The Steam Machine is not a typical games console and that’s fine

It’s fair to say that the Steam Machine has attracted a lot of media attention since its unveiling earlier this month, both as a pleasant surprise and a subject of debate among gamers of different backgrounds and tastes. But not a single aspect of Valve’s upcoming system has been discussed more than its – officially unknown for the time being – price point. It’s obviously the most important missing piece of this puzzle and one that will ultimately determine the kind of impact the Steam Machine can expect to have in the games market come 2026.

Well, it seems that we now have at least some idea of that missing piece’s shape, so to speak, as the debate about its pricing mainly revolved around the possibility of the Steam Machine being priced as a typical gaming console: that $399-$599 range the various Sony, Microsoft or Nintendo systems have historically fell within. As it turns out, Valve does not intend for the Steam Machine to be priced like a games console, but rather as a PC of similar tech specs that depends on other advantages in order to deliver on value.

That is what Valve’s Pierre-Loup Griffais noted during an interview with Skill Up‘s Friends Per Second podcast. “If you build a PC from parts and get to basically the same level of performance, that’s the general price window that we aim to be at”, Griffais claimed. “Obviously our goal is for it to be a good deal at that level of performance, and then you have features that are actually really hard to build if you’re making your own gaming PC from parts”.

A custom-made, special PC rather than a mainstream games console

What Griffais referred to in that interview is the impressively compact size of the Steam Machine, its quiet operation, its HDMI-CEC compatibility, its enhanced Bluetooth functionality and its ability to use the Steam Deck’s microSD cards for direct access to games stored there. These are all nice-to-have or quality-of-life features but, given the choice, most consumers would likely prefer a more affordable product instead.

That’s just the thing, though: the Steam Machine does not seem to be a mainstream consumer product aiming for the lowest possible price anyway. That is because, well, Valve is not Sony, Microsoft or Nintendo: it’s a software and services company that does not have extensive experience on supply chain optimization or decades-old ties to leading Far East manufacturers. No matter how smartly put together, the Steam Machine would be extremely difficult – if not impossible – to build and ship at the cost a PlayStation or an Xbox can reach at scale.

What’s happening here is obvious to anyone following the console gaming market for long enough: Valve has decided to not subsidize the Steam Machine – to not sell it at a loss so as to hit a specific price point – contrary to what the typical game console business model dictated in the past. Sony, Microsoft and Sega used to do that in order to rapidly build a customer base for their home entertainment systems, expecting to make a sizable profit later on through selling games, accessories and services to those customers.

It was a model that – more or less – worked. Until recently, that is, when it became clear that economies of scale – for reasons that are debatable but nonetheless grounded on reality – don’t work the same way anymore and that manufacturing costs do not decrease fast enough to make a tangible difference for consumers. In the case of the Steam Machine, though, that’s only part of the story.

Go for cheap or go for sustainable?

There are a couple of reasons why Valve is not subsidizing the Steam Machine and – while we would all have loved to get a compact, quiet, capable computer for $499 – they are actually valid. The typical gaming console business model, for instance, does not apply here: this is a true PC, meaning that its owner is free to install different operating systems on it, use any peripheral or accessory he/she wishes with it, leverage any game store he/she prefers with it. Online multiplayer is free on PC too. As a result, there can simply be no expectation that Valve would actually make back the money invested in each and every Steam Machine loss-inducing sale.

That alone would be reason enough for any company to not subsidize any device. Then it’s our current point in time – a weird one for the PC industry as a whole – where Valve isn’t able to even know how much it would cost the company to subsidize the Steam Machine. DDR5 memory module prices have skyrocketed, SSDs have become more expensive (both in a matter of weeks) and whether the 8GB of dedicated onboard graphics memory the Steam Machine sports is unaffected by all this also remains to be seen. There’s just too much uncertainty around the cost of key PC components these days for anyone to risk taking a hit on any kind of computer system – let alone a home entertainment one.

Regardless of that, though, it seems that Valve had already settled on not selling the Steam Machine at a loss: clearly, the company would rather try to build a sustainable business around it instead of concerning itself with how to make up for that loss. It may sound like a choice that’s not consumer-friendly but, in reality, that’s exactly what it is: a choice with the highest chance of leading to an outcome that benefits consumers and Valve alike.

Yes, Valve is a rich company. Yes, it could probably afford to not make any money off the Steam Machine for some time. But the last thing we need right now is another gaming platform like the Xbox. A venture relying on ambition instead of a solid plan. A format that’s basically buying time in the hopes that it establishes itself before losses catch up. A failed attempt at something that was not based on a clear vision and was not of great interest to the company making the attempt in the first place.

No. What we need right now is a new, PC-based gaming platform that can flourish alongside what Sony and Nintendo currently offer or will be offering over the next few years. For that to happen, this platform needs to be financially healthy, it needs to evolve at a steady pace, it needs to be extremely well supported in terms of software and core functionality. Since Valve has already proven it can pull this off with the Steam Deck, we know that the chances of doing it again with the Steam Machine are high.

So – in the greater scheme of things – it’s not great, but it’s OK if such a system costs e.g. $699 instead of $499. It may very well prove to be an acceptable price to pay for a competitive, dependable games platform long-term. One that will not just fizzle out if it does not happen to reach dozens of millions of players, you know?