Valve has created a PC-based game console that lives under your TV. The Steam Machine takes everything that’s great about the Steam Deck and adds raw power to compete with the latest PlayStation and Xbox consoles. This puts a huge amount of pressure on Microsoft to get its Windows and Xbox combination right, as the Steam Machine brings Windows games into the living room in a way that Microsoft has been dreaming of for its next-generation devices.
The Steam Machine looks like an Xbox Series The 6-inch Cube runs Windows PC games via Valve’s Linux-based SteamOS, and it should have enough power through its two AMD chips to deliver performance close to the Xbox Series Inside, all of the Steam Machine’s components are compact in a similar manner to the Xbox Series
Beyond the hardware, it’s really SteamOS that makes the Steam Machine a viable Xbox and PS5 competitor. Valve failed to make Steam Machines a reality a decade ago, largely because developers had to port their games to Linux to run. Valve’s new Steam Machine utilizes its excellent Proton compatibility layer, which allows most Windows PC games to run seamlessly on the Steam deck and is often better than the equivalent Windows handheld.
While the Steam Machine is a standalone device and Valve hasn’t announced OEM plans just yet, I still think it’s a big threat to Microsoft’s next-generation Xbox plans – and even potentially to Windows PC gaming.
It’s no secret that Microsoft is working to combine the best bits of Xbox and Windows for its next-generation console, and that means more PC-like hardware and software, like the Steam Machine. Asus’s Xbox Ally handheld offers an early look at the direction Microsoft is going for the Xbox console, with Windows at the center and an Xbox UI on top.
However, Microsoft’s combination of Windows and Xbox feels like a beta right now, and it’s shipping on a $1,000 device. Microsoft has effectively made the Xbox PC app into Steam’s Big Picture mode and suppressed some annoying parts of Windows so that they become hidden. It’s still very early days for Microsoft’s approach here, and I personally think it’s shipped too early. The Windows and Xbox teams have a lot of work ahead to improve the Xbox full screen experience and remove the complexity of Windows. Valve’s Steam Machine is now increasing the pressure on Microsoft to fully implement its vision.
This pressure will only increase if Valve can convince other PC OEMs to create Steam Machines in the future, just as it expanded SteamOS to Windows handhelds. While Microsoft is working on its own next-generation Xbox hardware, sources tell me it also wants OEMs to build future Xbox-branded hardware like Asus has done with the Xbox Ally. This puts Microsoft and Valve on an even bigger collision course.
Both Microsoft and Valve are trying to attract the same audience, gamers who are interested in PC gaming but want a simpler console-like experience, or who are already PC gamers and want a reliable living room option that can play all the games they’ve already purchased.
The challenge for Microsoft is that Valve has already turned SteamOS into a controller-friendly operating system, with a storefront dominated by PC gaming. All the pieces are ready to go for the Steam console, while Microsoft is building its next-generation Xbox with a combination of Windows and Xbox and without being locked to a single store. The next Xbox is now ready to embrace rival stores like Steam to lure people in, but Microsoft still faces a major hurdle in convincing people to actually buy games in its PC store instead of buying them on Steam.
Microsoft will undoubtedly rely on its impressive Xbox cloud saves and Xbox Play Anywhere support as part of its strength to fight Valve’s Steam Machine, but with SteamOS now available across consoles and handhelds, it undercuts Microsoft’s cross-device effort. However, PC Game Pass is still exclusive to Windows, so Microsoft’s subscription service will play a big role in helping its next-generation hardware stand out. Microsoft also has a big advantage in games like Fortnite, valiant, battlefield 6And while other multiplayer titles work seamlessly on Xbox, they don’t run on SteamOS due to its complex anti-cheat system.
Price will also be a big factor in Xbox+Windows vs Steam Machine. Valve has not yet finalized pricing, but it says that “the Steam Machine is priced on par with a PC with similar specifications.” This seems more expensive than a subsidized console, at a time when both Microsoft and Sony are raising console prices higher than standard. Microsoft is also hinting that its next-generation Xbox will be “a very premium, very high-end curated experience,” so expect more PC-like pricing for those consoles as well.
As the Steam Machine brings a simplified form of PC gaming into the living room, it also threatens to shine a bigger spotlight on Windows’ performance issues and the direction Microsoft is taking with its operating system. SteamOS is already outperforming Windows in a variety of titles, causing some PC gamers to take a closer look at Linux for the first time. With the growing dislike towards the direction Microsoft is taking with Windows in the PC gaming community, the Steam Machine should be a warning to Microsoft to focus on performance and gaming instead of pushing Copilot buttons everywhere.
The Steam Machine now looks like a timely response to Microsoft’s Windows gaming struggles for years, and an effort that has been in the works for a long time. Valve originally tried to put a box in everyone’s living room with their “Steam Box” effort more than a decade ago. I still remember encouraging my colleague TC Sotek to pursue gabe newell At CES in 2013. The Valve CEO sat down with us for a rare and wide-ranging interview about Steam and the future of Steam Machines. What Valve was trying to do with the original Steam Box felt like a response to Windows 8, and Newell even described the decision to launch Valve games on Linux as a “hedging strategy” against Microsoft. He also described Windows 8 as a “huge misery” at the time, indicating that Valve was frustrated at Microsoft’s direction with Windows more than a decade earlier.
Valve’s hedging strategy now looks like it could fulfill the dream of a PC in the living room that Microsoft has been chasing for decades — from Windows Media Center to the Xbox One’s big push with Windows. Except it’s not Windows in the living room, it’s Linux.
You would think this would raise alarm bells for Microsoft. Instead, Microsoft Gaming CEO phil spencer Valve was positive about the announcement during a conversation with Xbox employees yesterday. He also posted on X to congratulate Valve.
“Expanding choice across PC, consoles and handheld devices reflects a future based on the core values that have guided Xbox’s vision from the beginning,” Spencer said. “As one of the largest publishers on Steam, we welcome new options for players everywhere to access games.”
Microsoft is confident its path is right for the next Xbox devices, but now it has to compete with Steam on its living room home turf to make a PC-like game console a reality. Game on.
What’s up with the Windows Insider Program?
In recent weeks all the faces behind Microsoft’s Windows Insider program have announced they are moving on. brandon leblanc, Amanda LangowskiAnd jason howard All have moved on to different roles inside Microsoft, and it is not yet clear who will replace them.
Microsoft assured me that “there have been no changes to the Windows Insider Program,” despite the three suddenly changing roles at the same time. “While we continue to hire to fill these roles, the Insider program will be led by Alec Ott, Principal Group, Product Manager, Windows Servicing and Delivery,” says Chris Morrissey, senior director of communications for Windows Servicing and Delivery. “We are committed to listening to and learning from our Insiders, as well as developing new experiences every week while continuing our rhythm of blog posts.”
The current Windows Preview Build blog posts are anonymous, and I wonder if they will all be written only by AI agents in the future. Blog posts for new Windows features internally seem like an easy target for Microsoft’s AI push. Either way, I hope Microsoft continues to listen to Windows feedback through its Insider program, especially since it was introduced at the same time as Windows 10 fixing Windows 8’s mistakes.
I’m always eager to hear from readers, so please leave a comment here, or you can contact me at Notepad@theverge.com if you’d like to discuss anything else. If you’ve heard about a secret Microsoft project, you can contact me via email at notepad@theverge.com or talk to me confidentially on the Signal messaging app, where I’m tomwarren.01. I’m also tomwarren on Telegram if you’d prefer to chat there.
Thank you for subscribing notepad,