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Gabe Newell, the co-founder and managing director of Valve, the videogame development and online distribution company, made a rare appearance last night at Casual Connect, an annual videogame conference in Seattle.

Newell, who spent 13 years at Microsoft working on Windows, is not well-known outside of the videogame industry, but the company he has built in Bellevue, Wash., cannot be overlooked.

Valve is not only a game developer, producing megahits like Portal 2, it owns and operates Steam, which is the largest consumer-focused digital games distribution platform in the industry. By some measures, it may be valued at $3 billion.

Last night, at a dinner sponsored by Covert & Co., Google Ventures and Perkins Coie, Newell unveiled some of his most quirky and secretive projects in an interview onstage with Ed Fries, former VP of game publishing at Microsoft.

Newell, who has a desk on wheels so he can quickly roll over to his favorite projects within the company, struggled at times to put into words how he sees the industry shaking out as companies like Microsoft and Apple move toward closed ecosystems. At one point, he even lamented that his presentation skills aren’t up to speed because Valve isn’t a public company.

Here are excerpts from the conversation that took place in a packed and noisy room with an under-powered speaker system:

On the future of videogame distribution

“Everything we are doing is not going to matter in the future. … We think about knitting together a platform for productivity, which sounds kind of weird, but what we are interested in is bringing together a platform where people’s actions create value for other people when they play. That’s the reason we hired an economist.

“We think the future is very different [from] successes we’ve had in the past. When you are playing a game, you are trying to think about creating value for other players, so the line between content player and creator is really fuzzy. We have a kid in Kansas making $150,000 a year making [virtual] hats. But that’s just a starting point.

“That causes us to have conversations with Adobe, and we say the next version of Photoshop should look like a free-to-play game, and they say, ‘We have absolutely no idea what you are talking about, but it sounds really bad.’ And, then we say, ‘No, no, no. We think you are going to increase the value being created to your users, and you will create a market for their goods on a worldwide basis.’ But that takes a longer sell.

“This isn’t about videogames; it’s about thinking about goods and services in a digital world.”

On closed versus open platforms

“In order for innovation to happen, a bunch of things that aren’t happening on closed platforms need to occur. Valve wouldn’t exist today without the PC, or Epic, or Zynga, or Google. They all wouldn’t have existed without the openness of the platform. There’s a strong tempation to close the platform, because they look at what they can accomplish when they limit the competitors’ access to the platform, and they say ‘That’s really exciting.’”

“We are looking at the platform and saying, ‘We’ve been a free rider, and we’ve been able to benefit from everything that went into PCs and the Internet, and we have to continue to figure out how there will be open platforms.’”

On Valve’s interest in Linux

“The big problem that is holding back Linux is games. People don’t realize how critical games are in driving consumer purchasing behavior.

“We want to make it as easy as possible for the 2,500 games on Steam to run on Linux as well. It’s a hedging strategy. I think Windows 8 is a catastrophe for everyone in the PC space. I think we’ll lose some of the top-tier PC/OEMs, who will exit the market. I think margins will be destroyed for a bunch of people. If that’s true, then it will be good to have alternatives to hedge against that eventuality.

On the evolution of touch

“We think touch is short-term. The mouse and keyboard were stable for 25 years, but I think touch will be stable for 10 years. Post-touch will be stable for a really long time, longer than 25 years.

“Post touch, depending on how sci-fi you want to get, is a couple of different technologies combined together. The two problems are input and output. I haven’t had to do any presentations on this because I’m not a public company, so I don’t have any pretty slides.

“There’s some crazy speculative stuff. This is super nerdy, and you can tease us years from now, but as it turns out, your tongue is one of the best mechanical systems to your brain, but it’s disconcerting to have the person sitting next you go blah, blah, blah, blah.

“I don’t think tongue input will happen, but I do think we will have bands on our wrists, and you’ll be doing something with your hands, which are really expressive.”

On wearable computers

“I can go into the room and put on the $70,000 system we’ve built, and I look around the room with the software they’ve written, and they can overlay information on objects regardless of what my head or eyes are doing. Your eyes are troublesome buggers.”

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As musical old-timers repeatedly sing the sad song of the supposed demise of the full-length album, a funny thing has happened. Lovers of games have taken up a growing passion for game music, and in particular the indie score for indie games. Independent game publishing and independent music composition – from truly unsigned, unknown artists – go hand in hand. Indeed, the download and purchase charts on Bandcamp are often dominated by game scores. Fueled by word-of-mouth, these go viral in enthusiast communities largely ignored by either music or game reportage.

Far from the big-budget blockbuster war game, these scores – like the games for which they’re composed – are quirky and eccentric. They reject the usual expectations of what game music might be, sometimes tending to the cinematic, sometimes to the retro, sometimes unapologetically embracing magical, sentimental, childlike worlds.

And now, defying music’s typical business models as well as its genre expectations, you can get a whole big bundle of games for almost no money. Pay what you want, and get hours of music. Pay more than $10, and get loads more. You just have to do it before the deal ends (five days from this posting), at which point the bundle is gone forever. In a sign of just how much love listeners of these records feel, there’s a competition to get into the top 20, top 10, and top-paying spots, which with days left in the contest is already pushing well into the hundreds of dollars. But for that rate or just the few-dollar rate, these are the true fans. You’ve heard about them in theory in trendy music business blogs and conferences, in theory. But here, someone’s doing something about it, and it’s not a fluke or a one-time novelty: it’s a real formula.

http://www.gamemusicbundle.com/

Game music itself is, of course, a funny thing. Game play itself tends to repetition, meaning you hear this music a lot. So it says something really extraordinary about the affection for these scores that gamers want to hear the music again and again. This gets the musical content well beyond the level of annoying wallpaper into something that, even more than a film score you hear just once or a few times, you want to make part of your life. That endless play gets us back to what inspired ownership in the first place, to buying stacks of records rather than just waiting for them on the radio. And in that sense, perhaps what motivates owning music versus treating it like a utility or water faucet hasn’t changed in the digital age at all. Maybe it’s gotten even stronger.

We’ve already sung the praises of Sword and Sworcery on this site; it’s notably in the bundle. But I want to highlight in particular one other score, the inventive and dream-like Machinarium. Impeccably recorded, boldly original, the work of Prague-based Tomáš Dvořák, Machinarium mirrors the whimsical constructed machines of the games. There’s a careful attention to timbre, and music that moves from film-like moments to song to beautiful washes of ambience, glitch set against warm rushes of landscape. For his part, Dvořák is a clarinetist, and his musical senstitivity never ceases to translate into the score. It’s just good music, even if you never play the game, and easily worth the price of admission for the bundle if you never listened to anything else (though you would truly be missing out). It’s simply one of the best game music scores in recent years.

And another look at Jim Guthrie’s score to Sword & Sworcery:

Game Meets Album: Behind the Music and Design of the iPad Indie Blockbuster Swords & Sworcery[Create Digital Music]

Game Meets Album: Behind the Music and Design of the iPad Indie Blockbuster Swords & Sworcery [Create Digital Motion]

Also in this collection: Aquaria, To the Moon, Jamestown, and a mash-up, plus a whole bunch of bonus games when you spend a bit more that feel heavily influenced by Japanese game music and chip music.

And some of the best gems are in the repeat of the last bundle, which you can (and should) add on for US$5 more:
Minecraft: Volume Alpha, Super Meat Boy: Digital Soundtrack, PPPPPP (soundtrack to VVVVVV), Impostor Nostalgia, Cobalt, Ravenmark: Scourge of Estellion, A.R.E.S. Extinction Agenda, Return All Robots!, Mighty Milky, Way / Mighty Flip Champs, Tree of Knowledge

I’ve sat at game conferences as composers working for so-called AAA titles lamented the limitations of the game music production pipeline. Quietly, indie game developers have shown that anything is possible, that the quality of a game score is limited only by a composer’s imagination.

More music to hear (and some behind-the-scenes footage), including a really promising Kickstarter-funded iPad music project from regular CDM reader Wiley Wiggins:

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