Valve Corporation

In 2002, Valve launched Steam, a digital storefront and delivery platform. Steam initially offered only Valve games, and was mandatory to install Half-Life 2, but it later became a publisher of third-party games. As Valve became its own publisher via Steam, it transitioned to a flat organization. Outside of executive management, Valve does not have bosses and uses an open allocation system, allowing employees to move between departments at will. In July 2005, Electronic Arts was announced to partner with Valve for a multi-year game distribution agreement, following Vivendi Universal's promise to end distribution on August 31.

After having taken five years to develop Half-Life 2, Valve moved to episodic development, planning to release shorter games more frequently. Half-Life 2: Episode One, the first in a planned trilogy of episodic Half-Life 2 sequels, was released in 2006. Episode Two followed in 2007, alongside the multiplayer game Team Fortress 2 and the puzzle game Portal, developed from the student project Narbacular Drop. In February 2007, Valve announced The Black Box and The Orange Box, both bundles of multiple games and expansions, to be distributed by Electronic Arts for Microsoft Windows, PlayStation 3 and Xbox 360. In January 2008, Valve announced the acquisition of Turtle Rock Studios, which was renamed Valve South. Turtle Rock developed Left 4 Dead and Left 4 Dead 2 while associated with Valve. Turtle Rock Studios spun out of Valve again in March 2010. Forbes estimated that Valve had grossed $70 million in 2005.

Transition to services (2010–2014)

In 2009, Valve hired IceFrog, the developer of Defense of the Ancients, a Warcraft III mod. IceFrog led the development of a sequel not associated with the Warcraft elements, Dota 2, released in 2013. Alongside Dota 2 in 2011, Valve started the International, an annual esports tournament for Dota 2 with a prize pool supported by Valve and funds from microtransactions from battle passes purchased by players. Valve released Portal 2 in April 2011. As with the original Portal, Valve employed a Digipen student team to help develop it; the team behind Tag: The Power of Paint implemented the new gel gameplay. In April 2010, Valve launched Steam for Mac OS X along with ports of several of its games including the Half-Life series.

The Screen Digest analyst Ed Barton estimated Valve's 2010 revenue to be in the "high hundreds of millions of dollars". As of 2011, Valve had an estimated worth of $2 to 4 billion and employed 250 people; according to Newell, this made it more profitable per employee than Google or Apple. Most of Valve's revenue came from Steam, which controlled 50 to 70% of the market for downloaded PC games in 2011.

By 2011, Valve had replaced episodic development with a platform-oriented approach, whereby games such as Left 4 Dead 2 and Team Fortress 2 were continually updated through Steam updates. In June 2012, Valve hired the economist Yanis Varoufakis to study the online economies of their games. That December, Valve acquired Star Filled Studios, a two-person studio, to open a San Francisco office. Valve closed the office in August 2013 when it decided it had little benefit. At the 2013 D.I.C.E. Summit, Newell announced that he and the film director J. J. Abrams were collaborating to produce a Half-Life or Portal film, as well as a possible game.

In the 2010s, Valve released fewer games and invested in hardware development. Newell intended to make Valve more like Nintendo, which develops games in tandem with hardware, allowing it to create innovative games such as Super Mario 64. Valve initially focused on augmented reality, but in 2013 Newell laid off many staff to focus on virtual reality (VR). Valve began porting its games to Linux in 2013, including Half-Life 2 and Left 4 Dead 2. In 2015, Valve released the Steam Machine, a line of gaming computers, which sold poorly. Media commentators speculated that Valve's transition to service provider with Steam, which generated an estimated $3.4 billion in 2017, had driven it away from game development.

Valve canceled games including numerous Half-Life projects (including Episode Three), Left 4 Dead 3, a Soulslike game, and a voxel-based game, A.R.T.I. Additional VR projects included SimTrek, developed by members of the Kerbal Space Program development team, and a new VR device, Vader, that was determined to be too costly for consumers. According to the designer Robin Walker, the abundance of projects that failed to gain traction, with no shared vision, damaged morale. Many players grew frustrated in anticipation of a new Half-Life game.

Source 2, virtual reality and Half-Life: Alyx (2015–present)

Valve announced the Source 2 engine in March 2015, and ported Dota 2 to Source 2 in September. That year, Valve collaborated with the electronics company HTC to develop the HTC Vive, a VR headset released in 2016. Valve experimented with VR games, and in 2016 released The Lab, a collection of VR minigames.

Valve recognized that many players wanted a more ambitious VR AAA game, and began exploring the development of a major VR game. They developed several prototypes, with three further VR projects under development by 2017. Finding that the portal systems of its puzzle series Portal were disorienting in VR, it settled on Half-Life. Walker said that Half-Life 3 had been a "terrifyingly daunting prospect", and the team saw VR as a way to return to the series.

Full development of a VR Half-Life game started around late 2016, with the largest team in Valve's history. Valve acquired the 3D audio software developer Impulsonic in January 2017. In April 2018, Valve acquired the independent developer Campo Santo, known for the 2016 adventure game Firewatch. Campo Santo planned to develop its own games under Valve, though it initially helped develop Half-Life: Alyx.

In November 2018, Valve released Artifact, a digital collectible card game based on Dota 2, with design by Richard Garfield, the creator of Magic: The Gathering. Artifact had unusual pay-for mechanics to acquire new cards, and did not draw a large playerbase, losing 95% of players months after release. In April 2021, Valve abandoned efforts to reboot the project, saying it had not found enough interested players to justify development. In June 2019, Valve released its second-generation VR hardware, the Valve Index. They also released Dota Underlords into early access, an auto battler based on a Dota 2 community-created mode Dota Auto Chess.

In March 2020, Valve released Half-Life: Alyx, a VR game. It received acclaim and was described as VR's first killer app. Newell said in January 2021 that the success of Alyx created desire within the company to develop more games, and that several were under development. Valve collaborated with Netflix for Dota: Dragon's Blood, an animated television series based on Dota, which premiered in March 2021. In February 2022, Valve released the Steam Deck, a portable game system that runs on Linux-based SteamOS with the Proton compatibility layer that allows most Windows games on Steam to run on Linux without modification. In September 2023, Valve released Counter-Strike 2. It received generally favorable reviews, but player reception was mixed.

In 2024, Valve began beta-testing a new multiplayer game, Deadlock, a combination of a hero shooter and MOBA. In September, staff members from Hopoo Games, developers of Risk of Rain, announced that they had been employed at Valve.

According to a report by Forbes Australia published in December 2024, Valve had an annual revenue of $5 billion by 2023, with a 40% profit margin. Steam accounted for around 60% of this revenue, double that of 2019.

In November 2025, Valve announced a redesigned Steam Controller and Steam Machine and a new VR headset, Steam Frame. They were scheduled for release in early 2026, but were delayed by the RAM crisis. The second-generation Steam Controller was released on May 4. In June 2026, Valve released the Steam Machine, its first dedicated living room gaming PC since the original Steam Machines introduced in 2015. The company launched the device with a randomized reservation system because of limited production caused by global memory and storage shortages, with prices starting at $1,049 for the base model.

In September 2026, around 12TB of data was extracted from Steam, including complete games, beta versions and prototypes dating between 2003 and 2013, from both Valve and other third-party developers. The anonymous person that disseminated the data claimed it was available without protection from older Steam servers used during that period, which Valve since transitioned from.

On August 1, 2012, Valve announced revisions to the Steam Subscriber Agreement (SSA) to prohibit class action lawsuits by users against the service provider. By July 2014, there were over 3,400 games available on Steam, with over 150 million registered accounts by January 2018.

Alongside these changes to the SSA, the company also declared publicly the incorporation of Valve S.a.r.l., a subsidiary based in Luxembourg. Valve set up a physical office in Kirchberg, Luxembourg. According to Valve's project manager Mike Dunkle, the location was chosen for eCommerce capabilities and infrastructure, talent acquisition, tax advantages and central geographic location – most major partners are accessible, 50% within driving distance.

Valve S.a.r.l. was used to sell games to UK users to avoid paying the full 20% value-added tax (VAT). The tax loophole was expected to close on January 1, 2015. In December 2015, the French consumer group UFC Que Choisir initiated a lawsuit against Valve for several of its Steam policies that conflict or run afoul of French law. One of the reasons was for using the tax loophole. Valve S.a.r.l. ceased business on January 1, 2017, with the main company taking over EU sales again. In August 2017, Valve announced that Steam had reached over 67 million monthly and 33 million daily active users on the platform.

Steam Machine

Newell has been critical of the direction that Microsoft has taken with making Windows a closed architecture similar to Apple's products, and has stated that he believes that the changes made in Windows 8 are "a catastrophe for everyone in the [personal computer] space". Newell identified the open-source Linux platform as an ideal platform for Steam and said the only thing holding back its adoption is the lack of games.

In 2012, Valve announced that they were working on a console-PC hybrid for the living room, dubbed by media as the "Steam Box". A precursor to such a unit is SteamOS, a freely available Linux-based operating system that builds upon the Steam client functionality that includes media services, live streaming across home networks, game sharing within families, and parental controls. SteamOS was officially announced in September 2013 as the first of several announcements related to the Steam Machine platform as well as its unique game controller. In May 2014, Valve announced that the company's own SteamOS-powered Steam Machine would be delayed until 2015 due to problems with the game controller. In 2015, Alienware, ZOTAC, and CyberPowerPC launched its versions of the Steam Machine. By June 2016, fewer than half a million had been sold. While the Steam Machine line has been effectively canceled, Valve continued to manufacture and sell Steam Controllers until late November 2019, and publishes both mobile apps and software for the Steam Link, allowing in-home streaming.

Steam Controller

Valve has released two versions of a game controller aimed to be used for Steam games, the Steam Controller. The first model was released in November 2015, alongside the original Steam Machine concept, while the second was released in May 2026 ahead of Valve's dedciated Steam Machine model and Steam Frame. Among other features, both generations of the controller use two small trackpads with haptic feedback which can be used either as traditional controller actions like a joystick, but also like a computer mouse input to control many personal computer games that lack traditional controller support.

Valve Index and virtual reality

At the Game Developers Conference in March 2015, Valve and Taiwanese electronics company HTC unveiled SteamVR and the HTC Vive—a virtual reality platform and a virtual reality headset. The platform would be distinguished by its "Lighthouse" motion tracking system, where sensors on the headset and its included motion controllers read the position of two base station devices mounted in the play area. This would allow for "room-scale" VR experiences, where the player would not be required to remain in a stationary position in front of a camera and would be able to freely walk around the space.

In November 2017, Microsoft added beta support for the SteamVR service for Windows Mixed Reality headsets. In June 2019, Valve released its own VR headset, known as the Valve Index, positioned as a higher-end device with wider field of view and higher refresh rate. They were accompanied by updated motion controllers, which are strapped against the user's palms and have sensors to detect input pressure and individual fingers. In November 2025, Valve announced the Steam Frame, a standalone VR headset.

Steam Deck

Announced in July 2021, the Steam Deck is a hybrid game console similar to the Nintendo Switch. It is primarily a handheld device that supports playing of Steam games, but through a separate dock unit, the console can output to an external monitor and use external power, networking, and USB accessories connected to the dock. The hardware is based on customized AMD Zen 2 and RDNA 2 chipsets. Units started shipping in February 2022. An OLED version of the Steam Deck was released in November 2023; besides the improved display, the OLED modeling includes increased battery life, improved audio, and more storage compared to the original model.

PowerPlay

PowerPlay was a technological initiative headed by Valve and Cisco Systems to decrease the latency for online games, announced in January 2000. It was described as a set of protocols and deployment standards at the router level to improve performance. It was claimed that a player with 1000 ms ping was able to play against another player on a LAN connection with no noticeable disadvantage. Initially the protocol was to be released with PowerPlay 1.0 focusing on quality of service (QoS) and later a revision, PowerPlay 2.0 that would focus on functionality. Cisco and Valve intended to deliver a single dial-up service in Q1 2000 in the United States with a 30-day free trial with a bundled copy of Team Fortress modified to support PowerPlay.

The standard was to involve purchasing PowerPlay approved Cisco hardware and infrastructure that had adequate bandwidth and QoS standards that prioritize PowerPlay gaming packets at all others' expense. Newell conceded that Internet service providers (ISPs) would bear the brunt of this expense: "The ISPs are going to need to spend a fair amount of money to be compliant with PowerPlay. But how they get that back is up to them. Some will have a tiered service, and some will just try to recoup their investment through reduced customer churn and customer acquisition." Despite never deploying the dial-up plan featuring PowerPlay 1.0, Valve announced in January 2001 that the standard had indeed been finalized. 12 months after its announcement, PowerPlay was abandoned.

Pipeline

In July 2013, Valve announced Pipeline, an intern project consisting of ten high school students working together to learn how to create video game content. Pipeline serves to discuss and answer questions that teenagers often ask about the video game industry, and see if it is possible to train a group of teenagers with minimal work experience to work for a company like Valve. The latter purpose breaks Valve's tradition of employing experienced developers, as the company is not good at "teaching people straight out of school".

In 2014, mobile developers Lilith and uCool released its games Dota Legends and Heroes Charge, respectively. Both were influenced by Dota and the sequels. In 2017, Valve and Blizzard took joint action against these companies, citing copyright issues related to the Dota names. uCool argued that the Dota games were a collective work and could not be copyrighted by anyone in particular, but the presiding judge, Charles R. Breyer, felt that, due to the trio's actions as maintainers of the Dota mods, they had a rightful copyright claim to this. Separately, Lilith and uCool argued that Eul had, in a forum post from September 2004, assigned an open-source copyright license to Dota, which would make Valve and Blizzard's copyright claims void. The case was later heard by a jury.

ACCC v. Valve Corporation

The Australian Competition & Consumer Commission (ACCC) announced it was taking action against Valve in 2014. On March 29, 2016, Valve was found guilty of breaching Australian consumer law because:

Valve claimed consumers were not entitled to a refund for digitally downloaded games purchased from Valve via the Steam website or Steam Client (in any circumstances);

Valve had excluded statutory guarantees or warranties that goods would be of acceptable quality; and

Valve had restricted or modified statutory guarantees or warranties of acceptable quality.

During the prosecution of this case, Valve implemented a refund policy for Steam purchases, but the case still reviewed Valve's actions prior to the onset of the lawsuit. The court overseeing the case sided with the ACCC in assigning a A$3 million (about US$2.1 million) fine against Valve in December 2016, as well as requiring Valve to inform Australian consumers of their rights when purchasing games from Steam. Valve appealed the court's determination that it "engaged in misleading or deceptive conduct and made false or misleading representations about consumer guarantees", as well as seeking to appeal the fine, but the Australian higher courts rejected the appeals in December 2017. In January 2018, Valve filed for a "special leave" of the court's decision, appealing to the High Court of Australia. The High Court dismissed this claim in April 2018, asserting that Valve still was liable under Australian law since it sold products directly to its citizens.

UFC Que Choisir v. Valve Corporation

Consumer rights group UFC Que Choisir, based in France, filed a lawsuit against Valve in December 2015, claiming users should be able to resell their software. The High Court of Paris ruled in favor of UFC Que Choisir in September 2019, stating that Valve must allow the resale of Steam games. Valve stated it will appeal the decision.

In 2022, the Court of Appeal of Paris overturned the lower court's decision, ruling in Valve's favour. In 2024, The French Supreme Court later confirmed this ruling, citing the EU Copyright and Information Society Directive 2001.

Skins gambling

Valve was named as a defendant in two lawsuits in June and July 2016 related to third-party gambling sites that use the Steamworks API to allow betting with the virtual currency of cosmetic weapon replacement textures, better known as "skins", from Counter-Strike: Global Offensive, which through these sites can be converted from or to real-world money. Both suits assert Valve aiding in underaged gambling. Valve subsequently stated it has no commercial ties with these sites, and that it would demand these sites cease their use of the Steamworks API as they violate the authorized use policies. In October 2016, the Washington State Gambling Commission required Valve to stop the use of virtual skins for gambling on Steam, stating they would face legal repercussions if they failed to co-operate. On October 17, 2016, Valve sent a letter to the Washington State Gambling Commission stating that it had "no business relationship with such gambling sites", asserting that they come into existence, operate, and go out of existence without its knowledge and consent, adding that it was not aware of any such law that Steam or any of its games were violating.

Anti-competitive practices

In February 2017, the European Commission began investigating Valve and five other publishers—Bandai Namco Entertainment, Capcom, Focus Home Interactive, Koch Media and ZeniMax Media—for anti-competitive practices, specifically the use of geo-blocking through the Steam storefront and Steam product keys to prevent access to software to citizens of certain countries. Such practices would be against the Digital Single Market initiative by the European Union. While the other five companies named are in stages of settling with the EU as of August 2019, Valve has stated it plans to fight the charges, asserting that geo-blocking affects less than 3% of its games, and that it had turned off such geo-blocking within the EU in 2015.

In January 2021, five gamers filed a proposed class-action antitrust lawsuit in California against Valve, alleging that the company "abuses the Steam platform's market power" by requiring game developers and publishers to enter into a "most favored nation" agreement with Valve, restricting their ability to sell games for less on other platforms and thereby preventing price competition. This suit was later consolidated with the Wolfire Games lawsuit.

In May 2021, Wolfire Games filed a proposed class-action antitrust lawsuit against Valve, alleging that the company exerts monopoly power over the PC gaming market and uses its "gatekeeper role" to "wield extreme power over publishers of PC Desktop Games" and to extract "an extraordinarily high cut from nearly every sale that passes through its store." Although a motion by Valve to dismiss the original lawsuit was granted in November 2021, Wolfire was allowed to file a revised complaint, and in May 2022 US District Court Judge John C. Coughenour ruled that that lawsuit could proceed, finding that Wolfire's allegations were "sufficient to plausibly allege unlawful conduct." In November 2024, it was affirmed into a class-action lawsuit, with any developer affected by Valve's revenue cut able to be part of the class.

In June 2024, Vicki Shotbolt, a children's digital rights activist, filed a lawsuit with the Competition Appeal Tribunal in the UK that accuses Valve of "rigging the market" for PC games, alleging that Valve used its market dominance to overcharge 14 million people in the UK and seeking damages of £22 to £44 per affected customer, or £656 million in total.

Valve Corporation v. Zaiger, LLC

In 2023, Valve sued a law firm, Zaiger, alleging that it attempted to extort settlements from Valve by threatening to bring numerous antitrust arbitration cases on behalf of Steam customers, a tactic referred to as "mass arbitration". Valve also brought suit against a litigation financier for Zaiger over the funding of a social media campaign to recruit Steam users as clients. Valve alleged that it improperly interfered with its contracts with Steam customers and abused the arbitration process by signing up clients with the intent of obtaining settlements slightly lower than the cost of arbitration filing fees, rather than arbitrating their claims. Valve said that it was targeted due to the terms of the Steam Subscriber Agreement, in which Valve would be responsible for the fees and costs associated with arbitration. The lawsuit was dismissed without prejudice by the US District Court for the Western District of Washington in 2024 due to personal jurisdiction issues. In September 2024, Valve changed its Steam Subscriber Agreement to require disputes to proceed in court, specifically in King County, Washington, with no option of arbitration.

Valve Corporation v. Rothschild

In 2015, Display Technologies LLC, one of several IP-holding companies owned by Leigh Rothschild, sued Valve over patent infringement. While the suit was dismissed by January 2016, Valve shortly followed by acquiring licenses to twenty patents owned across Rothschild's firms.

Around 2022, another Rothschild company, Patent Asset Management, began sending Valve demands to buy new licenses to two of the patents Valve already had licensed. Valve filed a lawsuit against the company in 2023 under Washington state's Patent Troll Protection and Consumer Protection Acts. In the months that followed, at least three lawsuits were filed in Texas by Rothschild's companies against Valve accusing Valve of additional patent infringement. Valve argued these suits were retaliatory to their Washington suit, and requested them to be dismissed. In February 2026, a jury found in Valve's favor on all counts.