Valve co-founder and managing director Gabe Newell has made his debut in Forbes magazine's annual rich list this year, which ranked him number 854 out of 1,226 global billionaires.

Forbes estimates Newell's net worth at US$1.5 billion. This is based on a "conservative" US$3 billion valuation of Valve Corporation, the company which he founded in 1996 together with Mike Harrington. Newell owns more than 50 per cent of Valve.

Valve Corporation is privately held and does not release financial data – and nor does Newell comment on his personal finances – so Forbes had to consult with an array of "industry insiders", analysts and bankers to estimate what the company is worth. The US$3 billion figure was the lowest given, so the company could well have a value much higher than this.

The biggest driver of growth is its Steam platform, which now accounts for more than half of the company's revenue. Steam launched in 2003, and revenues from the service have doubled every year for the past seven years; it is estimated to hold as much as 70% of the digital sales market. It has over 40 million users and offers 1,800 games from more than 50 publishers.

The rest of the company's revenue comes from its own games, which are few and far between – but when they do arrive, they tend to be big hits. Valve launched Portal 2 in 2011 to critical acclaim. It has also sought new sources of revenue; in June it switched Team Fortress 2 to a free-to-play business model, which Valve's Joe Ludwig revealed at GDC is now earning twelve times more monthly revenue than the game did through copy sales.

In addition, Valve is rumoured to be developing a Steam-powered console.

The Forbes list of The World's Billionaires was first published 25 years ago. The first edition had just 140 names; this year's list has grown to 1,226 individuals with a total worth of US$4.6 trillion. The list was the product of 50 reporters in 16 countries working throughout 2011.