Gabe Newell has spoken about piracy before and, as you'd expect made a whole lot of sense. Now, speaking to student website The Cambridge Student, Gabe reiterated some of his previous points, and expanded on others. His major point? Provide a better service than pirates, and you will be successful.
In general, we think there is a fundamental misconception about piracy. 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 x 7, purchasable from the convenience of your personal computer, and the legal provider says the product is region-locked, will come to your country 3 months after the US 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 customers use or by creating uncertainty.
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.
Incredibly Gabe Newell seems to have struck on something -- treat consumers with the respect they deserve and you'll ultimately reap the benefits. Who knew?!
Interview: Gabe Newell [The Cambridge Student]