Microsoft warns Valve about the challenges of releasing a first home console.
Valve recently announced that it will be entering the console market with its very own Steam and Linux powered system that we’re all calling- for now- Steam Box.
However, Microsoft Studios boss Phil Harrison has issued a warning to Valve, saying that the first step into the console market can be challenging, and that Valve should expect success “at small scale.”
“Entering the hardware business is a really tough business,” said Harrison. “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.
“They can be successful at small scale. But it’s very rare for a new hardware entrant to get to scale, and I mean tens or hundreds of millions of units. There are a very small number of companies that can make that happen.
“And it’s not just having a great brand or a great software experience. It’s about having a supply chain and a distribution model and a manufacturing capacity and all the things that go with it. It’s a non-trivial problem to solve and it takes thousands of people to make reality.”
“I admire Valve as a company and what they’ve achieved with Steam,” he went on. “So I wouldn’t in any way criticise what they’ve achieved and the role they’ve played in the industry. But 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.”
Harrison also seemed undeterred by the reveal of two new rivals, in the form of the Steam Box, of course, and the upcoming Ouya. “Any new entrant, without being specific to any company or brand or product, to the games industry is ultimately a good thing, because it helps validate, grow and enhance consumer excitement and consumer interest in our category,” he said. “So, ultimately, it’s a win for everybody.”
It is true that Valve will need to have proper distributing and marketing facilities in place, especially if it is big brand names such as Xbox, PlayStation and Wii they’re going up against.
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