One of the advantages of being a private company is that you are not required to publicly file your annual financial statements. That won’t stop people from trying to figure out the financial health of your company.
A market data firm called SuperData has prepared a report on the revenues of Valve and Steam. Their calculations indicate that Valve made $730 million in revenue in 2014.
SuperData’s analysis breaks down Valves revenues between its games and its activities through Steam. From Valve’s own games, SuperData’s analysis focused on the digital markets for Dota 2, Team Fortress 2 and Counter-Strike Global Offensive. These three titles were estimated to bring in $400 million in revenue. From Steam, Valve was estimated to have made $1.5 billion in gross sales of which they kept about $330 million. When you remove the $400 million of first-party revenue above, they make a margin of 30% on third-party sales ($1.1 billion).
The important thing to note right now is that these are third-party estimates rather than official figures. SuperData also claim to have been “conservative” with their estimates meaning that the revenue numbers which means that they believe that Valve’s revenue could actually be higher than the $730 million they reported.
Apparently, the amount of money that Valve is making from Steam and its games is why you don’t have Half-Life 3 yet. Because Valve doesn’t need to push HL3 out the door to keep itself financially viable, they’re going to take their time making it as good as possible out of concern of the high-standard it will be held to.
Just out of the sake of analysis, how does Steam stack up with GameStop? Well, since SuperData’s number are really gross profit numbers (they exclude the cost of goods sold for games sold on Steam), let’s take the same from GameStop’s most recent financial statements. GameStop’s gross profit for FY2015 is $2.776 billion or about $2 billion more than Valve’s. Of course, GameStop’s gross sales is $9.3 billion or over six times that of Steam so Valve is actually getting the better gross margin (gross sales over gross profit as a percentage).
The comparison showing how much bigger GameStop is shouldn’t surprise you. After all, GameStop sells games for every platform along with hardware and non-gaming merchandise. Diversity of offerings helps GameStop clear Valve by a wide margin in terms of raw dollars.
So the long and short of it is that Valve is bringing in money hand over fist. I don’t think that they’re in any danger of needing to panic any time soon even with the Steam hardware and OS experiments.