Valve has a spear lined up at so much of big tech right now it's honestly impressive they've done it in stealth for so long. Google, Microsoft and Apple are all in the crosshairs in a big way, and I don't think they can avoid the blow that's coming without cannibalizing their margins.
Valve's hardware products will be successful but remain niche. And that's ok. They are unwilling to pursue business models that require locking down hardware in order to subsidize it with software purchases, and I love that about them. As a result their hardware will always be more expensive. They will not outcompete Meta in VR or Sony/MS/Nintendo in consoles because price is king for the mass market.
Valve's hardware products, aside from being awesome and setting a standard that others have to match, are really an insurance policy. They ensure Valve cannot be locked out of their own market by platform owners like Microsoft or Meta using their leverage to either take a cut of their revenue or outright ban Steam in favor of their own stores (as it looked like MS might try to do in the Win8 days). By owning a platform of their own Valve always has a fallback option.
Well, Valve got seriously concerned about the Windows Store, like, a decade ago, since that could have reduced the stranglehold of Steam on the gaming marketplace.
Turns out that the usual Microsoft incompetence-and-ADHD have kind-of eliminated that threat all by itself.
Also: turns out that, if you put enough effort into it, Linux is actually a quite-usable gaming platform.
Still: are consumers better off today than in the PS2 era? I sort-of doubt it, but, yeah, alternate universes and everything...
> Well, Valve got seriously concerned about the Windows Store, like, a decade ago, since that could have reduced the stranglehold of Steam on the gaming marketplace
Microsoft telegraphed its intention to kill Steam. The plan was a hermetically sealed ecosystem where only cryptographically signed code could run on Windows computers, from UEFI boot to application launch. This meant users would only run software Microsoft let them, and there was no room for the Steam store in Microsoft's vision of the future then.
I believe Valve's concerns went(or maybe go?) beyond just the Windows Store, and into "We believe Microsoft may become unable to ship a good Operating System in the future".
In a 2013 interview with Gabe Newell: "Windows 8 was like this giant sadness. It just hurts everybody in the PC business. Rather than everybody being all excited to go buy a new PC, buying new software to run on it, we’ve had a 20+ percent decline in PC sales — it’s like 'holy cow that’s not what the new generation of the operating system is supposed to do.' There’s supposed to be a 40 percent uptake, not a 20 percent decline, so that’s what really scares me. When I started using it I was like 'oh my god...' I find [Windows 8] unusable." [0]
The Windows Store probably was a part of it, sure, but looking at that quote from 2025, after having your SSD broken, your recovery unusable and your explorer laggy? It's quite bitter-sweet.
>that this is actually Steam Machine 2.0. Valve already tried this a decade ago, and it flopped.
I find this framing to be beyond maddening. Sure, it wasn't an iPod, and if you measure it against that kind of expectation, of course it's a flop, because it wasn't an overnight success.
But I think it's more appropriately understood as a soft launch of an ecosystem, to strategically rebalance Valve away from the potential risk of being locked into Windows. It was also a thoughtful partnering with hardware vendors, so they weren't shipping hundreds of thousands of units to Walmart shelves was just sat there and lost them tens of millions of dollars, which is also what I think of when something's considered a flop.
But it was a thoughtful, intelligent long-term commitment to an ecosystem that bore fruit in large part due to the credible long-term commitment as the library of steamos compatible games grew and set up the Steam Deck for success. And now it looks like the wind is at their back with the new line of hardware, but I think it's best understood as a return on investment that begun those many years ago.
I think it reflects a kind of intelligence and long-term thinking that Google is pathologically incapable of, by contrast.
Yeah, it's like the people who say, oh, the iPhone mini was a flop. That was a BILLION DOLLAR product. How many companies would LOVE to have a billion dollar product???
It will be interesting to see if they can answer a question better now than with the original Steam Machines ten years ago: what problem do consumers have that Steam Machines solve?
Their original answer was a resounding "nothing" - Steam Machines solved a problem for Valve (fear of an impending "Windows Store" being added by Microsoft that would steal the battlefield from Valve), but very little for the customer.
I guess that same question needs to be asked again here: are there sufficient problems that the average game-player at home has that are better answered by a Steam Machine than a Windows 11 box? Are those real problems experienced by the broader market of people, or are those just
tangential issues cared about by a more vocal few?
"ProtonDB tracks compatibility, and counts 7000+ games that are verified to work as well or almost as well as on Windows" - I always laugh when a media outlet uses ProtonDB as an example as the reality is something different. I have a ~1500 games big Steam Library and I'm also a Linux User for 20+ years - yes, I do use Windows only for gaming and on my work pc.
When I fire up my linux workstation or steam deck and browse my library, there are countless games, marked as "platinum" in ProtonDB, but do not work OOTB. Sometimes it's a later Proton version that broke the compatibility, sometimes you still need to tinker in the settings in addition to choose the correct proton version. All in all, I've spent quite some time getting games to run I just wanted to play a single afternoon as nostaliga hitted hard.
As long as issues like this are not resolved, I don't believe in Steam Machines as alternatives for consoles in the living room space.
And yes, I'm still considering a steam machine for my living room, even though I will need to support my wife and kids in getting games to run on the TV.
If they used the learning of the Steam Machines ARM translation layer to ship a Steam Phone, I’d jump on it day one even if all it had was basic phone apps and games.
> (2011, proxied quote from The Cambridge Student via The Escapist; the link in that article is dead, and a search on the site for “Newell” turns up no results)
Here’s the latest copy of the original article in The Cambridge Student:
Are they actually running the Apple playbook in reverse? It seems to me that they're actually running Apple's playbook pretty squarely, just in another domain.
First-gen product that seemed to not know where it's going? Check.
Continued quiet iteration behind closed doors despite first-gen being a flop? Check.
Sticking with the product line over many years, where most other companies would have written off and thrown in the towel? Check.
Multi-pronged GTM strategy where other products prove out key bits of next product? Check. (see: SteamOS and Proton setting the stage for Steam Deck, which in turn sets the stage for Steam Machine 2)
Deep software-hardware integration in ways that are highly salient to users? Check (see: foviated streaming for Steam Frame, Steam Deck "just works")
> Competition is difficult once a big aggregator has emerged, even for deep-pocketed incumbents.
And sometimes, the competition is just plain brain dead. Just take EA Origin, which my wife sadly requires because her entire Sims 4 library has been purchased through that and its predecessor.
With Steam, she can easily have the Steam Client open on both her laptop and her user account on my gaming rig simultaneously. No big deal, in fact it is required for Steam Remote Play - the only thing that keeps annoying us is that you can only have one Steam client open on one machine which is annoying on a multi-user machine.
But Origin? That piece of shit software doesn't just log you out on one machine when you log in on another - no, it opens a fucking modal window telling you "you're in offline mode". Yeah no shit, my wife knows that, she just turned on the other machine!
That's utterly fucking basic user experience stuff and yet EA doesn't seem to be able to fathom that people might want to own more than one machine. As long as they can be sold FIFA lootboxes, eh?!
> with current-gen consoles (which are sold at a loss, and so would be expected to be cheaper)
This is not true. It was true in 2019 when the PS5 was initially announced, but PS5 has been sold at a (slim) profit since 2021. Xbox probably sold at a loss for longer, but it definitely isn't sold at a loss in 2025.
The Switch & Switch 2 have always been profitable.
The BOM cost of the Steam Machine has been estimated at $450. They could sell for $500 and still be nominally profitable and still undercut XBox & PS5.
(That BOM cost estimate was before RAM price silliness so you have to adjust upwards a little bit).
1. Do you think that inaccuracy undercuts the point? If so, I'll correct the article; if not, I'll include it as a note in my planned follow-up.
2. Do you have the link(s) handy for those figures? If not, I can try to find them myself, but I figured it would be easier to ask first.
I don't see this happening in the foreseeable future.
Making competitive phones is even harder than making a desktop, and they aren't investing in Linux desktop itself either, just the components they need. SteamOS works by not running a desktop in its default mode.
The threat profile feels scarily different too. SteamOS doesn’t feel like something I’d install a banking app on.
I don’t think they want to wander further into malware arms races. They don’t seem to really want to maintain their anti-cheat currently, it’s notoriously poor. I love Valve but I’m not sure I’d trust them with a platform I log into my bank with.
> Steam came in 2003, created for easy management of updates for their games over the Internet (what today would be called a “proprietary launcher”).
I call it that today and I also called it one in 2003, when it suddenly demanded to be installed and kept running to continue playing Half-Life (what today would be called "vendor lock-in").
It has always been curious to me that Apple hasn’t put more effort into gaming. The AppleTV could easily be positioned as a game console if they put more effort into supporting developers and providing more dedicated infrastructure for games.
Contrary to what the article claims, the market being open and sloppy isn't enshittification. Jacking up prices and removing features users were using in the name of extracting profit is. But what I strongly agree with the author about is the uncertainty of Valve's fate after GabeN. Any company is able to enshittify, we are just one change of owners away. It's almost like potential energy vs kinetic energy - a company like Valve has saved up a _lot_ of enshittification potential waiting for the "right" condition to be realized.
I'd love to believe Steam will keep being the market leader because they haven't really enshittified yet. I'd love to believe that Tim Sweeney and Epic games are so unable to read the room and so blinded by being a public company that consumers just aren't interested. But considering their biggest game is Fortnite, they are practically selling to kids, who lack any sort of market opinion of that regard. Regardless, consumers don't really buy with their wallet unless there are immediate, solvable problems in front of them.
Regarding metaverse, I believe anyone who has been on VRChat instinctively understands why metaverse was doomed to fail from the get-go. I wrote some notes about my experiences which I released while doing winter-cleaning of my notes recently: https://petterroea.com/blogs/2025/living-a-second-life-in-vr.... There just simply isn't a market for what Meta are trying to sell.
> Unlike Apple hardware, the Steam Deck does not need to be jailbroken in any way, and Valve explicitly provides a guide for how to go outside their ecosystem
And this is why I'll always trust and prefer Valve over Apple.
IMO Apple and Valve are taking the opposite approaches but on a different axis than the article discusses: Apple is continuing to increase their lock in and remove choice, while Valve continues to add choice. You can argue that Steam being a nigh-monopoly means there isn't a lot of choice, but I'd argue that's not correct. For one, Steam rarely censors games (it does happen! A notable case happened this month! But it happens rarely) and doesn't have requirements for games to use Steam's platform technology to be on the market. In fact, you're allowed to offer direct competitors to Steam features in your game without penalty (some games I play have both Steam Workshop support and the game dev's own mod platform support). For another Steam doesn't try to nudge you towards their solutions constantly either (eg like in the recent article on passkeys where the user had to click half a dozen times to not use Touch ID with the Touch ID option being on every page of those clicks). And of course, there's the "Add a non-Steam game or app" button in Steam that just asks you "where's the executable" and then it gets all the non-platform features Steam offers, like the overlay, screenshots, Steam Input (I think it even supports community input profiles for non-Steam games; I'm pretty sure I've seen community profiles for Primehack on my Steam Deck), etc. Of course the Steam Deck (and now Steam Machine and Steam Frame) are constantly advertised as "it's just a PC and you can do whatever you want with it". There's no lock in; you can install competitors' stores on those devices easily.
The reverse playbook then is that Apple is trying to make every option other than staying in the Apple ecosystem a bad choice, while Valve is trying to make Steam the best option in every scenario. The difference in base philosophy is the important part.
(Of course as a profit-seeking corporation there's no guarantee they'll stay this way, particularly after gaben leaves, but I'll appreciate it while it's here at least.)
34 comments
[ 2.6 ms ] story [ 72.2 ms ] threadValve's hardware products, aside from being awesome and setting a standard that others have to match, are really an insurance policy. They ensure Valve cannot be locked out of their own market by platform owners like Microsoft or Meta using their leverage to either take a cut of their revenue or outright ban Steam in favor of their own stores (as it looked like MS might try to do in the Win8 days). By owning a platform of their own Valve always has a fallback option.
Turns out that the usual Microsoft incompetence-and-ADHD have kind-of eliminated that threat all by itself.
Also: turns out that, if you put enough effort into it, Linux is actually a quite-usable gaming platform.
Still: are consumers better off today than in the PS2 era? I sort-of doubt it, but, yeah, alternate universes and everything...
Microsoft telegraphed its intention to kill Steam. The plan was a hermetically sealed ecosystem where only cryptographically signed code could run on Windows computers, from UEFI boot to application launch. This meant users would only run software Microsoft let them, and there was no room for the Steam store in Microsoft's vision of the future then.
It is like arguing Windows is a quite-usable UNIX platform thanks to WSL 2.0.
The right way to push for Linux gaming is how Loki Entertainment was doing it.
In a 2013 interview with Gabe Newell: "Windows 8 was like this giant sadness. It just hurts everybody in the PC business. Rather than everybody being all excited to go buy a new PC, buying new software to run on it, we’ve had a 20+ percent decline in PC sales — it’s like 'holy cow that’s not what the new generation of the operating system is supposed to do.' There’s supposed to be a 40 percent uptake, not a 20 percent decline, so that’s what really scares me. When I started using it I was like 'oh my god...' I find [Windows 8] unusable." [0]
The Windows Store probably was a part of it, sure, but looking at that quote from 2025, after having your SSD broken, your recovery unusable and your explorer laggy? It's quite bitter-sweet.
[0] https://archive.is/eBP6q#selection-3645.0-3645.729
I find this framing to be beyond maddening. Sure, it wasn't an iPod, and if you measure it against that kind of expectation, of course it's a flop, because it wasn't an overnight success.
But I think it's more appropriately understood as a soft launch of an ecosystem, to strategically rebalance Valve away from the potential risk of being locked into Windows. It was also a thoughtful partnering with hardware vendors, so they weren't shipping hundreds of thousands of units to Walmart shelves was just sat there and lost them tens of millions of dollars, which is also what I think of when something's considered a flop.
But it was a thoughtful, intelligent long-term commitment to an ecosystem that bore fruit in large part due to the credible long-term commitment as the library of steamos compatible games grew and set up the Steam Deck for success. And now it looks like the wind is at their back with the new line of hardware, but I think it's best understood as a return on investment that begun those many years ago.
I think it reflects a kind of intelligence and long-term thinking that Google is pathologically incapable of, by contrast.
Yeah, it's like the people who say, oh, the iPhone mini was a flop. That was a BILLION DOLLAR product. How many companies would LOVE to have a billion dollar product???
Their original answer was a resounding "nothing" - Steam Machines solved a problem for Valve (fear of an impending "Windows Store" being added by Microsoft that would steal the battlefield from Valve), but very little for the customer.
I guess that same question needs to be asked again here: are there sufficient problems that the average game-player at home has that are better answered by a Steam Machine than a Windows 11 box? Are those real problems experienced by the broader market of people, or are those just tangential issues cared about by a more vocal few?
When I fire up my linux workstation or steam deck and browse my library, there are countless games, marked as "platinum" in ProtonDB, but do not work OOTB. Sometimes it's a later Proton version that broke the compatibility, sometimes you still need to tinker in the settings in addition to choose the correct proton version. All in all, I've spent quite some time getting games to run I just wanted to play a single afternoon as nostaliga hitted hard.
As long as issues like this are not resolved, I don't believe in Steam Machines as alternatives for consoles in the living room space.
And yes, I'm still considering a steam machine for my living room, even though I will need to support my wife and kids in getting games to run on the TV.
in my experience the older games are more of a pain to get running, as a lot more tweaks are needed
it's the case on Windows too, but on Linux there's an additional need to mess with DLL overrides DXVK settings and the like
Here’s the latest copy of the original article in The Cambridge Student:
<https://web.archive.org/web/20220924191721/https://www.tcs.c...>
First-gen product that seemed to not know where it's going? Check.
Continued quiet iteration behind closed doors despite first-gen being a flop? Check.
Sticking with the product line over many years, where most other companies would have written off and thrown in the towel? Check.
Multi-pronged GTM strategy where other products prove out key bits of next product? Check. (see: SteamOS and Proton setting the stage for Steam Deck, which in turn sets the stage for Steam Machine 2)
Deep software-hardware integration in ways that are highly salient to users? Check (see: foviated streaming for Steam Frame, Steam Deck "just works")
And sometimes, the competition is just plain brain dead. Just take EA Origin, which my wife sadly requires because her entire Sims 4 library has been purchased through that and its predecessor.
With Steam, she can easily have the Steam Client open on both her laptop and her user account on my gaming rig simultaneously. No big deal, in fact it is required for Steam Remote Play - the only thing that keeps annoying us is that you can only have one Steam client open on one machine which is annoying on a multi-user machine.
But Origin? That piece of shit software doesn't just log you out on one machine when you log in on another - no, it opens a fucking modal window telling you "you're in offline mode". Yeah no shit, my wife knows that, she just turned on the other machine!
That's utterly fucking basic user experience stuff and yet EA doesn't seem to be able to fathom that people might want to own more than one machine. As long as they can be sold FIFA lootboxes, eh?!
This is not true. It was true in 2019 when the PS5 was initially announced, but PS5 has been sold at a (slim) profit since 2021. Xbox probably sold at a loss for longer, but it definitely isn't sold at a loss in 2025.
The Switch & Switch 2 have always been profitable.
The BOM cost of the Steam Machine has been estimated at $450. They could sell for $500 and still be nominally profitable and still undercut XBox & PS5.
(That BOM cost estimate was before RAM price silliness so you have to adjust upwards a little bit).
1. Do you think that inaccuracy undercuts the point? If so, I'll correct the article; if not, I'll include it as a note in my planned follow-up. 2. Do you have the link(s) handy for those figures? If not, I can try to find them myself, but I figured it would be easier to ask first.
No iOS, no Android, just raw SteamOS with gaming and privacy focus, and fully customizable by users if they want.
Make it look really sleek and cool, and dockable.
Making competitive phones is even harder than making a desktop, and they aren't investing in Linux desktop itself either, just the components they need. SteamOS works by not running a desktop in its default mode.
I don’t think they want to wander further into malware arms races. They don’t seem to really want to maintain their anti-cheat currently, it’s notoriously poor. I love Valve but I’m not sure I’d trust them with a platform I log into my bank with.
I call it that today and I also called it one in 2003, when it suddenly demanded to be installed and kept running to continue playing Half-Life (what today would be called "vendor lock-in").
Launch a steam game to open another game launcher platform that you then create an account for and play on that game. A launcher launcher!
I'd love to believe Steam will keep being the market leader because they haven't really enshittified yet. I'd love to believe that Tim Sweeney and Epic games are so unable to read the room and so blinded by being a public company that consumers just aren't interested. But considering their biggest game is Fortnite, they are practically selling to kids, who lack any sort of market opinion of that regard. Regardless, consumers don't really buy with their wallet unless there are immediate, solvable problems in front of them.
Regarding metaverse, I believe anyone who has been on VRChat instinctively understands why metaverse was doomed to fail from the get-go. I wrote some notes about my experiences which I released while doing winter-cleaning of my notes recently: https://petterroea.com/blogs/2025/living-a-second-life-in-vr.... There just simply isn't a market for what Meta are trying to sell.
And this is why I'll always trust and prefer Valve over Apple.
they could've totally owned the casual gaming market -- but if all you're used to is ads / engagement. you miss the rest.
The reverse playbook then is that Apple is trying to make every option other than staying in the Apple ecosystem a bad choice, while Valve is trying to make Steam the best option in every scenario. The difference in base philosophy is the important part.
(Of course as a profit-seeking corporation there's no guarantee they'll stay this way, particularly after gaben leaves, but I'll appreciate it while it's here at least.)