The most exciting announcement coming out of CES this year was by far the partnership between Valve and computer manufacturer Xi3. While some gamers are understandably excited for what has been dubbed the “Steam Box,” I am not so enthused. Despite Valve’s track record, it’s undeniable that the Steam Box has some factors working against it. Below are 5 reasons why the Steam Box might fail.
In an interview with The Verge, Valve CEO Gabe Newell illuminated some of the details of the Steam Box. In terms of software, it appears that the Xi3-made Steam Box will ship with some version of Linux on it (due primarily to Gabe’s foolish vendetta against Microsoft). It’s possible that this could wind up being a Valve-customized version of Linux, but those details are still in the ether. Regardless, Linux software support isn’t widespread on Steam. Of the roughly 1800 games on Steam, a scant 40 actually run on Linux without further software modification. The list isn’t exactly a bevvy of heavy hitters, either. It’s not that FTL is a bad game (it was our 9th-best game of the year), but it’s also not exactly a system-seller. Software sells hardware. This is an indelible a maxim as exists in gaming. Without a true “killer-app” beyond curiosity, the mass-market appeal of the Steam Box might be limited.
Nobody knows how much the Steam Box will cost, but the base model of the Xi3 modular computer (said to be the design the Steam Box will be based on) costs $499.99. The specs of this system that costs more than the Xbox 360 did at launch? 16gb of internal SSD storage, an Athlon Dual-Core processor, 2gb of DDR2 RAM and a video card with 128MB of video RAM. For the computer uninitiated, this isn’t exactly a powerful system. Building a similar system using full-sized parts from online retailers like newegg.com might wind up costing about half of what Xi3 is asking. A reasonable estimate then is that a system that could theoretically replace a home console might wind up costing twice, if not three times as much. If Microsoft goes through with rumored plans to offer the new Xbox at a subsidized cost, the Steam Box will find itself at an extreme disadvantage when it comes to price point.
The most expensive computer parts in the world all have one word associated with them: custom. With Sony and Microsoft both looking toward off-the-shelf parts in order to lower cost (and Sony’s seeming abandonment of Cell processor architecture), Valve’s partnership with Xi3 seems to go against current market trends. If the Steam Box winds up being as small as Xi3 computers currently are (considering that’s Xi3′s niche, it stands to reason that it will be), it will surely require custom parts in order to maintain a small hardware footprint. What that means is that parts will have to come through Xi3′s existing manufacturing channels (the ones that make a $200 system cost $500), and it stands to reason that in an effort to keep the cost reasonable, the Steam Box won’t have the power to keep up with what surely will be powerful next-generation consoles from Microsoft and Sony. Moreover, Xi3′s stated goal of having the least power-consumptive computers on the market seems to defy the goal of offering Steam-sponsored HD console gaming. Computing muscle requires power. It’s simple physics. The best AMD video card on the market, the Radeon HD 7970, consumes 99 watts of energy every 10 minutes while idling (that is, while not actually playing games). That could be analogous to what the next generation systems are from a power standpoint (both in terms of consumption and output), and it doesn’t seem possible to keep the power load low while still providing cutting-edge visual and AI experiences to consumers.
One of the things that gamers have attached themselves to is the idea that the Steam Box will, according to Gabe Newell in that same interview with The Verge, be able to serve as a sort of network hub for gaming, allowing users to use the box throughout their house on any one of multiple displays via some sort of dongle. While this is a wonderful idea, anyone with a WiiU could tell you that the real-world application of this idea is far from ideal. Users who live in dense urban areas with heavy Wi-Fi interference (or in homes built with certain materials) may find that the Steam Box simply doesn’t work for them, or that it offers substandard performance due to latency. Also, the idea that the Steam Box would basically require a Wi-Fi network also limits its potential user base. The Xbox 360 has found its way into over 70 million homes. Of these, slightly more than half are Xbox Live users (that number includes users of Xbox Live Silver, a free service). Assuming that all of those members have access to Wi-Fi, that leaves 30 million users without at least Wi-Fi access, if not broadband access, too. The current Wi-Fi penetration (in the United States, at least), just isn’t good enough to support a console that relies on it.
How is Valve going to sell the Steam Box? If it’s sold solely through online channels, that’s a tall order for most consumers. Purchasing a new computer online is harrowing enough, even having a rough idea what to expect. However, trying to convince customers to spend $1,000-$1,500 dollars on device without really getting a chance to use it (or even see it in person) seems a bridge too far for mass market consumption. The Steam Box as currently thought is going to be so unlike anything on the market it doesn’t seem likely that the mass appreciation for it will come without it being available in stores like GameStop, Wal-Mart, and Best Buy. Those retailers might not have a reason to carry the hardware if accessories (typically the highest-margin items available for a console) are nonexistent. It’s even less likely to happen if it winds up being a digital-distribution-only device (the odds of which are 99.9%), as retailers would basically be cutting themselves out of the market by selling the Steam Box.
I wouldn’t normally bet against Gabe and Valve, but expecting the Steam Box to essentially replace home consoles is not realistic, at least not while considering the information that is currently available.
That is, unless Half-Life 3 is a Steam Box exclusive.
What do you think? Is the Steam Box going to render Sony and Microsoft obsolete in the console space? Argue with me in the comments below.
***Note: an astute commenter brought to my attention that Valve intends to release multiple hardware configurations in the coming years. While this affects specifically the aspects of the piece pertaining to Xi3, other aspects of the argument remain sound.***
Credit to ExtremeTech for the feature image.