Valve boss says service, not price, the big issue for consumers and publishers.

Here's Valve's co-founder and CEO Gabe Newell talking about piracy in the games industry. The man behind online retail service Steam tackles those who claim that lower prices for games will make piracy go away, and he takes on companies that seek to fight piracy by inconveniencing consumers. //

"We think there is a fundamental misconception about piracy," Newell said. "Piracy is almost always a service problem and not a pricing problem. For example, if a pirate offers a product anywhere in the world, 24/7, purchasable from the convenience of your personal computer, and the legal provider says the product is region-locked, will come to your country three months after the U.S. release and can only be purchased at a brick and mortar store, then the pirate's service is more valuable.

"Most DRM solutions diminish the value of the product by either directly restricting a customer's use or by creating uncertainty."

He adds, "Our goal is to create greater service value than pirates, and this has been successful enough for us that piracy is basically a non-issue for our company. For example, prior to entering the Russian market, we were told that Russia was a waste of time because everyone would pirate our products. Russia is now about to become our largest market in Europe.