Gabe Newell of privately held Valve Software is unknown to most people over 50, but for 21-year-olds like my son he's a very big deal.
Valve runs Steam, which is a necessary gatekeeper for people who play video games a lot. It's what my son uses to download and play most major games, as well as chat with other users. It's as important to real gamers as Facebook (NASDAQ:FB) and Zynga (NASDAQ:ZNGA) are to casual gamers, like my daughter. (Or like Seeking Alpha is to me.)
During all the years I covered open source and Linux for ZDNet, my son sort of laughed at me, because Linux was so irrelevant to gamers like him. Windows was it, because Steam was it, and Gabe was god. One of his favorite stories is of our wandering the halls of CompuTex in Taiwan, back in 2009, looking for Linux in all the wrong places and eventually finding it hidden in four booths at an auxiliary hall.
Things have changed. My son is suddenly asking lots of Linux questions because Valve is at war with Microsoft (NASDAQ:MSFT). Newell is calling Windows 8 a "catastrophe" for PCs because Microsoft will be using it to take the same control over gaming that Apple (NASDAQ:AAPL) has over Apps.
The Windows Store, and Windows' integration with Xbox LIVE, is a direct threat to Valve and Steam. And Newell is doing more than complaining about it. Valve is developing a version of Steam for Ubuntu Linux, and while that doesn't sound like a big deal, it would not be hard to then sell that software inside a Linux-based gaming box.
Newell isn't the only person complaining about Windows 8, on which the company has basically bet its future. Gartner analyst Gunner Berger calls it "bad" for desktops, which is the heart of Microsoft's market.
But Gartner can't compete with Windows desktops. Valve can. The unity that Microsoft sought through the development of Windows 8 -- one operating system to run your game machine, your TV, your desktop, your tablets, your phone -- appears to be breaking down as Microsoft goes all "Breaking Bad" on its old business relationships.
Should investors be concerned? I am. Should they be worried? Maybe.
Is it time to give up on Microsoft?
Not yet. There's too much momentum in the enterprise market. There's too much promise in the tablet and phone market, where Microsoft does not yet play.
But I'm getting a little nervous. Are you?
Disclosure: I am long MSFT.