Can everyone please stop claiming and speculating that Valve’s new hardware will be loss leaders? If you watch LTT and Gamers Nexus’s first videos on the announcement, they actually spoke with Valve’s engineers. And the Valve representatives already said that the new hardware WILL NOT BE LOSS LEADERS.
There isn’t even evidence that the Steam Deck was a loss leader. All GabeN said was that the lowest cost launch model was priced “painfully”, which doesn’t necessarily mean it was sold at a loss, it could easily have been sold at a very tight margin.
And no, low margins does not meet the definition of a loss leader. A loss leader is a product sold below cost, in that every unit sold actually costs the seller money.
I get the desire to speculate on new hardware. It’s fun and it helps pass the time until we hear more info from Valve. But there’s limits to what is reasonable. Valve has already stated that the new hardware won’t be loss leaders, so hoping and/or claiming they are isn’t reasonable.
Sorry for the rant, but all of the comments that seem to have only skimmed headlines are quickly getting to me
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It can’t be a loss leader.
The steam machine is, hardware-wise, just a regular Mini-PC. Valve even lets you put whatever OS you want on there. So if this was a loss leader, that would mean that non-gamers and even small businesses would buy these, would install Windows on them and use them as office PCs, with Steam probably not even installed on the PC.
With the Steam Deck, the form factor made it impractical or at least really weird to use them as office PCs. The steam machine doesn’t have that issue.
Isn’t quest 3 sold at a loss? Selling similar hardware at no loss will present a challenge.
Though, at the same time, there’s not much wrong with making low quantities of something and selling them at a profit, slowly.We could, you know, just wait and see.
*ducks*
I would be happy to wait and see but idiots online keep trying to insist it’ll be $2,000 even though the hardware isn’t close to worth that much. Some of these people are big influencers and really should know better.
But will the new valve hardware help fill the empty pit in my chest?
WHY YOU LITTLE…
If you don’t have a rigid and openly hostile opinion within 3 seconds of a new product announcement, you are an anti-capitalist commie!!
… Duck… Goose.
Duck Game? Goose Game? OMG … Duck Duck Goose Game! I will be a billionaire
but… I want it now?
To be fair, I don’t watch either of those youtubers. So I had no knowledge of this.
Console manufacturers sell at a loss because they need to sell the console first before they can sell anything else. They can expect to make that money back on software the user could not have bought without the console.
Valve doesn’t need people to buy Steam Machines to get them to start using Steam. In fact, I suspect most units sold will be to users who are already invested in the ecosystem. Selling at a loss would just be a straight loss to them.
Console manufacturers haven’t sold at a loss in a long time.
I agree, it won’t be huge gains directly for them, but even moving people off of Windows benefits them by removing control a competitor (Microsoft) has. I somewhat agree that it won’t be sold at (much of) a loss, but maybe at cost. I’m sure they expect manufacturing prices to go down over time, and engineering was a one-time investment, so sold just below cost doesn’t seem unreasonable to me at launch, which then becomes at cost or above in the future.
This all depends on if their goals for it are short-term or long. Historically, they seem to target long-term. That’s why I think it’ll be as low as they can make it, which they also said they’re doing by only having 8GB VRAM as cost savings. They want to drop the price as low as they can to compete. They won’t compete at $1k. I doubt they’d compete at $600-700. I suspect they’re targeting $400-500, which seems like a reasonable cost for the hardware too.
They may be trying to muscle in on traditional console territory.
Steam has a well tenured reputation for having inexpensive games. They may be leveraging this to appeal to the console players turned off by the all recent price hikes.
I suspect the gabecube may be close to if not, at cost. I don’t think it’ll be at a loss.
Gabe has previously claimed that they developed the index because they didn’t want VR to die and even gave grants the game developers who made VR titles.
So it’s established that Steam is big enough and secure enough to risk cultivating new or disrupting old markets.
Operationally steam has low overhead and insane profit margin. Unless they fuck up the steam store they’re guaranteed massive profit.
If the new hardware flops and they lose a bit of money; Gabe just buys one less yacht and steam ticks on as normal.
As you say valve are incentivised to do this because it will move more people over to Linux. I suspect that they want that more than they’re really bothered about hardware sales so while I don’t think it’ll be sold at a loss, because frankly that would be stupid even if they could afford to do it, but I don’t think it’ll be anywhere near as expensive as some people seem to be claiming.
Probably true, but there is a chance they might convert some console gamers…
But not enough to bet on it with a loss leader probably.
I was expecting an APU
…and you got one.
No, the Steam Machine has a CPU and a pcie GPU.
Even if you could argue Raphael was an ‘apu’ since it has the 2CU GPU, those are lasered off on Steam Machine’s CPU.
AFAIK: It depends.
The Cube: No
The VR headset: Yes. But it’s rather an SoC.
I’m aware of Valve being very generous with warranty/replacements of controller hardware for the Index. Even years after the warranty is up. But I think this is because of the major durability issues and known defects that the Index Controllers have.
In any case, Valve seemingly has lost money on a certain percentage of Valve Index kits/controller hardware. Based on how many people I know, including myself, who have gotten replacement hardware from Valve. Sometimes many times for recurring issues.
But I’m not aware of Valve doing the same for the Deck.
Edit: and you can tell they focused really hard on making the new controllers more durable:
- No charging port to melt
- durable sticks that won’t start drifting
- No special finish on the controller that can be worn/scratched away
- No internal battery to go bad
- seemingly far fewer delicate parts
Funny point on the melting charging port. 2 years or so after the Index came out, SteamVR started warning using with a status dialog that told users to stop charging their controllers while they use them. They never accounted for long play sessions and people who would want to charge while playing.
USB-C has durability issues when used like that.
To be a loss leader doesn’t the need to lead to something?
The only way it could make sense that they’re selling these at a loss would be - oh yeah. They’re coming straight for Nintendo / Sony / Microsoft now, huh?
The day I see a steam console in wal mart is a day I will be very happy.
For Valve it would ideally lead to a new Steam account being created. Which would make sense if someone got one as a gift or something, naturally they would set up a Steam Account if they didnt already have one.
Yeah.
Also the new offerings are very much something Johnny Joe who has only ever owned a PlayStation, Nintendo, or Sony console would potentially buy.
Of course Johnny Joe would put the entire thing up his ass and die from heavy metal poisoning because he’s an idiot, but his peers would actually use them.
I guess that would depend on the front end and game support. If it is any less user friendly than Xbox or Playstation, people wont want to use it Johnny Joe and Little Timmy don’t want to fiddle with a bunch of settings and constantly change stuff to get games working. The Steam Deck does okay but I still find sometimes it needs some… coercing… to get some games to work right.
If they dial it in right, everything should work properly out of the box without needing settings changes.
I’d imagine they’re just porting over the exact sameuii that’s already on the steam deck.
It’s great.
Some of the third party steam machines from 2015 actually had some distribution to Walmart stores. I saw it in the flesh!
To be a loss leader doesn’t the need to lead to something?
https://en.wikipedia.org/wiki/Loss_leader
You have no idea what you’re talking about.
The very first line:
A loss leader (also leader) is a pricing strategy where a product is sold at a price below its market cost to stimulate other sales of more profitable goods or services.
So the answer to their question is “Yes, a loss leader needs to lead to something”. I have no idea why you think they have no idea what they’re talking about.
Since they’ve said it’s basically an entry level gaming PC that will cost more than a console, I think the >700, <$1000 speculation is most likely.
Personally I don’t think I would say that most people would consider a $1,000 PC to be entry level. To me entry level means something that a kid could save up their pocket money for in a reasonable amount of time maybe with a paper route to supplement. I’d say entry level ends at about $700 just to throw a number out there. For $1,000 you could get a PS5 and a PSVR2
that will cost more than a console
Is that part of the quote? Because I just saw “priced like an entry level PC, not like a console”, which was more ambiguous than saying “priced like a console”. One man’s entry level PC is $300, and another’s is $1000. I have a mini PC with the power of a PS4 Pro, which I’d easily consider entry level, and it cost me $530 about a year and a half ago.
It’s possible I’m just interpreting the quote wrong. I figured they were making the distinction between “console” and “entry level PC” as a way to say “The price isn’t set yet, but don’t expect this to be $400-500”
Yeah, leaving it ambiguous like this leads to wild speculation, and I think you misquoted that with your own assumptions. You might be right, but Digital Foundry seems to think $400-$500 is possible. Given the cost of my own mini PC, which is older and requires higher margins than Valve can get away with, I would even believe $400-$500. But we just don’t know. Everyone’s best guess for the price of this thing has a low floor and a high ceiling, which will make this all really funny once we know the actual price.
I will be so impressed if they manage that. It would be a day 1 buy for me at that price.
It’s not particularly great hardware. It’s fine, but not great. The most obvious thing is 8GB VRAM, which is bare minimum for modern gaming really. Add in that they’re buying in bulk, that price seems reasonable.
I know they don’t have the same supply chain at all but Apple sells an entry Mac Mini for $600. That makes me feel like a similarly priced Steam Machine is possible.
Apple mini is a hard comparison to make because the cheapest mini is a loss leader. Add a bit of extra ram or extra storage, which you have to do since the base model is very limited and the only way to get it is through Apple because everything is soldered together, then it is suddenly more than a $1k PC. They make the profits up with those upgrades which are practically mandatory and grossly overpriced.
I wouldn’t be sure the mini is a loss leader…
Let me show the math:
The base M4 model is 16GB ram and 256 GB of storare and it costs $600, “cheapest minipc ever with such performance”.
The 512GB storage model costs $800.
May I point out that 256GB of ssd storage does not cost $200.
The 24 GB model costs exactly $1000.
No matter how much ram prices are ramping up right now, 8GB of sodimm ram does not cost $200…yet.
Anything else above those specs throws the Mac mini into $1k+ territory. It can go all the way up to $2600.
Now, Apple rarely publishes manufacturing numbers to the public. But historically this has always been their strategy. A base product that seems too good to be true (because it is) that leaves buyers wanting a bit more. For which they get skinned alive, price wise. Of course, I can’t be 100% certain that the base Mac mini is sold at a loss. But evidence suggests the $600 mark is priced exactly to act as a loss leader.
The cheapest mini ain’t a loss leader if no one buys it
I’m right now in the process of building an “entry level PC” from components, here defining it as new currently produced off the rack parts, no used, no refurbished, and with a Ryzen 7500F and a Radeon RX7600 “AMD can’t decide whether their cards get an XT or not, so why should I?” I price it out right at $900. To go much below that, I’m gonna have to resort to some jank.
Dumpster dive a core i5 10400F Optiplex, stick a GTX-980 in it, install Linux Mint and you’re making 120FPS in CS:GO for the price of a foot pic.
Your entry level PC is what I would have called high end as little as four years ago. I built a machine in 2021 with a Ryzen 5 5600x and an RX 6800 XT; it still runs the latest UE5 games at high settings. I would call that above and beyond entry level.
It’s a little hard to comment on high end 4 years ago with low end now because technology marches on, but no I don’t think it would.
I also built a PC with similar specs for my cousin (we’ll call her Lila) to that in October of 2022, Ryzen 5600X/Radeon RX6800 (non-XT). Built that rig for my cousin. Socket AM4 B550 chipset, 16GB DDR4-3200 RAM. I had a budget of $1500, $500 alone went to the GPU. The 6800 was two years old at that point. Solid mid-range PC that can handle 1440p gaming with no questions asked…okay one question asked: “are you sure you want ray tracing enabled on an RDNA 2 platform?”
You could go higher. 32 or even 64GB of RAM, a 5800X3D CPU, a Radeon 6950XT or RTX-3090 would provide much more solid 4k gaming with significantly better ray tracing…for a couple more grand.
The machine I built last year, a Ryzen 7700X/Radeon 7900GRE for myself. I spent $2000, I got socket AM5, 32GB DDR5-6000, a 16 thread CPU, and the third-to-highest GPU in the range. This thing does 1440p ultrawide or reaches into 4k with aplomb and ray tracing is worth turning on. You can still go up from here; the 7900XT and XTX are even more powerful and again Nvidia offers even higher, and there’s several CPU SKUs above me. Mine is a mid-to-high end PC, I expect it to be relevant for 5 more years, then I’ll buy a Ryzen 11800X3D on clearance for it.
Meanwhile, the PC I’m building now is for a 12 year old (Lila’s daughter, let’s call her Maggy). 16GB of DDR5-5600, a spec’d down 6-core without integrated graphics, the pack-in Wraith Stealth cooler, and a x600 tier GPU for a solid 1080p experience, more than enough for the hand-me-down 1080p60 monitor she’s gonna get with it. This computer is the same generation as mine, but less than half the price at $900 and change. And I honestly struggle to build much lower than that without resorting to used parts, new old stock, or jank.
Not like a console says not a loss leader to me.
They can’t sell them at a loss without a locked-down ecosystem. Sony learned that the hard way with the OtherOS support for the PS3 that lead to a ton of them being purchased to build cheap supercomputer ls and never spending a dime on games or software to cover the loss.
IIRC, the Deck, at launch, had a limit per Steam account, and it had certain requirements. There’s no reason they couldn’t do something like that here. Sure, it makes it harder to convert console players if they do the same technique, but it could be restricted sales based on something.
I think that was overstated. Sure there were some “fun” projects for fun or publicity.
However supercomputer clusters require higher performance interconnect than PS3 could do. At that time it would have been DDR infiniband (about 20 Gbps) or 10 g myrinet.
Sure gigabit was prevalent, but generally at places that would also have little tolerance for something as “weird” as the cell processor.
OtherOS was squashed out of fear of the larger jailbreak surface.
The US Air Force built the Condor Cluster out of 1,760 PS3s in 2010 which I believe saw some actual use. So more than just publicity stunting.
I wonder if GPU/motherboard manufacturers are not leaving money on the table by not selling an all-in-one gaming motherboard like the one in the Steam Machine.
Built-in GPU and VRAM with the CPU, RAM and cooling optional.
On the steam hardware page it says the CPU and GPU are discrete although also “semi-custom” which I think means it’s not Gigabyte and has some cooling features that are tailored to the form factor.
Why would anyone who’s in the market for a by-itself motherboard ever want something you can get as a modular piece as a built-in to another expensive piece?
Besides, if you want everything soldered on you can just buy a laptop motherboard.
Or a Mac
For the same reason that people are interested in the steam machine. It’s nice to be able to just throw some money at people and get a complete product. I can see businesses getting these things if they need a moderately powerful GPU for business reasons. Unless valve go utterly mad on the pricing here, it’s going to be much better value for money than a Mac mini, and it’ll have better compatibility with existing software as well.
For the same reason there’s other options. Having options alone is more than enough reason.
A motherboard with a built-in GPU has obvious price, cooling design and size advantages.
The only things I suggest to be soldered are the GPU and the VRAM since GPUs are extremely sensitive to their memory setup. CPUs can use off-the-shelf stuff without issue.
The niche is already filled by NUC sized PCs from China.
Where would one be able to see their stock? All I seem to find are $1500 PCs.
Try at minisforum or beelink
Cost aside. If they don’t price it competitively between the Xbox and the PS5, the Steam Machine will be DOA.
The Deck is a perfect example of what they should try to replicate. If they don’t do that, it will flop.
It’s a small computer, it isnt going after the Xbox or PS5 customers. It’s going for the people who want a computer in their living room.
This comment is so silly and yet I keep seeing it everywhere. What do you think the Xbox and Playstations are? What is it that xbox and playstation customers are looking for that this small computer isn’t?
I know my case is specific but having a Jellyfin running on a Steam computer looks to me as good case for having a computer in the living room. Adding a TV applications to Steam such as Netflix is also a case. Then there are people who have their workstation close to the TV so they can use it instead of their laptop and just switch displays with one of these HDMI branching dongles.
What do you think the Xbox and Playstations are?
Consoles.
What is it that xbox and playstation customers are looking for that this small computer isn’t?
I have a hard time even figuring out what you’re trying to ask here.
Consoles.
Consoles are just small computers lol
I have a hard time even figuring out what you’re trying to ask here.
Don’t know what else to tell you. Person I replied to said console customers aren’t interested in consoles. That’s silly
No, it isn’t, in practice. Xbox and PS5 have more in common with my iPhone than my desktop PC or NAS when it comes to being able to do what I want with it.
It will be interesting to see how proprietary the Steam machine is. That’s how I’d end up classifying it as console or miniPC.
The steam deck is also a small PC, just like the consoles and was priced perfectly for success
None of those consoles would directly boot into desktop Linux with just a few button presses.
Having more features and flexibility than other consoles doesn’t take away its main function and selling point.
As far as how most people use their computers there is little difference.
I don’t use my PS5 to surf the web. I know you can use it to watch movies and stuff, but I don’t use it for that either.
At best, it depends on what kind of user most of the console owners are.
You are correct in that all technically fit the definition of computers. However consumers don’t care about technical definitions or think rationally about purchases. They don’t all do a rational analysis of the products on the market that would accomplish their goals and spend accordingly. They walk into GameStop and buy one of the boxes that makes call of duty show up on their living room tv. Just like the Deck fits the definition of a handheld computer with a built in screen and controllers for playing games but isn’t stealing any customers from the switch.
Deck isn’t selling millions and it’s doing just fine. The Steam Machine will be a small computer box priced as such and there won’t be a single person that decides to buy it over a ps5, and that’s fine. Valve doesn’t have to compete with consoles cause they don’t make consoles.
Valve themselves have said that the Machine will not be priced like a console but like an entry level PC whatever that means. The only people that will notice this to buy it are people who already know what a PC is.
I think the difference is that the Xbox and PlayStation are locked down to their respective ecosystems with monthly subscription and only one online store. Microsoft and Sony have almost guaranteed return based on that alone. If valve prices this as a loss leader what’s to stop a large corporation to buy 20k steam machines and use them as computers instead of consoles. Then valve is just eating that cost with no return on the other side.
The Ukraine military has been using steam decks on the front line Do you really think it’s affected their bottom line?
Hard disagree. I think that’s exactly who they’re going after. That’s why they added all the console features like CEC, wake on BT, background updates, and a controller-first interface.
I think that’s pretty clearly who they’ve been targeting for >10 years with SteamOS.
I’m not sure cost can be set aside from a price discussion when they’ve explicitly stated it won’t be a Costco rotisserie chicken.
With the number of consoles sold this generation, I’m not sure where the limit is for what people will spend to play the games they want. With console pricing has trailing budget gaming PC’s, I could see a number of people getting a Steam Machine in lieu of the next Playstation or Xbox.
What would be interesting to see in the future is the split between units sold to lifelong console players making a change, and pre existing Steam users with stuffed libraries buying one for the couch. If the latter make up the majority of sales, but they priced it like a chicken, that’ll be a problem pretty quick.
Hopefully it shakes out well and indie game developers reap some well deserved rewards.
Is the machine competing with consoles? I thought it was just packaging an adorable sized pre built PC.
I think this is the goal that it would be priced competitively with the Pro or higher end consoles
They’ve built an ecosystem that gives you that console experience and if you really want to use it as a PC then you can.
The whole thing screams high quality experience for those that want it to just work or those that want to tinker
They really know their audience
Steam’s business model does prevent it from pricing its consoles like Sony, Xbox, Nintendo, etc. since they need the console itself to be profitable, not just a means of bringing in games sales.
It’s plausible that they’re taking into account an uptick in overall game sales from this console - at least for me, I’ve been purchasing new games mostly off of steam rather than playstation/nintendo ever since I got a steamdeck - but you’re right that they aren’t going to sell at a loss.
Regardless of the price (and whether or not I even buy one), I think it’s healthy to have another “big” player in the console market.
Regardless of the price (and whether or not I even buy one), I think it’s healthy to have another “big” player in the console market.
Tbh, I think it’d be healthier if the console market finally died and Playstation and Nintendo migrate to PC. Closed off ecosystems are anti-consumer
I‘m always amazed at the amount of people believing the Steam Machine will be sold for the same or less than the most expensive version of the Steam Deck while being six times as powerful.
Just playing devil’s advocate here. I don’t necessarily disagree with you, but there are some interesting factors at play.
- The Steam Machine won’t need a screen or battery, two of the most expensive components on the Deck. So that can go into better CPU/GPU/RAM instead.
- Valve proved they can make a successful physical hardware product with the deck. That gives them a lot of negotiating power with AMD to get the best deal they can.
- Unlike with the Deck, they’re releasing three new gadgets in almost all major countries simultaneously. That means they may have already started manufacturing months ago, and are benefiting from economy of scale at an entirely new level.
Steam Machine is also bigger. Small costs money if you want powerfull.
Also, it’s newer hardware.
I think it will be priced at least a 100€ above the Deck, but I would also be willing to pay that for a console/living room computer.
I’m fully expecting an 800+ USD price tag. And I’ve made my peace with that.
That’s my average, but wouldn’t be super surprised if it was up to $1000 due to tariff and AI shenanigans
The other problem is that the tariffs could be totally different by the time it releases. I fully suspect that the tariffs are the reason that we haven’t got a price yet.
It would be funny if it is noticeably more expensive in the US though like with the Switch 2.
Really I’m just hoping it’s not much more than a PS5 Pro or Xbox Series X.
I don’t want either of those, but would love a gaming PC, but don’t have time to build or have the money to shop one really.
So this is a really good above middle ground, assuming it’s less than 1k.
Please Valve take my moneys
I actually think that, while it’s maybe a fun topic for idle conversation…it doesn’t have a huge impact in the way traditional console pricing normally does.
With a traditional console, what the console vendor chooses to do on hardware is what you get. Maybe, as with Microsoft on the Xbox Series X/Series S, you get a high and low end model, but that’s as much choice as you get. All the games are made for that hardware, and whether the platform lives and dies depends on it.
But…that’s not really true of the Steam Machine. It’s just another PC, albeit preconfigured for Steam and HTPC-oriented. If you want to get a lower-end PC or a higher-end PC, you have the option of getting one and plugging it into a TV and running the same games on it and save some money or with a bit more visual bling. The games for PCs are already more or less written to scale up and down with hardware.
And it’s not like Valve’s platform is gonna live or die based on the Steam Machine the way a traditional console generation is, where success of a hardware console is high-stakes for the manufacturer and the players in successfully getting a game library going. I’d guess that it might help Valve make strategic inroads into gaming in the living room. But even if it completely bombs, Valve is gonna keep right on selling games to people to run on PCs (and the Deck) and their huge game library isn’t going anywhere.
I think comparing it to a console is the wrong mindset. It’s a computer first that can also be a console. It’s also a pre built Linux based computer you can have a higher degree of confidence that things just work even after updates. It’s a legitimate competitor for a new windows PC as much as it is a console competitor.
