CD burners threaten Valve's business model as piracy rises

In the late 1990s, with the launch of the original Half-Life game, Valve Corporation was faced with emerging challenges brought about by technological advancements. One of these advancements was the introduction of CD-ROM burners, which allowed users to easily duplicate games, leading to increased piracy. Monica Harrington, the cofounder and then-CMO of Valve, shared insights during a talk at the Game Developers Conference in 2025, where she recounted her nephew's casual attitude toward pirating games using the CD burner. She emphasized that this moment prompted her to take digital rights management (DRM) seriously, as it signified a generational shift in how gamers viewed game piracy. Harrington noted that while game piracy had existed prior to this era, the versatility and accessibility provided by CD burners escalated concerns for game companies. This realization was pivotal for Valve, as they understood that their entire business model could be jeopardized if they did not take measures against unauthorized copying. Soon after Half-Life's release, the company implemented a simplified CD key verification system. Despite being met with complaints from users, this authentication method proved effective and reinforced the necessity for DRM in the gaming industry. In light of these developments, Valve launched Steam several years later, which has since grown into a comprehensive digital distribution platform and DRM service for PC games. The company increasingly recognized the importance of protecting intellectual property and how essential it was to evolve their security measures to combat piracy. Harrington's perspective shifted, realizing that consumers, especially younger gamers like her nephew, often didn't consider the implications of piracy on businesses and their models. A significant takeaway from Harrington's experiences is the need for game developers to understand their audiences and adapt to changing technologies. The introduction of CD burners and their usage for game piracy forced companies like Valve to innovate their strategies for protecting their products, leading to the eventual, robust DRM systems we see in today's gaming environment. Moreover, Harrington's anecdote also highlights that awareness and education regarding the impacts of piracy on the industry are crucial for fostering responsible gaming habits among players.