> Over the past year or so, that has changed quickly and significantly, most visibly for RAM and storage components. There are a variety of reasons, all of which are affecting hardware products everywhere. The overall effect is that our original goal for the price of Steam Machine is no longer viable. So the prices we're sharing today reflect the state of the world for manufacturing; or, more accurately, it reflects the price of the components as we've secured them over the past 6 months.
Take notes about the tone, the communication style, the honesty that you can feel by reading those words. There are no problem that can’t be alleviated (if not solved) with good communication to your customer, and you can bet that Steam knows damn well theirs!
I believe in you Gabe.
We all know why hardware has become unaffordable even if Valve hasn't spelled it out.
But thats my perspective, which obviously I feel like is closer to the truth on the ground, wouldn't claim it's some universal truth though.
We'll see actual outrage when the masses defer new smartphone upgrades due to price bumps.
Edit: looks like it took 10 million PS5s to break even. The article is 5 years old I wonder if it’s true in 2026.[2]
> The existing industrial arrangement at the time was that of a bundled console-plus-cartridge business model, where the console manufacturer (say, Atari with its VCS/2600) sold the console at a loss and cross-subsidized it with the money made on cartridges sold with a huge profit margin.[1]
[1] https://thereader.mitpress.mit.edu/how-nintendo-bled-atari-g...
[2] It took Sony years to stop losing money on PS3 sales, but the company stopped selling the PS4 at a loss around six months after its debut in 2013. The PS5 has taken ever so slightly longer, but it’s clearly not repeating the costly exercise of the PS3 despite early reports suggesting Sony was struggling with PS5 pricing due to expensive parts.
[2] https://www.theverge.com/2021/8/4/22609150/sony-playstation-...
This means the PS5 is subsidised, whereas Valve hardware does not tend to be. They have confirmed that internally all divisions must be roughly profitable/break-even.
I don't know how much money they make from each unit but major profit is not the goal here. They want to sell more games to more casual people who don't even own a PC anymore.
> Is this the Valve console? > > We think of Steam Machine as an extension of PC gaming, not as a console. > > The traditional console model is to sell hardware at a loss and make up the revenue with subscription services or by selling games that are locked-in to the hardware. We think this can make sense for a single business in the short term but that open ecosystems are better for customers over the long term. PC gaming's history proves this: The openness of the PC gaming space has enabled it to be the primary driver of hardware and software innovation for decades. > > The strength of PC gaming is the ability to play the games you want on the hardware you want. Steam Machine is a solution to these problems (and we think it's a great one), but it's not the only solution, and we don't want it to be.
Also on a 2025 launch, but that 2023 mid-level hardware feels already pretty weak in 2026, especially for a console you're supposed to run 6-7 years into the future. Sure, it's as powerful as a base PS5 but that console is already 6 years old by now. So the valve box is a pain to justify jumping in unless you're a big valve fan and don't want to DIY a PC.
That wouldve put the steam machine somewhere around the $800 mark for the base edition, which would’ve been so, so much sweeter of a value proposition.
If you don't, then yes, as a PC enthusiast I'm sad as well. But like, it's a little bit ironic to be complaining about RAM prices if you've got 5 sub-agents hacking away.
If the price is expected to fall over time, then the negotiated price is below market at the beginning and above market at the end. From the suppliers view, they take a loss in the early years that they recover later.
Apple probably pays a premium to shift this risk to the supplier. Besides that they don't take a loss just because prices tend to fall. They only lose if market prices fall more steeply than expected.
Pre-iPhone and during the mechanical-disk iPod era, they were a very small and vulnerable entity.
Valve doesn't need this to do well to survive. And you don't need a steam machine (or any >$1000 machine) to play PC games. Just wait it out or buy used hardware. Hell, even an rog ally x plays just about anything (and also supports steamOS), and you can still get that at reasonable prices.
That's why I'd love an interview with Steam's legal head. Sounds like they'd have some wild stories to share.
I'm pretty sure the price increase is exclusively caused by LLMs.
I won’t buy it
But wow what a nice communication
That’s gonna look great on post mortem report
