Valve announced recently that it had won the first round in the legal fight between it and publisher Vivendi Universal Games. The US Federal District Court in Seattle has upheld the complaint that Sierra Online (now a part of VU Games) breached its contract with Valve by distributing copies of the company's games in cyber cafés with a "pay for play" system. The court has yet to decided what damages Valve will receive.

"We're happy the court has affirmed the meaning of our publishing contract," said Valve CEO Gabe Newell. "This is good news for Valve and its cyber café partners around the world."

While this decision favored Valve, there are still other outstanding complaints between them and VU Games that have yet to be resolved. Valve made another breach of contract claim, relating to unpaid royalties and the delay of Counter-Strike: Condition Zero past the holiday season in 2003. Vivendi has counter-sued that last claim, stating that Valve was dishonest about the use and development of the Steam online distribution system. This legal fight threated to push the release of the anticipated Half Life 2 into 2005, but that was a decision that likely both companies could not afford to make.