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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Honestly I was saving up money to get a PS5 and ditch PC gaming. But then I saw valve’s announcement about steam machine and decided to get a steam deck when I have enough.
It’s literally a no brainer because I can play my current library at no extra cost whereas with ps5 I gotta pay for online as well as the games.
Before you go in on a Steam Deck I want to give a head’s up:
While I like my Steam Deck, it does have limits. If you primarily want to play 2D indie games, it’s absolutely perfect. You get great framerate, and the battery lasts 3-4 hours or sometimes even more.
But if you want to play 3D games from the last 10-15 years, you’re going to need to compromise. Much of the time you won’t be able to get 60fps, and the battery life drops off quick. And if you want to dock it and run it on your TV you’re still going to have some performance tradeoffs due to the Steam Deck being built for 800p gaming
If you still have a powerful tower PC but want to play newer 3D games from your living room on a TV, you could run an application called Sunshine on it, allowing you to stream to a Steam Deck via Moonlight at high bitrate (4k 60fps with relatively low latency) and the Steam Deck is good for that because it has more power to encode/decode the stream than most alternatives.
Or you could wait for the Steam Machine to release. It won’t be as powerful as a PS5, but I’m expecting it to be a good value compared to most PC’s
Tbh I’m going for the steam deck due to its portability and ability to play my existing library. I’ve made some life decisions that will make me travel a lot around countries or states so steam deck is the perfect pick for me. I don’t really play more than 1-3 games that I play everyday and all of them run perfectly on the deck.
Earlier I thought of going for a PS5/6 but it wasn’t really economical plus given my frequent rate of travel, its not feasible.
Right now, I play my games on a Thinkpad that struggles to do a lot of multi tasking stuff. Its only 2 years old but took a bad beating in terms of performance. I’m gonna get the last juice out of this laptop and continue my gaming on the deck
It sounds like a Steam Deck is a perfect fit for you then. May your frames be high and your lag minimal
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.
Lol this reminds me of that time the US Air Force built a giant compute cluster using PlayStation 3s. Idk if Sony sold those at a loss, but they certainly didn’t see any game purchases coming from the US Department of Defense
I guess this small articles provides us with the beginning of an answer? https://www.engadget.com/2010-02-05-playstation-3-still-a-loss-leader-six-cents-for-every-dollar.html
I was thinking that they might require a Steam account to order, the same way they stopped scalpers for Steam Deck, but there’d be ways around that.
It’d be hilarious if you needed something like “profile level 10” to order though.
This part’s basically guaranteed, yeah. But there’s a secondhand market and also surely some scalping companies saw the Deck launch and went yknow what? It doesn’t cost us much in the long run to make a few hundred Steam accounts now and buy some $0.10 team fortress hat on them just in case Valve does the incredibly predictable thing of releasing more desirable hardware.
Ohhh only allowed to buy steam level / 10 whole numbers only. I could get 9. Woot.
Exactly, but I don’t see anything keeping them from selling the Frame at a loss or tight margin. What else are you going to use that with but Steam games?
Even the Steam Controller is useless without Steam Input, but I’d argue it won’t necessarily sell more games. Maybe they could include it with the Steam Machine for “free” to bump the price of the machine up enough to not make sense for a company, but still sell it at a tight margin to sell more games.
Why would they sell any hardware at a loss at all? Console manufacturers do it to lock people into their ecosystem and sell them games at a premium, Valve doesn’t need that, people are already overwhelmingly favoring their store.
The same reason people go into debt for a burrito. It’s easier for people to justify a smaller cost now, and valve will make than money back later with extra games sold, especially in the case of the Frame.
As someone who loves VR gaming, isn’t that a lot of faith for the unpredictable at best market that is VR games?
Was it confirmed that you can install Windows? The video said software, I don’t remember that you could install any operating system. It comes with an Arch Linux.
I found an answer on the Steam Machine page: Yes, Steam Machine is optimized for gaming, but it’s still your PC. Install your own apps, or even another operating system. Who are we to tell you how to use your computer?
Hearing that is so refreshing. Microsoft/Google would never put something like that on their website because you are the product.
They said that you can change it if you want, but did they say they will provide Windows drivers for their semi-custom Ryzen chip?
I just realized that “another operating system” can mean so many things that aren’t Windows.
We need to be patient and wait until some crazy people defile their Steam Machine for Internet points.
It’d be interesting seeing Microsoft in a position where the vendor isn’t automatically making their drivers for them. It’s a massive advantage they have.
I’m pretty sure that is up to AMD and not Valve.
It’d be really funny if it’s designed specifically not to meet Windows 11’s arbitrary requirements. You can install Linux though! :D
You can install Windows on the Steam Deck (psychos), so I imagine it’ll be like that.
“Hello chat! Today’s challenge is to make the Steam Deck lose 20% of its performance. I can’t wait to get started!”
Look at their website. It pretty explicitly states you can do with the Gabe Cube whatever you want. Including changing the OS.
You can install OSX on there /s
Hackingtosh Steam Machine will definitely happen.
🤮
That reaction makes sense is a gaming forum because gaming totally sucks on OSX.
OSX is a great OS. I don’t know how anyone can use Windows after 7.
OSX has several things going for it, primarily, it’s got the clowns at apple running the show, thus, it has a bunch of “natural” interface bullshit that only make sense if you intend to live like a caveman and not understand that computers can function differently to physical objects.
On top of that, they pushed themselves as an “alternative” to windows back when they were even more corporate than fucking Microsoft, while blaring out the ignorant ass ipod adverts whose goal was to make the user into consumers making computing choices based on fashion. The iphone and it’s money gated, walled garden BS was just the cherry on top.
If you wanted a fucking alternative to microsoft, linux has been there for you all along instead of the “worse but shinier” osx, which mac served to just overshadow with its increased advertising budget and psychotic CEO.
And I mean that literally, Steve Jobs was actually fucking insane and a horrible person. From firing people at random, to abandoning his kids, to stealing livers and trying to cure his cancer with smoothies.
Also, it’s basically open/free BSD with more propriety bullshit on it than you can shake a stick at.
I don’t know how anyone can use Windows after 7.
Yeah, windows 8 , 10 and 11 are toxic shitholes. You know what macs did before windows started begging you to log in and create microsoft accounts? Force you to have Icloud or whatever the fuck it is accounts. You know how I know? My work laptops suck ass and forces me to have mac accounts, and is complaining that it can’t sync HEALTH DATA. MY WORK LAPTOP WANTS TO SYNC HEALTH DATA.
Apple blew the doors off for enshittification. They primed the fucking pump, and now microsoft and google are following through the door, you guys are like “yeah, putting osx on a steam box would be cool” fucking no. Ew.
It seems like you’re too emotionally invested to have a normal conversation like a person.
Health is an app you can delete. It’s not forcing you to do anything. You don’t even need iCloud for anything. You don’t even have to use their walled garden App Store. I know because I download and install shit from the internet all the time.
Yes, it’s free/bsd based. Who cares? I just want it to work and the chassis and build quality on the laptops are excellent.
I see what you mean, but this device is a little overtuned for an office PC, at least GPU wise.
There are quite a few office jobs that benefit from a decent CPU. Anything to do with images/photos/video/rendering for example.
Plus PCs cost fuck all compared to staff, may as well get them efficient tools if they will be using them a lot.
You’re 100% correct at a sane company. At my employer the hardware team is incentivised to cut costs and impacts to productivity are someon else’s problem. Corporate metrics lead to some pretty hilarious situations.
You get what you measure
This happens so often. The new version of the framework our frontend developers use has massive performance problems, which meant that our FE devs couldn’t test their changes locally, they had to upload a release to the cloud to test every single change. That reduces productivity to close to 0. A developer isn’t cheap, so you’d think the company would be quick to issue macbooks that we are also allowed to have so that they can work again.
Nope, it took 3 months for our manager to convince the helpdesk that they can get macbooks. Helpdesk originally said they’d have to wait for 2 years for the scheduled replacement of the laptops.
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.
On the other hand, even if they don’t “make back” the loss, you can look at it as: how much money is Valve willing to pay to become a “mainstream” living room console competitor? Lose a couple billion dollars on Machine, but get 400k “give valve money, probably” machines plugged into TVs. Sony and MS have other divisions and they AND Nintendo have shareholder responsibilities. Those conpanies cannot tank a single year of number go down. Valve can, and surely there’s a price that Valve would be willing to play to be “the xbox”.
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.
Console manufacturers haven’t sold at a loss in a long time.
They tend to at first launch. This article says it took 6 months for the PS4 and a bit longer for the PS5 to stop selling at a loss. It’s no longer the whole product lifecycle, but they are still sold at a loss at least at the start. I think that implies that hardware sales aren’t a major profit center, so even if they are profitable, there’s probably not a ton of margin.
Does Nintendo not sell at a loss?
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.
If it was a loss leader and non gamers also look to buy it and never touch steam. Doing that at a loss isn’t a great idea.
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.
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.
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 think that one was also significantly a publicity thing, they made videos and announced it as a neat story about the air force doing something “neat” and connecting relatable gaming platform to supercomputing. I’m sure some work was actually done, but I think they wouldn’t have bothered if the same sort of device was not so “cool”
There were a handful of such efforts that pushed a few thousand units. Given PS3 volumes were over 80 million, I doubt Sony lost any sleep over those. I recall if anything Sony using those as marketing collateral to say how awesome their platform was. The losses from those efforts being well with the marketing collateral.
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’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.
Doesn’t the new controller have internal batteries?
I think they’re referring to the Steam Frame controllers, not the Steam Controller.
The steam frame controllers use AA batteries, the steam controller has a lithium ion internal battery.
Also it does have a USB port but the primary charging method is via the pogo pins. But obviously you might want to recharge from a wall outlet so they also include a USB port. But that’s obviously going to get used far less often than it would otherwise.
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.
To be fair, I don’t watch either of those youtubers. So I had no knowledge of this.
>.> what have I done
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
Im not gonna make any statements but I think this video might have some credibility. It comes from the person who gave the early heads up for the steam hardware launch :3
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.
And honestly, we probably should have expected this from the leaked benchmarks. It was already showing hits of using a separate 7600
AFAIK: It depends.
The Cube: No
The VR headset: Yes. But it’s rather an SoC.
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.
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.
“I’m not interested in that product. It is impossible for someone to be interested in that product.”
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
I will, thanks.
Edit
Those are just mini APU based PCs meant for office work. Not really compact gaming PCs with integrated GPUs.
Built-in GPU and VRAM with the CPU, RAM and cooling optional.
I don’t think that’d be a wise idea. After watching Valve interviews, it’s clear that they designed the entire system around a specific max TDP. Apparently they figured out the TDP, picked a fan to move it, then designed the rest of the cooling system based on that.
If you start swapping out different CPU’s that’ll change the TDP and very quickly become a problem. Plus, the CPU is soldered to the board. Having a socket to allow for swapping would require a redesign of the cooling to account for the increased height
Yeah, it would probably be a better idea for AMD to sell variants of the APUs being used in the current generation of Xbox and PlayStation.
My guess is that those chips are under exclusivity contracts and/or they don’t want to undercut their lucrative discrete GPU and CPU market.
Why sell one efficient product when you can sell two more expensive ones?
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.
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.
Yeah they said they are pricing the Steam Machine at PC market prices, but they do having to contend with reality. There are consoles on the market that are more powerful at a lower price point, it will dampen their sales for sure. I mean most pcgamers probably have more powerful hardware already, what is the incentive? Sure small form factor, but is it worth a premium price to the average pcgamer? Console peasants will turn their noses up at it, so who are they marketing to?
I can see the Steam Frames selling better due to it being a fully untethered VRPC headset that can play more than just VR games. Not to mention you can stream from a more powerful PC to the frames making the battery last much longer and better gfx fidelity.
The Steam Controller has to contend with a flooded market of users used to using one type of controller, so a little bit of an uphill battle there too.
I mean most pcgamers probably have more powerful hardware already
According to Valve, it should outperform or match 70% of current PCs owned by gamers. So while not crazy powerful, it might be an affordable (hopefully) upgrade for some more low spec gamers.
…the fuck is a “loss leader”?
A product sold at a loss/very attractive price to attract customers. The idea is that they customers will come due to the cheap price of a desirable product and buy additional other stuff at the store, which should hopefully make up for the loss.
E.g. a restaurant advertise cheap burgers to attract customers, and then make the profit on alcoholic beverages that customers buy alongside the cheap burger.
So the Razor and blades model (printers) but in games?
From the second sentence on the page:
It is different from loss leader marketing and product sample marketing, which do not depend on complementary products or services.
So the Razor and blades model would probably be the more accurate term for what people thought the new steam hardwate would be, yeah.
Though steam won’t lock you to their services.
