 Hi, I'm Gabe. The feels a little bit funny coming here and telling you guys that Linux, an open source of the future of gaming, sort of like going to Rome and teaching Catholicism to the Pope. So bear with me. Valve is, we were founded in 1996. We have a mix of single player and multiplayer games, like Half-Life, Counter-Strike, and so on. We've shipped our games on a bunch of different systems, the PC most obviously, as well as Mac, Xbox, PlayStation, and other consoles. And we've also created a set of tools for software developers and for customers called Steam. Now, a lot of our decisions and our thinking about the future is based on what we see as structural changes that are the consequence of the ongoing improvements in performance and price performance and computing and networking. And I think that people always overestimate the effect of these things in the short run and underestimate them in the long run. One of the key decisions we made when we were first starting the company was the realization that as we continued to reap the benefits of those kinds of performance improvements, that the relative value of different line of business functions would change, that sales and marketing and distribution would be cheaper and easier. And that meant that the design and development of products were going to become more valuable. And a lot of times you'll see corporate structures that struggle to keep up with that pace of change. But it's not just in how corporations should be run that those changes end up being propagated. It has implications throughout my industry, throughout the gaming industry. You'll see it in things like the emergence of digital distribution platforms like our own Steam. But you'll also see it in ways that are kind of surprising. For example, we reached a point a couple of years ago where the marginal costs of having another player were less than the marginal community benefits of having somebody be in that audience or participating in that community. And that gave rise to what at first sounded a little bit perverse, the free to play style of games. And you also see other phenomena start to occur. So you'll see things like Twitch TV coming along or eSports where in order to have a model that encompasses the value that people get out of it, you have to think about the novel ways that content creators and experiences are going to be generated. And at the last tournament we held, we had over a million people watching it simultaneously. That was between a Swedish team and a Russian-Ukrainian team. Now these structural, just because of course right now Valve is fairly successful. So it would be nice if the world just stopped right here because this is a point in time when we're doing well. But the process is actually going to continue to go on. In the same way we've seen the center of gravity of gaming moving from console hardware platforms into developers and services. We think that process is going to continue. And it's really the users that are going to be the focus of optimal strategies, both from a technical point of view and from a market development perspective. And to sort of skip a four or five hour long presentation, the conclusion that we reached is that games are essentially going to be nodes in a connected economy where the vast majority of digital goods and services are going to be user created rather than created by companies. So let's take a step back and just talk about Valve's own experiences with Linux. In 1999 we shipped our first game server for Linux. And since then it's pretty much been the majority of the game servers that have been out there. And that means around the world there's actually probably over a million game servers out there right now running. We not only have used Linux in terms of deploying a service footprint, but we also just use it internally. So we've got all of our source code, all of our models, all of our animations, all of the assets are all being run on top of Linux. We go a year where we love the performance, we love the reliability and robustness of it. One thing that tends to shock people, sort of especially in the traditional media world, is just how big games have become. When we do a new update for something like Dota 2, nearest we can tell that we're generating about 2% to 3% of the worldwide mobile and land-based IP traffic. And that tends to startle people who don't realize what a large sea change has been going on. Now, our experiences we think are fairly typical of lots of people in the games industry. So if you go to Blizzard or Bungie or any of the other game companies, you're going to find that in terms of building out a service vision in terms of running their own operations, they're all super comfortable and have a lot of experience running with Linux. On the other hand, as we all know, the user experience of being a gamer trying to play on top of Linux has been pretty painful. Any metric that you use, if you're just looking at how many players there are, how much time they spend playing, how much revenue they're generating for game developers, it's very small, typically, like I say, under 1%. And that's way too small to ever get any attention in terms of making sure you're compatible with device drivers or distros or thinking about how to improve that experience and so on. However, what we became convinced of is that Linux really is the future of gaming. And what I'm going to do for the remainder of this presentation is talk about why we think that Linux is critical and what Valve is going to do to help make that happen. Several years ago, we got very concerned about directions that the PC industry was going. We thought, well, how to be polite about this. So we thought that there was, well, we thought there was some bad thinking. And that there were these new platforms that were starting to emerge. And they had this nice characteristic that you could control access to those platforms. If you didn't like competing with Google, you just didn't let them ship on your device. Or you could determine how often that they could update. You could have a lot of control over things like pricing and other characteristics. And that was a very seductive opportunity, which I think led to some poor decision making by some of the key actors in the PC space. I think that the way that they should have responded is very much the key off of the strength of the openness of the systems we had and to double down on that rather than going the other way. So jumping forward, what are we looking at now? We're looking at steady year-over-year unit declines in PC sales. And the people in the field sort of are dear in the headlights. They were like, we didn't have a model where this was occurring. We thought that people would always keep buying more and more PCs regardless of what we did and what sort of restrictions we imposed on them. And you see all these articles, PCs in decline. I think we'll see either significant restructurings or market exits by top five PC players. It's looking pretty grim. On the other hand, PC gaming seems to have been immune to this downturn. So in the past, back to the Nintendo Entertainment System days, gaming really was led by these proprietary hardware and software standards that also, if you wanted to get your cartridge made, you bought it, FOB in Tokyo. If you had a competitive product miraculously, your ROMs didn't show up until three months after the platform holder's product had entered market and stuff like that. Those really were sort of the dominant models for what was happening in gaming. But not too surprisingly, open systems were advancing much faster than the proprietary systems had. So there used to be these completely DeNovo graphic solutions for gaming consoles, and they've all been replaced by PC-derived hardware. The openness of the PC as a hardware standard meant that the rate of innovation was way faster. So even though you would think that the console guys would have a huge incentive to invest in it, they were unable to be competitive. There also used to be, almost nobody knows this, there used to be proprietary networks for gaming, and the internet was like, who needs that? And obviously, the internet was completely displaced any of those homegrown solutions for multiplayer gaming. So PC gaming is where innovation is occurring, and you'll see that in lots of ways. It's not on the consoles. It's not on any of the closed systems where the innovation is happening. It's happening to the extent to which openness is embraced by the underlying platform. So digital distribution came out like Steam. Social gaming occurred on the PC, free to play, MMOs, trading workshops. All of the most interesting topics in the game industry really are coming out of the open environment of the PC. So in spite of seeing year-over-year unit declines in PC sales on the gaming side, we're seeing huge increases. So the data I'm most familiar with is ours, but we're going up 76% year-over-year at the same time PC unit sales are getting double-digit declines. And I think that that's true for all of our partners in the PC space to varying degree, that the innovation and openness of the PC as a gaming platform have enabled us to be somewhat immunized against some of the broader structural decline of the PC. We also think that the rate of change is increasing, that we're not really going to be slowing down. And so that systems which are innovation-friendly, that are which is equivalent to openness, are going to have greater and greater competitive advantage to closed or tightly regulated systems. We actually think that we're going to see a significant sort of democratization in the content creation process. Users will be, the distinction between a content creator and a content consumer will get blurrier and blurrier. And just to be really concrete about that, so Valve, we're kind of a cocky company and we like to think we can compete with any company in the world, right? So if we sat down and said, oh, let's have a competition with Bungie or Epic or Blizzard, we're friends with all these guys, by the way, we'd feel like, oh, yeah, we can take them. We're good at what we do. But the one entity we wouldn't ever want to compete with is our own users, right? That they have already outstripped us spectacularly. You can't compete with them once you give them the tools that allow them to participate in the creation of the experiences that they find are valuable. And it's not by a little bit. It's like an order of magnitude more productive already. And we're only a couple of years into thinking about how to do that. It's like, you don't want to compete with your customers because they're going to be way better. You also don't want to compete with Reddit or 4chan, but the point is that the connected groups of users are going to be way more successful if they're properly enabled and supported than any of the individual game developers are going to be. But there's this huge tension between if that's the direction that gaming is going or if that's the direction content creation is going, these other systems actually put a tremendous number of roadblocks in the way of doing that. It takes several months to get through certification process for a single update, right? I mean, it took us six months to get one update through the Apple Store to ship an iPad update. And we have a lot of resources and have a huge commercial motivation. And no individual user, if they're the sort of the center of gravity for content production is going to have the wherewithal or the stubbornness to get through that. That's just one example of the many ways that the closed systems appeared us to be antithetical to our user-centric model of content production going forward. So in general, we've seen tremendous evolution and innovation in the open space. We've seen that we think that that process is gonna continue. And we think that we need to be knocking down as many barriers and reducing friction not going in the other direction. So what have, you know, okay, that's great. So what have we been doing? So several years ago, we actually were like, wow, this is where we think games are going. You know, there's a logical consequence to that, which is we need to be working pretty hard to make sure that Linux is a good solution for gamers and for game developers. And it was kind of distressing because there was just a lot of work that we would need to do in order to help address those issues. And it wasn't just that there was the work. You had to figure out how to stage it out, right? Because if you try to do everything all at once, you know, you'll do a bunch of things pretty badly. So not only did we see ourselves needing to do a lot of work, but we also had to be think about what was the process of rolling that out with partners and with customers. So the first step was to get a game running on Linux. And we used that, you know, like developers do is kind of a sweater threat of issues. Like, so we're going through and it's like, oh my God, it's incredibly slow. And then we go and we talk to Nvidia and work with them to fix their drivers. And then we get it to the point where it's a lot faster than the Windows version. It's like, okay, that's great. And then you find, well, the user experience is impossible. You know, it's like, you know, how do you do updates? Well, you know, here's a super long, well, just compile it yourself. And you're like, oh, well, it's not a good solution for your average user. So it's just by, you know, going through that exercise of getting one game up, you know, you have to do a lot of different things. Then the value of that, you know, you're sort of optimistic going into it that if you solve a set of problems for one game, you're gonna solve it for a bunch of others. And that definitely appears to have been true that if you get, you know, the kind of game that we produce all, you know, create a good user experience around that, that you probably, you know, we've definitely solved problems for, you know, the Call of Duty team or, you know, Unreal Tournament or whatever. It's, the games aren't that much different. The key thing is to get it all the way through to customers. So then this February this year, we shipped a Steam client for Linux. And as much as anything, that was a signal to our development partners that we really were serious about this Linux thing that we were talking with them about. And now today we have 198, at least when I got on the plane, we had 198 games that were running on Linux. So, you know, helping make Linux successful also involves a bunch of other things, as you all know. We have engineers who work on SDL, which was an open source project started by another Valve employee, Sam Leninga, or a contributing member of the Kronos Group. One thing I don't think we've talked about is we're actually developing, co-developing a Linux debugger. That's in addition to the work we've been doing with the LLVM people. So when we go out and talk to developers and say, okay, you know, if you can pick one thing for Valve to work on on the tools side to help make Linux a better development target for you, what would it be? And they always were coming back and telling us to work that we should build a debugger. So we're working with another company on building a Linux debugger. These are useful things to do to help move things forward on the developer side. Now I'm going to take a step back or so I can talk about the living room. You know, there's this notion that there's, there's kind of struggles I think you guys go through on the cloud side where you recognize sort of the implications for how you can abstract certain problems away from both developers and users where, you know, it doesn't really matter where you are. It's all, you just know that it's going to work. Those are exactly the kinds of problems that we think are important to attack on the gaming side. Right now, you know, you're sort of in this bizarre situation where as soon as you sit on your couch you're supposed to have lost connection with all of your other computing platforms. You know, it's like, oh, well, just buy your games all over again and, you know, the input methods are incompatible and, you know, oh, yes, you can have music but you need to buy it from us rather than somebody else. So we thought that that was just, that was an incorrect way that really through design and through thinking hard about how to create appropriate abstractions for both users and developers you could build something that spanned, you know, like the desktop and the 10 foot living room experience. And it's one of those things where people sort of like, oh, people don't want PCs in their living room and you basically, there's no amount of arguing you can do with that person to convince them otherwise. Or they say, yes, this is trivial and obvious. And so one of the things that we had to do is we're staging out what we think is the different pieces necessary to make Linux the basis for the future of gaming. We need to build something which showed that, yes, in fact, you could take everything that you liked about your PC and get it to work in your living room. That's called Big Picture. Our next step, having done these other pieces, is now on the hardware side. We think especially, you know, there's sets of issues to making sure that whatever computing platform you have works well in a living room environment. There are thermal issues and sound issues, but there are also a bunch of input issues. So the next step in our contribution to this is to release some work we've done on the hardware side. Even more broadly in terms of sort of the grand unification, we really don't think that there's the fragmentation around the physical location or the input devices of computation is either necessary or desirable for software developers or for consumers. You know, that nobody thinks, you know, everybody just sort of automatically assumes that the internet is gonna work regardless of where they are. There may be pluses and minuses to their specific environment, but nobody says, oh, I'm in an airplane now, I'm gonna use a completely different method of accessing data across the network. And we think that that should be more broadly true as well, that you don't think of touch input or game controllers or living rooms as being things which require a completely different way for users to interact. Or acquire assets or developers to program or distribute to those targets. Obviously, if that's the direction that you're going in, Linux is the most obvious basis for that and none of the proprietary closed platforms are gonna be able to provide that kind of grand unification between mobile, the living room, and the desktop. Actually, next week we're gonna be rolling out more information about how we get there and what are the hardware opportunities that we see for bringing Linux into the living room and potentially pointing further down the road to how we can get it even more unified in mobile.