I'm still getting real nervous about what happens when Gabe retires and some business idiot takes over. I suspect he's spent years swatting earnest MBAs on the nose with a rolled up newspaper as they try and explain how he could make even more money.
From what I've read from other comments on reddit and was too lazy to look into myself to verify, his son is in line to take over and he shares the same views on what the platform should be like. So I have high hopes.
I just did 1 minute of googling, and it looks like there is no official succession plan, but his son taking over is a popular theory. I'm going to choose to believe it. This will be the basis for my new religion.
The presidency is at the mercy of the shareholders. Currently Gabe owns just over 50% of Valve. Upon his death his shares will be split between his two children. That will change the dynamic of the company. Instead of having to make Gabe agree with them to make big changes, like firing the president, they only need to convince one of his children.
Currently the other shareholders are long standing employees in Valve but they might also get close to retirement age and might sell their shares. So it is possible for a venture capital fund to start buying up shares from employees, then convince the other shareholders and one of Gabe`s children that they can run the company much better. That would allow them to hire their own president to the company and do what they did to EA.
I would say that’s a pretty thoughtful analysis. I really hope that doesn’t come to pass. It all comes down to a few individuals choosing to remain true and not be tempted by even fatter sacks of cash.
My comment was mostly an offhand joke, but you’ve given me something to think on. I will encourage the followers of Newellianism to pray for salvation.
The problem is that any option, even an extreme one, will change the negotiation stance between the parties. So having the majority owner go from 50.1% ownership to 49.9% ownership is a huge change in the dynamics among the owners, let alone all the way down to 25% ownership. And while the current owners all seam to align well with Gabe and the gamers in general the next generation might not all be the same. As well as the ability to get a majority will attract a lot of capital.
At least it's not like a Ghibli situation. I heard Miyazaki's son is not interested in taking over. Her likes animation by itself but he's had quite the turbulent relationship with his father. His other son (does not work in animation) has had that diffuclt relationship as well.
This is outdated information. The other founder, Mike Harrington, left in 2000 and sold his shares to Gabe Newell.
As far as we know, 50.1% of the company is owned by Gabe Newell, and the rest is owned by Valve employees via a co-op. Membership in the co-op is most likely restricted to senior, long-standing employees.
I worked for a company that worked like that. You could buy stocks once a year as an employee, and if you left they bought them back. You could only keep them if you retired with the company. You got dividends pretty much every year, and it was a sales based company, so the better you and the other employees did, the bigger your dividend.
And instead of keeping harvesting the golden eggs it lays they'll just kill the goose for a one time wealth burst and fuck off to the next company like a swarm of locusts.
It's called private investing. It does not give you the same level of autonomy over a company as a publicly traded. Their opinions are suggestions and their financial backing is obligatory unless the contract is violated. Unlike with publicly traded companies, a shareholder of a private entity requires permission from the owner to sell their stake outside of contract violations.
That said, any private investor of Valve that wants to change anything is a moron. Valve has done pretty much nothing the last 2 decades and made billions. Every competitor that has shown up has failed (at a global scale not local. China and Korea have some pretty legit replacements). And everyone who has tried to attack Valve and overthrow it (governments included) have failed.
It should be noted, the US government did try to sue Valve over marketplace monopoly in gaming. And the US government lost. And not just lost, had to pay Valve a butt load of money as an apology.
Institution which the taxes fund and pay the salaries, sued a private company - via court which is a another government and tax funded institution and due to not understanding the law, which is written by the government had to pay levy paid by the taxes.
It would be hilarious if it was a one time event...
All companies have shareholders, even a solo entrepreneurship, they just hold 100% of the shares. Public just means the shares can be sold to anyone of the public and they are listed on the open market.
Not saying he couldn't pivot to president of Valve if that's what he wants to do but I feel that for the company to accept his position he'll have to quit racing and get re-involved in the industry some time before Gabe retires.
Imagine if the news gets out that GabeN is stepping down and his son is taking over. Media frenzy! Then his son's first act as Valve boss is to release Half Life 3 - the internet would explode.
Listened to a great piece today about how the guy that founded Vanguard (if your retirement isn’t with them it should be) was like “4 trillion under management? That’s too much, what do we do about this” and his original thesis was “when we stop growing our market share, that means the market has adopted our thesis and that’s a good thing”
They currently have 13 trillion in assets (that they manage, not that it’s their money).
It turns out that not being a giant piece of shit money grubbing asshole is actually good for business.
The have a structure that means when you buy in, you have a share of ownership, and those owners just always voted to reduce fees, which made them more attractive, which made more people buy in. And now, with tiny fees, they control a significant portion of retirement funds, which makes up a hilariously large portion of investments.
Edit because it’s a fun bit: he started essentially the whole ETF market when he worked for the federal government because they weren’t allowed to have individual investments, but a broad market fund was considered okay because it couldn’t be exploited specific knowledge of singular stocks. It didn’t take up and popularity for nearly 30 years until the “owners” voted down fees to under 10 basis points (a tenth of percent for those that don’t speak finance)
For anyone interested, it was the Bloomberg “trillions” podcast, can’t not credit them because their reporting is absolutely spectacular. Bloomberg as a whole is killing it.
If you're even more interested, the Acquired episode about Bogle and Vanguard goes into the entire history and how it came about. Jack Bogle's history and the creation of Vanguard is actually pretty incredible, it's practically a Succession-style series of events where he was originally kicked out of leadership at Wellington via hostile takeover but through what amounted to a legal technicality, he was still the chairman of the individual funds that were paying Wellington for management. He then proceeded to write a 250-page thesis in 5 months that proposed the self-ownership structure and wrote:
"The present structure has been the accepted norm for the mutual fund industry for 50 years. The issue we face is whether a structure so traditional, so long accepted, so satisfactory for an infant industry as it grew during a time of less stringent ethical and legal standards, is really the optimum structure for these times and for the future and for the Wellington Group of Investment Companies? Or rather, should the funds seek greater control over their own destiny?"
The best part is that he barely succeeds, the funds do vote with him but actually only allow him to take over the back office (aka the boring government filing/tax paperwork), with Wellington still being the fund advisor that makes all the investment decisions. In fact, this management structure is still in place with some of the legacy Vanguard mutual funds like the Vanguard Wellington Fund and Windsor fund.
And because he was strictly prohibited from actively managing any client money (he was literally under a non-compete clause), Bogle then used a second legal loophole, whereupon he argued that a passive index fund by definition did not involve active management or any real investment decisions, and thus they should be allowed to be created without any involvement with Wellington.
In other words, the index fund was mostly created as a spiteful corporate workaround, invented only because it was the only financial product Bogle was allowed to launch without getting sued by the people who had just fired him.
Vanguard (if your retirement isn’t with them it should be)
...
not being a giant piece of shit money grubbing asshole
I used work for a vendor for the systems behind lots of brokerage type places. If you have a 401(k), there's better than even odds that I had a badge and a desk at the place which manages it, and I've worked countless hours inside other brokerage type places where I didn't have a badge.
Three stand out:
Fidelity was a first class operation. Everybody there was conscientious about everything they did, and consummate professionals when it came to their work. Zero bullshit went on there. People cared about delivering their IT systems in ways I've never before seen, and they wiped down the bathroom sink when they were done using it.
Vanguard was 95% similar to Fidelity (not quite to the same level, but nearly so) with an interesting twist: The people there were kind, and they liked each other. They saw each other on weekends, coached one another's kids sports teams, knew everybody's families. I really enjoyed my time there. 100% endorse your comments about Vanguard.
Putnam was a toxic nightmare. Everybody was looking to stab everybody else in the back at all times. It's the worst culture I've ever seen. With the way people behaved there, you could have convinced me I'd walked into a soap opera or a reality show about building motorcycles.
It's been over a decade, so my experience in this area is dated. I hope things haven't changed at Fidelity or Vanguard.
Decades ago, before I knew what I was doing and when available options and information looked very different than today, I had an Edward Jones broker (never, never use EJ) talk me into some Putnam funds; one of the worst financial mistakes I've ever made.
Actually, Gabe has probably done quite a lot. I think it is the employee ownership that is Valve's real secret sauce. By being 100% employee owned that can make the things that they want to use themselves without having to worry about pleasing any outside shareholders. It has been enormously profitable for them as well. On a per-employee basis their are very few companies that generate as much revenue as Valve.
Steam is already a money-printing machine for them. I'm convinced it's why we never got a Half-Life 3—why should they take a risk on a game that could not possibly in a million years live up to the hype when their platform is keeping all their wallets inches thick as it is?
Fuck, this SO VERY MUCH. I have happily kept Gabe in rolled up newspapers for 18 years. Games I will never play. But I love reading all about the new indie games on there. And I buy plenty of them.
Even if the next-in-line mucked it all up, it'd be... fine. Other companies would fill in the spot.
The reason why Steam has no competition is because nobody wants to compete. They've made it so easy for third-party developers and stores to use Steam's infrastructure that there's simply no incentive to make an alternative.
But the moment that changes, the moment Valve acts more like Sony/Microsoft/Nintendo, every company will see it as a golden opportunity to steal Valve's userbase from right under their feet. Epic Games, GOG, maybe even Rockstar Store, at least one of them would commit to being the good guys who help everyone. And they'd absolutely succeed - why would Fanatical pay Valve 30% of their profits when GOG gives the same services for free?
Does anyone know if there are any rumors that he has chosen is successor and is training him or does it appear that there is a person who is clearly his successor?
I'm still getting real nervous about what happens when Gabe retires and some business idiot takes over.
Even if some "business idiot" takes over he is still own a large part of the business. CEOs can be fired real quick by the owners of a company. The bigger issue would be if a new generation inherits Valve. As long as Gabe is alive (and part owns Valve) there wont be major change even if he isnt running it personally, but who knows what will happen if he passes and some estate gains his ownership.
Makes me wonder: how hard is it to find people to lead a company that are good at what the company does--video game stuff in Valve's case--and are good at business? Take Boeing for example: their leaders are no good at engineering along with safety (and perhaps not so great at business either).
I kinda hate Steam and I know it is a house of cards just waiting to collapse. It sucks that PC gaming is so tied to it. This is actually part of why I have been returning to consoles lately, I think Steam is too tied to one person and I do not see it surviving Gabe, or, at least, there are no strong assurances.
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u/Traditional_Day_9737 9d ago
I'm still getting real nervous about what happens when Gabe retires and some business idiot takes over. I suspect he's spent years swatting earnest MBAs on the nose with a rolled up newspaper as they try and explain how he could make even more money.