Valve just announced a new line of devices: an updated version of the Steam Controller, the Steam Frame VR headset, and the Steam Machine laptop. The latter was especially shocking to the industry because the company was about to enter the gaming console market – the territory of Microsoft and Sony. Gamesindustry.biz portal speakwhy the release of the Steam Machine threatens to be a turning point for the gaming industry.
Of course, Valve could naively explain this announcement by saying that the company is simply evolving its existing gaming hardware strategy, exploiting new chipsets and technologies. But in fact, she chose a very important moment for her opponents.
Microsoft is in the process of pivoting to the Xbox platform, aiming to integrate gaming into Windows and transform the Xbox family of devices into a hybrid between a PC console and direct access to the Game Pass game library. The details of the main steps of this strategy are still unknown, but it recently brought Microsoft expensive mobile PCs under the Xbox brand. There are also suggestions that the next official Xbox console will be a custom PC that costs about the same and supports full Windows features.
Valve's new Steam Machine is partly built on the same concept – it's a custom PC that will act as a console and give users access to their Steam library. But while Microsoft has hinted that its new product will be sold at a premium price, Valve's device will likely focus on mass market accessibility. The Steam Machine uses a chipset with comparable performance to current consoles – and it will likely cost about the same.
But less impressive characteristics do not mean that Valve's new product cannot compete with other platforms. The Steam Machine has two main advantages over the upcoming Xbox, both of which are unique to Valve. The first is selling digital games through Steam and the second is the SteamOS operating system.
It's pretty clear why Steam integration is a competitive advantage. The store has been the dominant digital game sales platform for two decades, and even relatively casual PC gamers often own substantial game libraries on Steam. While it's entirely possible that an Xbox console will let you simply access your Windows desktop and install Steam, the appeal of a cheap device that supports it by default is hard to beat. Microsoft has blamed the failure of its platform (Xbox One) on gamers who have amassed impressive digital game libraries and don't want to give them up. A similar story could repeat itself again.
SteamOS was quite a risky project when Valve first started developing Steam Deck, but gradually the resources and labor invested in the operating system paid off. Both the “axis” and the Proton emulation layer, which allows it to run Windows games almost without problems, can easily be called a technological miracle.
For all of Microsoft's efforts to improve gaming performance on Windows, it still puts a huge amount of additional load on gaming devices. SteamOS, even with its emulation layer, is still ahead of Windows in terms of optimization in games on the same hardware. This way, Valve can launch a relatively inexpensive console that's built on older hardware but offers solid performance. Microsoft will have a hard time catching up to SteamOS, especially if it hopes to turn the next Xbox into a software layer that runs on top of Windows.
Moreover, this is not a hypothesis but a very real situation, because Steam Deck has confirmed these arguments in practice. Compared to many other laptops, Valve's device has relatively modest specifications, including those that are inferior to Xbox-branded laptops. But while competitors' machines often sag when loaded with demanding games, the Steam Deck can cope thanks to its lightweight, highly optimized operating system and a partnership program with developers that customize their game specs specifically for the device.
In fact, the Steam Deck serves as a great testing ground for Valve to figure out the best way to reach this market. The idea of devices bridging the gap between PCs and consoles has been around for a while, but Steam Deck has helped the most powerful company in PC gaming find a way to make it a reality. Although Valve's mobile device wasn't exactly a commercial blockbuster, it laid a solid foundation for the Steam Machine.
However, some questions remain unanswered. First, the supposed availability of the Steam Machine is pure speculation. Additionally, it's unclear whether Valve has the desire or ability to mount a massive advertising campaign, the type that typically precedes a console release. In the case of Steam Deck, the studio wanted the new product to speak for itself; a laudable philosophy but hardly compatible with its ambitions to reach the mass market.
However, the upcoming release of the Steam Machine could be a game-changer for the gaming industry. A turning point – and one long awaited, as the emergence of a new dynamic player could change the balance of power in the console market. Both Microsoft and Sony will have to do something to avoid losing to new competitors. Nintendo doesn't seem to feel threatened by Valve, but the Steam Deck could affect sales of Sony's rumored handheld console, which is rumored to be in development.
