Wagner James Au / New World Notes

Lots of interesting reader comments to my post last week wondering if Half-Life Alyx has yet to make a profit for Valve (almost certainly not) including this one from Kent Bye, a VR podcaster very much worth following:

How would you incorporate the fact that Valve makes 30% off of future XR games sold through Steam? Tons of copies of Half-Life Alyx were bundled with Index headset. The Index has been sold out for months & months. I know lots of people waiting to play it on the Index, because it is by far the best VR HMD.

Valve is collaborating with Microsoft & HP on a new PC VR headset, and reportedly collaborating with Apple on making an AR headset. Valve is more interested in cultivating a more open ecosystem that pushes the medium forward.

There will be an entire generation of XR developers who get their start by modding Half-Life Alyx. It's already inspiring what's possible for the next wave of VR games and set the bar for quality & immersion.

To try to reduce down the impact of this game into a single binary number or profit or loss misses the cultural & inspirational impact it has had and will continue to have on the broader XR ecosystem. Perhaps Half Life Alyx will continue to be a loss leader, but it is certainly paving the way for all sorts of other XR & AR devices from Microsoft, HP, & Apple.

That's all very valid, especially the point about the modding community that'll emerge around Alyx, which reader "seph" also eloquently made awhile ago. My main goal was to illustrate how much money Valve is leaving on the table by making Alyx a VR-only game — along with pointing out how difficult it is for a AAA-level VR game to make money, even in the best of circumstances. But as Kent says, Alyx's core purpose is to be a loss leader for VR device sales. 

Speaking of which, "SnakeTheFox" (love the name) argues VR device sales are a non-starter at the current price:

It's simply too expensive. That's it. That's literally all there is to it. No more analysis necessary, really.

Buying in to VR, even on second hand, 1st gen equipment, will run you upwards of $300-400 at least.

And that's not counting the overall hardware requirements you've got to meet too, in an age where GPUs cost two arms and two legs because of bitcoin miners driving the prices into the sky.

And now, with the coronavirus destroying the economy and job market, people are being more frugal about their purchases than ever.

I know people who invested time and money in VR probably want [Alyx] to remain an exclusive game to drive hardware sales and bring their hobby more into the mainstream, but it's simply not going to ever reach a sizable audience when it's being gatekept by the buy-in cost.

Not everyone is even in a position where it's reasonable to throw 500+ dollars at the hardware/equipment necessary just to play one admittedly very nice looking 10~ish hour singleplayer campaign.

It is an absolutely terrible sell, unfortunately, no matter how good the game is. Not really sure what Valve was thinking or what the strategy here was, but it seems out of touch with the economic reality of most working class Americans, to be honest.

Half-Life 2 was my first PC game. I grabbed a Nvidia 6600GT to throw in my shitty Pentium 4 bargain desktop, and it still ran fine at medium settings. $149 dollars and that was it, in 2004.

Now for this title, Valve wants fans to shell out $1000 for an Index first… yeah, sorry, hard pass.

I mean, if Valve really wanted Alyx to be a loss leader, why not package it with an Index and sell the Index for, well, $149? Yes, the company would take a tremendous hit on each sale, but given that Valve makes upwards of $5 billion a year in Steam sales alone, shouldn't that be a hit they're willing to take? If Valve really believes VR is the future, that is.