After dropping out of Harvard, Gabe Newell joins Microsoft. This was a strategic move, aligning with the rising prominence of personal computers and the software industry.

Newell spends 13 years at Microsoft, working on early versions of Windows. He plays a key role in shaping the operating system's user interface and architecture. He also participates in the development of other software programs.

During his time at Microsoft, Newell witnesses the rise of the internet and recognizes its potential impact on software distribution and gaming. He sees the shift towards downloadable content and online multiplayer experiences, which significantly influences his future ventures.

After 13 years, Gabe Newell leaves Microsoft with Mike Harrington to co-found Valve L.L.C. They had both become millionaires through stock options.