With Valve’s official reveal of the Steam Machine’s price having raised a few eyebrows, and the company talking about why it couldn’t subsidize the cost, industry insiders and leakers KeplerL2 and Moore’s Law is Dead believe that the company might be taking a bigger profit margin on the device’s sales than it has admitted. In a social media post, KeplerL2 noted that, with the current price of hardware, either Valve’s profit margin on the Steam Machine is “fat”, or it is getting taken advantage of by hardware suppliers.
“Either Valve has a fat profit margin on the Steam Machine, or they’re getting absolutely rinsed by their suppliers,” they wrote. For his part, Moore’s Law is Dead believes that Valve has intentionally set the pricing to give it a larger profit margin. In a video, he discussed how potential PC gamers could simply build their own gaming PCs for similar prices that could outperform the Steam Machine. The YouTuber also said that the Steam Machine is simply “not even a good PC.”
“It’s not just that it’s expensive; it’s not just that the price is not what we wanted. This thing is horribly weak. It is not problem-free. And therefore, it is not ‘just a console for your Steam games.’ It is a PC that you cannot upgrade, and it’s priced like Apple built it,” he said.
“Gabe [Newell] didn’t price this thing above a thousand dollars because ‘he had to’ due to RAM prices that are out there. It’s way higher than just blaming that. He priced it this way to make sure that he could afford that $70 million mansion in Florida he bought.”
The Steam Machine is priced at $1,049 for the 512 GB version, and the price doesn’t include a Steam Controller. At the highest end, a 2 TB Steam Machine is priced at $1,349, with the price going up to $1,428 if you want to also get your hands on the new Steam Controller with it. To pre-order one, a reservation queue has been opened up, with potential buyers getting notified that they can get one completely at random. Buyers that sign up for pre-orders after June 25th won’t be part of the random pool, and will simply be added to the end of the queue.
The company said in statement that it couldn’t subsidize hardware costs for the Steam Machine due to the openness of PC as a platform, which meant that potential buyers could end up never spending a single dime on Steam games. While it could have subsidized it by making it a closed system, Valve simply isn’t interested in doing so.
“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.”