Valve has admitted that part of the reason behind the high price of the Steam Machine relative to its specifications is that it had very little bargaining power against memory manufacturers. Talking to Gamer’s Nexus, Engineer Pierre-Loup Griffais revealed that these memory companies would simply give Valve a price with no real option to negotiate.
“Look, there’s no contract; there’s nothing,” he said. “Like, those guys… they give us a price every month, or something, and they say, ‘You can buy that many, and it’s yes or no.’ And if we say no, then they never talk to us again.”
This shouldn’t really come as much of a surprise to anyone paying attention to the current state of computer hardware. Companies like Crucial, for instance, have outright stopped manufacturing consumer RAM, opting to instead sell to other businesses that want to use the hardware to build up new AI data centers. Similarly, other memory companies like Samsung and SK Hynix have seen most of their stocks being bought up by AI giants like Nvidia, OpenAI, Anthropic, and Google.
Interestingly, hardware industry insider KeplerL2 had said on social media earlier this week that “Either Valve has a fat profit margin on the Steam Machine, or they’re getting absolutely rinsed by their suppliers.” Another leaker, Moore’s Law is Dead, believes that the former might be the case, noting that PC gamers should simply opt for making their own systems for the same price. This way, they get PCs that can outperform the Steam Machine.
The Steam Machine is priced at $1,049 for its lowest-end model, which comes with 512 GB of storage and lacks a bundled Steam Controller. The most expensive version costs $1,349 for just the Steam Machine with 2 TB of storage, and $1,428 if you also want a Steam Controller included.
Griffais had previously spoken about why Valve couldn’t simply subsidize the Steam Machine’s price. It largely came down to the fact that the system is a general-purpose PC that runs on Linux. This means that there’s no real guarantee that a buyer would then make up for the losses Valve sees with each unit sold if it were to be subsidized through game purchases on Steam. While the company could have opted to make it a closed system like a console, Griffais noted that this ran counter to Valve’s values.
“The openness of the PC ecosystem in particular has enabled it to be the primary driver of hardware and software innovation, because anyone with an idea for a way to do something better was able to take a shot at it. When companies sell their hardware under cost for competitive advantage, or buy exclusive content for it, they’re doing that to build a more closed system, one where you don’t get to choose what software you want to use.”
“We don’t want that for PC hardware, and we don’t think you should want it either. You shouldn’t feel like you have to buy Valve hardware; you should be able to view it as just one option alongside all the devices for playing games, and select the one that makes sense for you. This means you get to decide which device fits your personal tradeoffs around things like price, performance, form factor, peripheral support, and everything else you care about. That’s the strength of the open PC platform, and subsidizing hardware runs counter to it.”