferable for Valve. If Valve loses, "some [of the payout] may be wages, some non-wage damages on IRS Form 1099, some legal fees paid to the lawyer, and perhaps even some tax-free damages for physical injuries or physical sickness." Even settling the suit would be a tax nightmare.

For a company that prides itself on its diverse image, allegations of discrimination are never good. For a corporation with a history of foreign tax law violations, getting on the wrong side of the IRS would be even worse.