Can everyone please stop claiming and speculating that Valve's new hardware will be loss leaders? If you watch LTT and Gamers Nexus's first videos on the announcement, they actually spoke with Valve's engineers. And the Valve representatives already said that the new hardware WILL NOT BE LOSS LEADERS.

There isn't even evidence that the Steam Deck was a loss leader. All GabeN said was that the lowest cost launch model was priced "painfully", which doesn't necessarily mean it was sold at a loss, it could easily have been sold at a very tight margin.

And no, low margins does not meet the definition of a loss leader. A loss leader is a product sold below cost, in that every unit sold actually costs the seller money.

I get the desire to speculate on new hardware. It's fun and it helps pass the time until we hear more info from Valve. But there's limits to what is reasonable. Valve has already stated that the new hardware won't be loss leaders, so hoping and/or claiming they are isn't reasonable.

Sorry for the rant, but all of the comments that seem to have only skimmed headlines are quickly getting to me

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[–] 191 points 10 months ago (15 children)

We could, you know, just wait and see.

*ducks*

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    [–] 73 points 10 months ago (33 children)

    It can't be a loss leader.

    The steam machine is, hardware-wise, just a regular Mini-PC. Valve even lets you put whatever OS you want on there. So if this was a loss leader, that would mean that non-gamers and even small businesses would buy these, would install Windows on them and use them as office PCs, with Steam probably not even installed on the PC.

    With the Steam Deck, the form factor made it impractical or at least really weird to use them as office PCs. The steam machine doesn't have that issue.

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    [–] 58 points 10 months ago (22 children)

    Since they've said it's basically an entry level gaming PC that will cost more than a console, I think the >700, <$1000 speculation is most likely.

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  • [–] 35 points 10 months ago (15 children)

    that will cost more than a console

    Is that part of the quote? Because I just saw "priced like an entry level PC, not like a console", which was more ambiguous than saying "priced like a console". One man's entry level PC is $300, and another's is $1000. I have a mini PC with the power of a PS4 Pro, which I'd easily consider entry level, and it cost me $530 about a year and a half ago.

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  • [–] 31 points 10 months ago (10 children)

    It's possible I'm just interpreting the quote wrong. I figured they were making the distinction between "console" and "entry level PC" as a way to say "The price isn't set yet, but don't expect this to be $400-500"

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  • [–] 14 points 10 months ago (9 children)

    Yeah, leaving it ambiguous like this leads to wild speculation, and I think you misquoted that with your own assumptions. You might be right, but Digital Foundry seems to think $400-$500 is possible. Given the cost of my own mini PC, which is older and requires higher margins than Valve can get away with, I would even believe $400-$500. But we just don't know. Everyone's best guess for the price of this thing has a low floor and a high ceiling, which will make this all really funny once we know the actual price.

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  • [–] 8 points 10 months ago (4 children)

    Personally I don't think I would say that most people would consider a $1,000 PC to be entry level. To me entry level means something that a kid could save up their pocket money for in a reasonable amount of time maybe with a paper route to supplement. I'd say entry level ends at about $700 just to throw a number out there. For $1,000 you could get a PS5 and a PSVR2

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    [–] 54 points 10 months ago (8 children)

    Console manufacturers sell at a loss because they need to sell the console first before they can sell anything else. They can expect to make that money back on software the user could not have bought without the console.

    Valve doesn't need people to buy Steam Machines to get them to start using Steam. In fact, I suspect most units sold will be to users who are already invested in the ecosystem. Selling at a loss would just be a straight loss to them.

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  • [–] 9 points 10 months ago (2 children)

    Console manufacturers haven't sold at a loss in a long time.

    I agree, it won't be huge gains directly for them, but even moving people off of Windows benefits them by removing control a competitor (Microsoft) has. I somewhat agree that it won't be sold at (much of) a loss, but maybe at cost. I'm sure they expect manufacturing prices to go down over time, and engineering was a one-time investment, so sold just below cost doesn't seem unreasonable to me at launch, which then becomes at cost or above in the future.

    This all depends on if their goals for it are short-term or long. Historically, they seem to target long-term. That's why I think it'll be as low as they can make it, which they also said they're doing by only having 8GB VRAM as cost savings. They want to drop the price as low as they can to compete. They won't compete at $1k. I doubt they'd compete at $600-700. I suspect they're targeting $400-500, which seems like a reasonable cost for the hardware too.

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    [–] 40 points 10 months ago (4 children)

    They can't sell them at a loss without a locked-down ecosystem. Sony learned that the hard way with the OtherOS support for the PS3 that lead to a ton of them being purchased to build cheap supercomputer ls and never spending a dime on games or software to cover the loss.

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    [–] 29 points 10 months ago* (last edited 10 months ago) (3 children)

    I’m aware of Valve being very generous with warranty/replacements of controller hardware for the Index. Even years after the warranty is up. But I think this is because of the major durability issues and known defects that the Index Controllers have.

    In any case, Valve seemingly has lost money on a certain percentage of Valve Index kits/controller hardware. Based on how many people I know, including myself, who have gotten replacement hardware from Valve. Sometimes many times for recurring issues.

    But I’m not aware of Valve doing the same for the Deck.

    Edit: and you can tell they focused really hard on making the new controllers more durable:

    • No charging port to melt
    • durable sticks that won’t start drifting
    • No special finish on the controller that can be worn/scratched away
    • No internal battery to go bad
    • seemingly far fewer delicate parts

    Funny point on the melting charging port. 2 years or so after the Index came out, SteamVR started warning using with a status dialog that told users to stop charging their controllers while they use them. They never accounted for long play sessions and people who would want to charge while playing.

    USB-C has durability issues when used like that.

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  • [–] 19 points 10 months ago (40 children)

    Cost aside. If they don't price it competitively between the Xbox and the PS5, the Steam Machine will be DOA.

    The Deck is a perfect example of what they should try to replicate. If they don't do that, it will flop.

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  • [–] 17 points 10 months ago (36 children)

    It's a small computer, it isnt going after the Xbox or PS5 customers. It's going for the people who want a computer in their living room.

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  • [–] 17 points 10 months ago (34 children)

    This comment is so silly and yet I keep seeing it everywhere. What do you think the Xbox and Playstations are? What is it that xbox and playstation customers are looking for that this small computer isn’t?

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  • [–] 12 points 10 months ago

    I'm not sure cost can be set aside from a price discussion when they've explicitly stated it won't be a Costco rotisserie chicken.

    With the number of consoles sold this generation, I'm not sure where the limit is for what people will spend to play the games they want. With console pricing has trailing budget gaming PC's, I could see a number of people getting a Steam Machine in lieu of the next Playstation or Xbox.

    What would be interesting to see in the future is the split between units sold to lifelong console players making a change, and pre existing Steam users with stuffed libraries buying one for the couch. If the latter make up the majority of sales, but they priced it like a chicken, that'll be a problem pretty quick.

    Hopefully it shakes out well and indie game developers reap some well deserved rewards.

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    [–] 16 points 10 months ago (7 children)

    To be a loss leader doesn't the need to lead to something?

    The only way it could make sense that they're selling these at a loss would be - oh yeah. They're coming straight for Nintendo / Sony / Microsoft now, huh?

    The day I see a steam console in wal mart is a day I will be very happy.

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    [–] 12 points 10 months ago

    To be fair, I don't watch either of those youtubers. So I had no knowledge of this.

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  • [–] 8 points 10 months ago (1 child)

    Steam's business model does prevent it from pricing its consoles like Sony, Xbox, Nintendo, etc. since they need the console itself to be profitable, not just a means of bringing in games sales.

    It's plausible that they're taking into account an uptick in overall game sales from this console - at least for me, I've been purchasing new games mostly off of steam rather than playstation/nintendo ever since I got a steamdeck - but you're right that they aren't going to sell at a loss.

    Regardless of the price (and whether or not I even buy one), I think it's healthy to have another "big" player in the console market.

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    [–] 8 points 10 months ago (10 children)

    I‘m always amazed at the amount of people believing the Steam Machine will be sold for the same or less than the most expensive version of the Steam Deck while being six times as powerful.

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  • [–] 25 points 10 months ago* (1 child)

    Just playing devil's advocate here. I don't necessarily disagree with you, but there are some interesting factors at play.

    1. The Steam Machine won't need a screen or battery, two of the most expensive components on the Deck. So that can go into better CPU/GPU/RAM instead.
    2. Valve proved they can make a successful physical hardware product with the deck. That gives them a lot of negotiating power with AMD to get the best deal they can.
    3. Unlike with the Deck, they're releasing three new gadgets in almost all major countries simultaneously. That means they may have already started manufacturing months ago, and are benefiting from economy of scale at an entirely new level.
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  • [–] 19 points 10 months ago*

    Steam Machine is also bigger. Small costs money if you want powerfull.

    Also, it's newer hardware.

    I think it will be priced at least a 100€ above the Deck, but I would also be willing to pay that for a console/living room computer.

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  • [–] 14 points 10 months ago (4 children)

    I’m fully expecting an 800+ USD price tag. And I’ve made my peace with that.

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