Valve enters the console wars

On the 15th floor of an upscale office building in Bellevue, Washington, security guards line the halls. They’re here to make sure we don’t stray — because I’m visiting Valve’s headquarters, a place few journalists ever get to go. The guards help escort me to a tiny demo room, where a pair of Valve engineers show me their pride and joy: a glowing 6-inch cube, barely bigger than a box of Kleenex, that they hope might be the future of video game consoles.

For a moment, I feel like I’m watching history repeat itself. Twelve years ago, in a different Valve office half a mile away, the maker of Half-Life and Portal showed me what ultimately became one of the biggest technology flops of the decade, a new gaming system called the Steam Machine. Back then, it also looked like Valve was building the video game console of the future. The company had combined its vibrant Steam storefront with the flexibility of PC hardware — a formula that appeared poised to wrest the living room away from Xbox and PlayStation dominance.

But the Steam Machines of that era suffered from being built on Linux, an operating system with a limited user base and an even more limited library of games. When the hardware finally launched in 2015, after two years of anticipation, the Steam Machines were dead on arrival.

Now, Valve is once again announcing an alternative to PlayStation and Xbox. It’s once again calling it the Steam Machine. And the pitch, once again, is an open-source Linux PC for your living room instead of a proprietary box that only plays a specific library of games.

But the new Steam Machine is different from the previous console attempt in one key way: Valve isn’t waiting around for developers to lend their support. The company has spent the past decade building the underpinnings of a system that ought to make an enormous library of PC games just work on day one.

Five miles away from Microsoft’s global headquarters, Valve is preparing to steal gamers away from Xbox and Windows with a head-smackingly simple strategy — just let people play games.

The Steam Machine is a game console. From the moment you press the button on its familiar yet powerful new wireless gamepad, it should act the way you expect. It should automatically turn on your TV with HDMI commands, which a Valve engineer tells me was painstakingly tested against a warehouse full of home entertainment gear. It should let you instantly resume the last game you were playing, exactly where you left off, or fluidly buy new ones in an easily accessible store.

You’ll never see a desktop or command line unless you hunt for them; everything is navigable with joystick flicks and gamepad buttons alone. This is what we already get from Nintendo, PlayStation, and Xbox, yet it’s what Windows PCs have not yet managed to achieve.

But the theory now is that the PC is increasingly becoming the best place to play games — not because of the hardware, but because of a program from Valve that gamers originally hated.

In 2004, you couldn’t play Half-Life 2, the highly anticipated sequel to one of the best PC games ever made, without installing Valve’s new distribution platform, Steam. Many saw it as an unnecessary form of DRM, punishing players for what future pirates might or might not do.

Yet Steam grew into the easiest and most dependable way to find, buy, organize, and play a game collection, turning Valve from merely an acclaimed game developer to the owner of an entire gaming ecosystem. Today, Steam boasts well over 100,000 titles from practically every publisher under the sun, an enormous library spanning AAA releases and niche indies, much of which you can acquire relatively cheaply because they’re almost always on sale.

With 30 million active players at any given moment, its gravitational pull is so strong even Microsoft and Sony can’t resist anymore — you can play Halo, God of War, Spider-Man, and many other former console exclusives on Steam, and therefore on a Steam Machine. A former Sony exec recently suggested bringing its games to Windows was “almost like printing money.”

But none of that success automatically lets you play PC games in your living room without wrangling with PC settings, PC annoyances, PC controls. Valve has achieved that by turning Steam into an entire operating system, one that fools Windows games into thinking they’re actually running on Windows, without many of Windows’ headaches. One that lets you just press the power button to pause your game and walk away.

We live in unprecedented times. A PS5 costs $100 more than it did five years ago; an Xbox Series X costs $150 more. Microsoft in particular, worried about sinking sales, is calling every piece of hardware on Earth an “Xbox” in a thus-far-failing attempt to reach more gamers.

But that’s precisely where Valve is miles ahead.

After the original Steam Machines failed, Valve never stopped plugging away at the idea. For over a decade, it quietly continued to work on its Linux-based SteamOS. The company stopped assuming it could convince developers to build games for Linux and began pursuing ways to play Windows games on Linux instead, long before it ever had a piece of hardware to sell. It invested heavily in a compatibility layer called Proton — standing on the shoulders of Wine — as well as ways to translate various Microsoft graphical APIs.

Then, in 2022, we saw the first fruits of those labors: the Steam Deck, the first handheld PC to make Windows games truly feel portable. It launched as a buggy, unreliable mess, but over weeks, months, and years, what started as a device for diehards has become surprisingly accessible, reliably launching and playing a gigantic library of Windows games.

“I feel like one of the unsung heroes is all the work the team has done on Proton,” Valve designer Lawrence Yang told me after the launch of the Steam Deck OLED.

It’s the closest PCs have ever come to a Nintendo Switch-like experience where you press a button to download, press a button to play, press the power button to sleep, and expect everything to just work when you press that power button to resume again. Overall, it’s vastly easier and less complicated than gaming on a Windows PC (even if some games still don’t run).

While the Steam Deck still isn’t a mass-market product — at just millions sold, it likely still lags behind Nintendo’s months-old Switch 2 — it has finally prompted sleeping giant Microsoft to respond with a new build of Windows modified for handhelds. But so far, that’s largely only proven how far ahead Steam truly is: Linux currently plays Windows games better than Windows in our side-by-side tests.

Consoles aren’t Valve’s only battleground, by the way. In addition to handhelds, the new Steam Frame headset might steal away Meta’s VR gamers too. It comes with wands that uniquely have every button you’ll find on a traditional gamepad, and its own copy of Steam, letting you play some Windows games natively on its Arm chip and others via a powerful new streaming solution.

But that’s primarily a device for existing PC gamers, not a potential new competitor for the most important screen in the house. At a time when Microsoft’s entire Xbox brand is floundering, and Sony’s flagship is a sky-high $750, Valve just might have an alternative gamers can rally behind.

So now, Valve is trying to repurpose all of that work for your TV.

Everyone knows the formula for a popular game console. It’s a box that makes games look noticeably better than the last box you bought. It’s a box most people can readily afford. It’s a box that plays games easily and plays them well.

Valve acknowledges the original Steam Machines fell short of that. “Those didn’t go too well,” admits Valve veteran software engineer Pierre-Loup Griffais.

But the company believed — and believes — it has an opportunity to leapfrog the home console with something that works better, something that’s the best of both the PC and console worlds. “We want this to be the easiest PC gaming experience we can give our customers,” Valve hardware engineer Yazan Aldehayyat tells me.

For example, the Steam Machine will automatically update itself in ways even today’s PlayStation and Nintendo consoles don’t reliably do. “The Steam Machine has the ability to keep all your software, your OS, your games, and your cloud saves updated in the background … so the games are always ready for you to play,” Aldehayyat says. The box comes with a scrolling RGB light bar that lets you check the progress of those updates even while your TV is off.

Valve also finally has a gamepad that feels great — it’s no longer the bulbous controller with only one joystick that Valve released a decade ago. The new Steam Controller also offers more customizability than anything else on the market, letting people aim as fast as they could with a mouse or play keyboard-centric PC titles with downloadable community controller profiles.

With a promised six times the performance of a Steam Deck, the new Steam Machine should meet the bar for those who don’t already have a PS5. I saw Cyberpunk 2077 running at settings that remind me of a PS5 Pro, or perhaps a little ways beyond, on a 4K TV.

The most important part of a game console is an affordable price, though, and Valve is signaling it may not win on that metric.

Historically, console makers like Microsoft and Sony have subsidized their hardware, selling it at a loss and making up the difference in game sales. Valve may have done something similar with the original Steam Deck, intentionally offering the handheld at a console-like starting price of $399, a decision Valve CEO Gabe Newell called “painful” but “critical” at the time. No handheld PC maker has matched it since.

When I ask Valve what the Steam Machine might cost, and whether it might be priced like a game console, the answer is: “Steam Machine’s pricing is comparable to a PC with similar specs.”

That’s not necessarily bad news, as Valve didn’t choose the latest and greatest parts for the Steam Machine; it’s largely AMD’s 2022 and 2023 technology with extra power and enhancements, and Valve isn’t using the latest USB or HDMI ports either. But it’s also quite possible that the Steam Machine will cost $1,000 or more, because that’s roughly how much PCs have cost when they’ve contained similar GPUs.

If Valve chooses to launch more than slightly north of Sony’s $750 PS5 Pro, it simply won’t put the same pressure on Sony and Microsoft. Like the Steam Deck, it might become a relatively niche alternative that takes years to work its way into the mainstream. Even as Sony raises its prices and Microsoft tests the waters for $1,000 consoles, it could put off people used to dropping $500 or less on the box beneath their TV.

In 2015, we warned our readers not to buy a Steam Machine. The writing was on the wall. But walking out of Valve’s headquarters, it was almost impossible for me to imagine history repeating itself. The software works this time.