Newell: Half-Life 2 on Xbox Was a Disappointment

Half-Life 2 was one of the most critically acclaimed first-person shooters (or games of any genre, for that matter) on the PC in the last several years, and while the Xbox port was generally well received and provided a serviceable experience given the hardware limitations, for some reason the game failed to meet Valve's commercial expectations. In a recent interview with Game Informer magazine, Valve founder and managing director Gabe Newell lamented the port's lackluster sales.

"That product was the first big retail disappointment we've had in the history of the company," he said. "So that sort of caused us to scratch our heads a little bit. We've never missed our forecast on any significant product before, so the fact that that product under performed by somewhere between the factor of two to three was really surprising to us. We still haven't figured out what the hell that meant."

The combination of slow sales of the Xbox version and the shortage situation of the Xbox 360 seems to have soured Newell on the console market, at least for the time being. "There's certainly certain technology investments that we're interested in, and we'll continue to make, but right now it's sort of hard for us to get excited about the Xbox 360's install base, and the PS3 slipping so that's where we are," he said.

Newell also took the opportunity to share his views on the growing importance of digital distribution: "I think you have to be careful. Digital distribution is not a portal. It's not a different way for people to be a publisher. It's tools for developers to connect with their audience. And I would be really surprise[d] if, twelve months from now, any title doesn't have some form of digital distribution strategy. It's too valuable to developers and publishers and to consumers for people not to be doing it right now."

He continued, "I think there were a lot of fears about backlash from distribution. But now any concerns that people might have had about that pretty much went away when Microsoft was standing up and saying, 'We've gotta do this. We've got Arcade.' And Sony is saying a key competitive feature of the PS3 is our better digital distribution strategy than Microsoft's. 'Hey, we have a hard drive guaranteed in all of our boxes. That's going to help us be a better connected gaming client than the Xbox 360.' I think that's giving everyone a lot of comfort that this is a reasonable thing for them to be exploring and shipping to their customers."

Newell was also asked about why Valve planned Half-Life 2's story the way they did with upcoming episodic content. "We thought it was a good way to structure the story. We spent a lot of time thinking about how the story needs to progress into the future," he explained. "We've got it mapped out for a long ways in terms of the story archs. There are issues that need to be resolved from Half-Life 2 and there's a story arch that we're going to propel you through the episodes. And then there are longer term plot issues that the ground work is going to get laid. So we have a lot of storytelling to do. (laughs) We have more story to tell than we have ways of communicating them right now."

The full interview, which discusses Steam, HL2: Episode 1 and more, is available here.