If you ask random gamers what price they think Valve will charge for its newly announced Steam Machine hardware, you’ll get a wide range of guesses. But if you asked the same question to analysts who track the games industry for a living… well, you’d actually get the same wide range of (somewhat better-informed) estimates.
On top of those estimates are analysts like F-Square’s Michael Futter, who expects a starting price of $799 to $899 for the entry-level 512GB Steam Machine and a hefty $1,000 to $1,100 for the 2TB version. With internal specifications that Footer says will “rival the PS5 and perhaps even eclipse the performance of the PS5 Pro,” we can expect a “hefty price tag” from Valve’s new console-like endeavor. At the same time, since Valve “is positioning it as a dedicated, powerful gaming PC… I suspect the price will be lower than a similarly capable traditional desktop,” Futter said.
DFC Intelligence analyst David Cole similarly expects Steam Machine pricing to start at “about $800” and go up to “about $1,000” for the 2TB model. Cole said he expected Valve to demand “very low margins” or even break-even pricing on the hardware, which he said would likely result in pricing “below gaming PCs but slightly above high-end consoles.”
A defeated leader?
On the other end of the spectrum, Joost Van Drunen, founder of SuperData Research and author of the SuperGhost newsletter, predicted that the entry-level Steam Machine could come in at $549, rising to $749 for the 2TB version (plus an additional $50 for bundles including the Steam Controller).
For Van Drunen, Valve’s unique status as a private company with a loyal fan base means it can “price its hardware to hit its own strategic sweet spot rather than reflect the competition.” And in this case, he said, it might mean taking a “slight” loss on hardware as a way to get more gamers invested in SteamOS.
Getting people to buy more games on SteamOS could be far more valuable to Valve than any Steam Machine hardware profits.
Credit: Valve
Getting people to buy more games on SteamOS could be far more valuable to Valve than any Steam Machine hardware profits.
Credit: Valve
“Like Sony and Microsoft, the real money isn’t in the box, it’s in the ecosystem you enter after you buy,” Van Drunen said. “The question for me isn’t whether Valve can eat the margins. The question is whether they want the SteamOS footprint to grow fast enough to justify it. … Strategically, it’s about expanding the platform, not about squeezing the hardware.”