Microsoft Xbox exec on Steam Box: selling console hardware "is a really tough business"

Valve made waves this week when it announced that it was investing in PC maker Xi3 with the goal of creating a PC that would dedicated to running Valve's Big Picture mode in Steam. While the company is in talks with many other PC makers to launch a "Steam Box" PC gaming-based console, Valve founder Gabe Newell also confirmed that Valve itself would launch a Linux-based Steam Box of its own.

Today, Microsoft corporate vice-president Phil Harrison, who has also had experience with Sony in the game console business, gave some advice to Valve and other companies like NVIDIA that are planning to launch a console-like hardware product. Eurogamer.net reports that, according to Harrison, making a mark in the industry is not for the faint of heart.

Harrison stated:

Entering the hardware business is a really tough business. You have to have great fortitude to be in the hardware business and you have to have deep pockets and a very strong balance sheet. It's not possible for every new hardware entrant to get to scale.

Harrison said that any company that enters this particular industry should also have a way to set up a good supply and manufacturing model as well as a good distribution system, adding, " ... it takes thousands of people to make reality."

Harrison did say that he admired Valve and their Steam PC game download service, but added, "... I'm not sure we would choose Steam as a benchmark of success. We would always seek to innovate and push beyond. Xbox Live as a foundation, the reach we have and the experience we deliver is a great place to build on."

In related news, Polygon chatted with Valve's Greg Coomer at CES 2012. He said that part of the reason for the company's push to launch a "Steam Box" came from Steam users themselves. He said, "They were already clearly playing games in the living room, they had all this stuff that they loved about Steam and it was frustrating for them to not be able to access it in a place that seemed like a natural fit for the kind of content that they were playing."

Ultimately, Coomer said that Steam was, in his words, "broken" when it came to playing games on a big screen living room television. The Big Picture mode is the first step towards fixing that issue and now Valve is working with PC makers to offer better living room PCs. Another element is the operating system and Coomer claims the current solutions are not meant for a TV environment.

Source: Eurogamer | Image via Engadget

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I don't know what a Steam customer is. Are they people that only play PC games? If that's the case, where does Steam fit? Do people play PC games that aren't MMORPGs?

My own gaming habits are thus: Xbox for Shooters and PC for MMORPGs. Where does this Steam thing fit exactly?

TheCyberKnight said,
Ouch.
Steam may get a reality check next fall.

exactly, instead they should focus on trying to get their service onto the Xbox platform... or just stick with providing the games for it.

The xbox success came from it being able to do everything, bringing out a console like this... that will be limited no matter what you say... Will result in failure, at least in a sense of sales.

Low expectations for this.

So... who is this marketed towards? Are they even going to advertise it properly? They've never done TV ads before as far as I know for just Steam. It would be nice to have a computer that small. If they can get good graphical power out of it then maybe I could see it gaining a little bit of traction...

KSib said,
So... who is this marketed towards? Are they even going to advertise it properly? They've never done TV ads before as far as I know for just Steam. It would be nice to have a computer that small. If they can get good graphical power out of it then maybe I could see it gaining a little bit of traction...

I wouldn't expect graphics surpassing anything you can get on a laptop. Though the shape of the chassis could support a high-end video chipset, it would have to be entirely custom built, and we would've heard an awful lot more about THAT deal by now.

The fact that this was largely pushed by "Steam users themselves" has me worried, in a way. The hard reality in all things is that the loudest voices are all too often the smallest minorities. There may have been 'noise' clamoring for a way to bring games to the living room, but that doesn't mean it was actually coming from a lot of people.

Most of the people worshiping Gabe do so because they think he's going to "save" desktop PC gaming. These people are *not* asking for a way to bring their games to the living room with a controller, and this is painfully obvious every time these people insist the Steambox is going to be designed around keyboard+mouse (hint: it won't. It'll be kb+m compatible, but it'll be just as controller-centric as Windows 8 is touch-centric).

I too find it highly ironic that for a guy who has on several occasions attacked consoles for these things is suddenly trying to make a PC more "console like".


Gabe's focus is so incredibly narrow that it bogs that mind that people are lauding him so much. His response to consumming other forms of entertainment on the Steam box should have sent off alarms in the heads of anyone who thinks they want on.


He's focusing so much on fighting the tides of change. A battle he'll more than likely eventually lose.

Bad Man Duke said,
I too find it highly ironic that for a guy who has on several occasions attacked consoles for these things is suddenly trying to make a PC more "console like".


Gabe's focus is so incredibly narrow that it bogs that mind that people are lauding him so much. His response to consumming other forms of entertainment on the Steam box should have sent off alarms in the heads of anyone who thinks they want on.


He's focusing so much on fighting the tides of change. A battle he'll more than likely eventually lose.


His response that "consuming other forms of entertainment" would be as simple as "opening a browser" did set off alarms. For me, at least. It not only confirmed that this would be running a desktop OS, but also confirmed that he wasn't anticipating app-style streaming video modules (such as on Roku, XBox, Wii, and so on) finding a home in the Steam store.

However, I disagree that he's "fighting" the tides of change, as it were. I think it's closer to 'attempting to guide the change in motion' toward an experience he believes his core audience wants. The only real questions are whether the Steambox home network actually represents the demands of his customers, and how well a tiny 290-member company can stand up to the inevitable response from the massive console and mobile gaming industry.

Valve is struggling to force platform-dependent games into a platform-independent model without any code changes to the games themselves in a way that still gives the best user experience possible. It's overkill, and it's unnecessary, frankly, when you realize that the Steambox vision could be done with 1/10 the resources and effort from a *mobile* app platform, with ecosystems already designed for portability and multiple devices.

One thing is for certain, though. Whatever it is, it will sell out on day one. Not because it's a good product, but because people everywhere have already committed to purchasing one without question in what can only be considered a repeat of 'iTablet' frenzy.

Joshie said,

........
All in all it depends on how you look at it. He clearly isn't a fan of the mobile strategy of users being able to download directly from the platform holders store (Windows Store) being applied to PC's. Of course this is because he wanted Steam to be that 'app store'.

I say that he is fighting the tides of change based upon his "solutions". Everything he has proposed has been PC based (or focused), rather than find ways to use other services to compliment what he wants to release. It's the antithesis of what users are actually doing.

I do agree with you on Valve's move on forcing games into their changes. Spot on.

It may well sell out on day one. However, I highly doubt it will sell well overall.

Most new technologies are re-wiggled mash-ups of past ideas. It's easier to present existing technology in a new way than to have a major breakthrough (and there's no shame in that). I personally don't think this Steambox idea is, er, re-wiggled enough. It's too much *just* an HTPC.

Everything else being discussed is infrastructure stuff that won't sell to mainstream consumers easily (to this day, most consumers don't even set up their own home networks--their ISPs do it for them). What Gabe has described is just time-sharing, and we were doing that in the 1960s.

Granted, having a home server is an inevitability for the connected home, in some shape or form. But the strength of a home server is the ability to take advantage of it seamlessly across multiple devices. The Steambox can't achieve this because of significant roadblocks:

1) They've already described the concept of moving *from* screen *to* screen, not using them simultaneously. In other words, really just an 'open' Wii U-esque screen hopping experience, not limited to TV+tablet. This is a one game at a time UX.

2) It would take an enormous effort, far beyond launching the device itself, to change the whole Steam licensing arrangement to allow playing the same game on two systems at the same time under the same account. Under the current legalese and system limitations, you get to play one game at a time, on one screen. Period.

That last point is the biggest roadblock of all, and the reason why any other mobile ecosystem could swoop in and wipe Valve off the market. Your Android/iOS games don't care how many devices they're installed on. Your Nexus 7 and Nexus 4 can both play the same purchased game at the same time.

Everything is relying on the belief that there's more demand for the same old desktop-style PC gaming than there is for the still-evolving mobile-style gaming, and arguments about peripherals ("keyboards are superior!") are laughably irrelevant, since any mobile platform could evolve to allow for such peripherals faster than Valve could get their whole game library to run reliably on Linux.

I don't see how steambox could gain any market share at all, as it runs Linux, and only has less than 50 games available. And even with those games available, a lot of people are having problems.. look at some of the posts here: http://steamcommunity.com/linux

They could of course try to get a deal with bluestacks to run android games through steam, but Android graphics kind of sucks. Or some sort of wine approach. But still, it would be pretty crippled.

This product would also sort fof compete with nVidias new device, and Ouya.

Gabe: if you're reading this, focus on episode III instead. It will be a much better investment. Win8 is great for desktop gaming as it is, and will probably just get better with windows blue.

If they make it so all games on your current Steam account would be available _without repurchasing_ to play on this gizmo, they've effectively won the console war before it's even released.

akav0id said,
If they make it so all games on your current Steam account would be available _without repurchasing_ to play on this gizmo, they've effectively won the console war before it's even released.

All the games on your Steam account will be available.

If they're compatible with Linux.

And if you don't want to be logged into Steam anywhere else at the same time.

He's right... but Valve does have pockets deep enough to pull it off. And a certain fanbase.

And that's why others will fail - Ouya, Crapstick, gaming tablets and there's bound to be more copycats later. Nvidia might not, but it won't be a big hit either.

Then again, those are platforms designed from scratch. Arcane, specifically designed hardware - IBM Xenons or IBM Cell alone used to cost a fortune. And own software platform for games require ongoing effort. And then there's design revisions to keep up with times. Indeed, no wonder they're still losing money in total.

It's just that SteamBox, on the other hand, is looking to be an ordinary, if prebuilt, PC, only made look and act like a console - push POWER, select a game, press START and you're in the game - without the many frustrations of managing a PC, updating drivers, updates, worrying about compatibility, files, installing programs, malware... but still being able to do all that by going back to full-blown Windows installation, essentially buying a prebuilt gaming PC, sort of like Dell Alienware or something.

Only thing that keeps it from being a complete winner (with quite a chance of being a complete failure) - availability of games for Linux. Linux has never worked out in userland. If Gabe thinks they can change that here and now - more power to them.

Phouchg said,
Then again, those are platforms designed from scratch. Arcane, specifically designed hardware - IBM Xenons or IBM Cell alone used to cost a fortune. And own software platform for games require ongoing effort. And then there's design revisions to keep up with times. Indeed, no wonder they're still losing money in total.

It's just that SteamBox, on the other hand, is looking to be an ordinary, if prebuilt, PC, only made look and act like a console - push POWER, select a game, press START and you're in the game - without the many frustrations of managing a PC, updating drivers, updates, worrying about compatibility, files, installing programs, malware... but still being able to do all that by going back to full-blown Windows installation, essentially buying a prebuilt gaming PC, sort of like Dell Alienware or something.

Only thing that keeps it from being a complete winner (with quite a chance of being a complete failure) - availability of games for Linux. Linux has never worked out in userland. If Gabe thinks they can change that here and now - more power to them.


Doesnt matter if its from scratch. Most money went into advertising. Both MS and Sony lost many, many billions the first years. And are only slowly gaining money (untill the next release)
And for them to create a proper thing to be the concurrent of Xbox, PS3 and the Wii... they would have to sell the thing at a loss.
It's a very costly market to compete, and both Sony and Microsoft are only able to because its just 1 of many divisions. And Nintendo has been around for what, 80 years by now? And unlike Sony/MS, Nintendo receives money for almost every sold game.

Valve has some backing and has some chance in success. but its a very slim one. And from what I get so far, doubt its going any far.

Wait, so someone who works for Valve claims that their own product is "broken" in the most common situation, but rather than fix it they go on a campaign complaining that Windows 8 is "broken" in some situations? How about fixing your own sh** before complaining about others?

He means it's broken in regards to when a PC is used to connect to a TV and playing Steam games *now*. The Steam Box and Big Picture are their way of "fixing" that.

Gabe has been whining about Win8 since before it even shipped, they have been shipping Steam since 2003, they have known that it is broken for a while, they are not even shipping this new device yet.

So we know Gabe was whining about Win8 because it is a competitor to his software, but can we now add whining because he was trying to cover up their failures - failures that have taken nearly a decade to fix? But he would rather whine about a new competitor, and then take 10 years to fix his problems than fix them when his own product's deficiencies were found.

The same audience who didn't buy into HTPC's before. It's going to take a lot more than Valve and PC gaming to get a larger audience. Consider Gabe's "answer" for streaming other media (music, movies, etc) to a Steam box.

"stream it from another PC in your house".

Something tells me that in a world where consumers are already streaming directly from the Internet itself to independent devices that they won't exactly embrace the idea of streaming from another intermediate device that they really don't want or need.

Sly_Ripper said,
Well yeah, duh, you obviously aren't the target audience for a Steam box...

Who *is* the target audience, then? It's an HTPC running a desktop Linux build. That's for advanced users who would already have the skills to build their own set-top box anyway.

Sly_Ripper said,
Well yeah, duh, you obviously aren't the target audience for a Steam box...

well....yeah, duh-- i'm obviously talking about my own thought on it based on my personal set-up.