• The 3 Established Consoles vs. Steam Box: How Could Valve Win Next Gen?

                Before we even get started, it must be acknowledged that Valve's recently announced console/PC hybrid's specifications are a mystery. We are not going to go into spec comparisons or any of that. Rather, we will take a look at some of the known hurdles that Valve and the other console manufacturers are going to have to jump this coming generation, and the potential outcomes.


                Will Valve have enough Steam to compete with the big 3?

                We'll start with Nintendo, as they are the first of the four to enter into the next generation of console gaming. The Wii U is out, and is already off to a good start. Nintendo again is relying on having a unique capability for their console, rather than raw hardware power, to keep them afloat. This worked for the Wii when all of the doubters were saying it would fail. So much, that the Wii has sold tens of millions more units than it's competitors. All while using hardware that in some ways was weaker than the Xbox, a previous generation console.

                Now they are trying the same tactic once again by releasing a console that has a unique input device, but has hardware specs that in some ways do not exceed the previous generation's consoles. This, once again, has brought a good deal of criticism from the doubters. However, this time, that criticism may not prove to be off the mark. Why is that? PS3 and Xbox 360 already have their own equivalent of the screen-controller. One may argue that the fact that neither is included with the system gives Wii U the edge, which is true, but that neglects the fact that PS3 and 360 are not Wii U's competitors. Valve, Sony and Microsoft all have new consoles on the way, and if Wii U's controller gives it any hint of success, you can bet that those new consoles will have it as well.


                Call of Duty: Black Ops 2 PS3/Wii U Comparison (PS3 on left). Credit: Lens of Truth

                Then we have Sony. Known for always releasing the most cutting edge technology, always being the most powerful console on the market at launch. This really hurt them with the PS3. They released such an expensive system that they couldn't afford to build it and we couldn't afford to buy it. The end result, billions lost. Pretty much erasing all of the profit gained from the previous generations of being number one in the console market. As such, Sony is in nowhere near the same position when it comes to building a system that is hands down more powerful than anything Microsoft or Valve has put together. This generation, Sony's executives/shareholders are likely going to be concerned with profit, not power. They will not tolerate these divisions bleeding any more red ink. The strong Japanese Yen is another factor that hurts both Sony and Nintendo, increasing their export costs.

                While it is no doubt that the next Sony console will be powerful, they simply do not have the money to be burning through like they did when PS3 launched, and are not keen on repeating those mistakes made with PS3. We will likely end up seeing more of a focus on other features that make the next PlayStation unique, rather than just raw CPU and GPU power. With PSN still lacking behind Xbox Live! in many features, they also have a lot to do when it comes to structuring their online system. With Steam, a very well respected PC online service, now entering the ring, Sony's competition just got a lot tougher. Steam will give a seamless integration with the PC community, much like we saw with Steam on PS3's version of Portal 2... but for all games. Microsoft also has a massive advantage over Sony in this area, with their ability to integrate their next Xbox in seamlessly with Windows. If we have both the next Xbox and the Steam Box offering that kind of PC cross compatibility, Sony and Nintendo may be left out in the cold when it comes to online gaming.


                Sony boss Kaz Hirai posing with the PlayStation 3

                That brings us to Microsoft. In addition to the criticisms from their core base that they are investing too much effort into casual gaming with Kinect, they have the most to lose out of all 3 with Steam Box coming into the picture. Steam is a direct competitor to Xbox Live!, which they give away free rather than the $59.99 per year Xbox Live! users have to pay for the same thing. Not only that, but as Player Essence points out, Microsoft's dependency on third parties will severely hurt it when trying to compete with Valve's console. Valve already has a good relationship with most of those third party companies. While Microsoft may be willing to buy exclusive map packs for the next Call of Duty game, they're still going to be hard pressed to convince a core gamer to pay extra to even play those online maps. In the end, Microsoft may be forced into making Live! free because of this, which is the beauty of competition. We win.

                Microsoft, despite having as much money as they do, are also is in a tough financial spot with Xbox. after losing billions on the RROD disaster and losing $3.931 billion on the original Xbox, the entirety of the Xbox program (or the divisions that have housed it) currently has a negative balance of $4.926 billion lost. Microsoft's shareholders are also likely going to want to see a move towards profit rather than power. This helps level the playing field a good bit for Valve when it comes to what kind of specs the Steam Box will need to compete.


                Cute, cuddly, casual fun with Xbox Kinect.

                Valve is a threat to Nintendo's sales pretty much just by being in the race at all. Wii U doesn't have much to compete with this generation other than Nintendo's beloved first party games. Valve is a threat to Sony because it may end up launching a similarly powerful system that has online features Sony cannot touch, such as crossplay with PC on all Steam games. It poses a significant threat to Microsoft as well, by giving away what they have been charging for with both Xbox and Xbox 360, and also removing Microsoft's advantage of being the only console manufacturer with the ability to easily integrate it's online service with the PC world. It lacks Sony and Nintendo's untouchable first party capabilities, or Microsoft's multi-billion dollar advertising/exclusivity budgets they are willing to throw at their consoles. However, even though it's specs are still a mystery, the concept alone has enough potential to turn Valve's new console into a major player this next generation.

                Valve also has one other advantage with the Steam Box. PC games like those on Steam are designed to be scalable. This means that Valve can release as many iterations of Steambox as it wants without confusing the consumer, they all will be compatible with the same software within a certain time period. The software can just be configured to run at different settings. This also solves any issues with backwards compatibility, unlike the other systems who operate in a much more closed environment, and who's architecture changes from one generation to the next make backwards compatibility difficult if not impossible.


                Rumored photo of the Steam Box. Photo credit: Kotaku

                Do you think Valve has what it takes to be console king? Let us know by leaving a comment below!
                Comments 6 Comments
                1. OmniStalgic's Avatar
                  OmniStalgic -
                  Nah..screw more consoles...

                  I will support it if the OS is Linux based though...
                1. curryking1's Avatar
                  curryking1 -
                  I don't want more consoles. I think more consoles could lead to an industry crash to be honest. The revenue made by Ninty, MS, and Sony seems to be healthy for the console market. The handheld market is awash with tablets, and Vita and 3DS are doing fine.

                  If we split the pie to more places at one on the console end, that could really fragment the whole console business and send it to the stone age... I don't want that to happen.

                  PC gaming seems like it will be immune to all of this. Their revenue is ridiculously high overall and since there is more or less platform agnostic attitude going on it's OK that many people are eating from the same pie.

                  Free to play on PC is getting huger than anything though. World of Tanks reports over 617,000 simultaneous players. Dota 2 is upwards of 130,000 simultaneous players. PC is absolutely fine on every end. I just don't want Steambox to cannibalize console sales.
                1. frosty's Avatar
                  frosty -
                  Thing is, if steambox does start chewing away at console sales, the other 3 will be forced to compete or die out. Better exclusive games and more of them, better exclusive devices, they will be forced to stand apart from the rest. Xbox live will be forced to be free. Sony will be forced to make PSN more fully featured. These are all good things. Like you mention, both the PC and handheld market are flooded with competition, yet they both do fine due to the aspects of both sony and nintendo's devices that make them stand out from the rest.

                  The PC cross compatibility thing i see becoming a nice perk the xbox and steam box will enjoy that the other 2 cannot easily achieve. That is one feature that may tip the scales next gen, as games on those systems will enjoy a much larger online community. Xbox will not be able to keep up if it wants to charge for that, though.

                  The backwards compatibility thing is something steam box will have exclusively, since PC games can scale easily to different architectures, steam box has it made. they can release as many of them as they like, or even license it out and let other companies make their own versions, and all of them will be able to play the same games, each at their own settings tailored to the hardware inside. it's a double edged sword though, as in the end the closed platforms will be able to produce more bang for the buck than the more open steam box platform will. games for it (assuming they go the multi SKU route) will need to be made to run on multiple systems of differing configuration.

                  And yes, Omni, it does run linux.
                1. Segitz's Avatar
                  Segitz -
                  I say it's a great start. It really depends on how Valve will handle it, though. There's just enough possibility for any party involved to fuck up.
                1. masteratt's Avatar
                  masteratt -
                  Great write up, frosty. Covered every major point I could think of and did it well.

                  To add to the discussion, I really don't think MS is ever going to be making LIVE free. 1) It will cause an uproar of "why were we paying for it if it could be free?..." and (2) Their image of a "premium service" will get damaged.
                  Average Joe isn't going to care (or maybe even, know) it's cheaper to play CoD on SteamBox when all his buddies are on 360. You hear over and over again "I am getting it on 360 because all my buddies are on Live". SteamBox won't change that unless it does something to really capture people's imagination.

                  For me one big uprising is streaming. Twitch.tv got huge over the years. Drawing in 100,000+ for streaming events and many people make living off of it now, so it is reaching YouTube status.

                  So what I think can set anyone apart here is sparing some CPU power (I know it will be a hefty lot, so maybe not on all games) for 'instant streaming'.
                  Synch your Twitch account, open the game, click stream and you are live. Have a Twitch app on the system, allow people to interact with other streamers.

                  This way gaming becomes alive, living, constant, the community is never stale and you create a whole new community of followers and also drawing in the already huge Twitch community.
                  Especially the partnered Twitch users will get everything on your console for the ease of streaming and many in the hopes of making a living off of streaming will flood the network.

                  If I was a boss at one of the 4 manufacturers, I would put most of my eggs in that basket to try and stand out and hopefully break XBL's hold on the networking side of things.
                1. OmniStalgic's Avatar
                  OmniStalgic -
                  Perhaps Gaikai has similar concepts??