Microsoft's Phil Harrison's Thoughts on Steam Box and Shield: Hardware is a Hard Business to Enter

When asked about Microsoft's venture into tablets with Windows 8, Valve head Gabe Newell had less then kind words.

The tech giant was a little more positive when speaking about Valve's and Nvidia's venture into gaming hardware with the Piston and Shield, which were both confirmed and unveiled at this year's CES.

"I think that any new entrant, without being specific to any company or brand or product, any new entrant into the games industry is ultimately a good a thing," said Microsoft vice president Phil Harrison.

However, Harrison also provided words of caution for the two companies. "Entering the hardware business is a really tough business, and you have to have great fortitude to be in the hardware business, and you have to have deep pockets and a very strong balance sheet. It's not possible for every new hardware entrant to get to scale.

"They can be successful at small scale. But it's very rare for a new hardware entrant to get to scale, and I mean tens, hundreds of millions of units. There are a very small number of companies that can make that happen.

"And it's not just having a great brand or a great software experience. It's about having a supply chain and a distribution model and a manufacturing capacity and all the things that go with it. It's a non-trivial problem to solve and it takes thousands of people to make reality."

Deep pockets and strong balance sheets? Check for both Valve and Nvidia, who really are both in prime position to have their gaming hardware take off. But will the Steam Box and Shield take off and ship the amount of units desired? That might be a little bit trickier to manage.

 

Contact Us for News Tips, Corrections and Feedback

Create a new thread in the US News comments forum about this subject
This thread is closed for comments
34 comments
    Your comment
  • kawininjazx
    I think a lot of people would buy the Steam Box, there is already a huge following for Valve. A lot of people want console hardware upgrades, but that messes up the consistency of the games, since they are specifically made to run off of a certain type of hardware (thus running better on lower end parts). I guess the Steam Box would just be an affordable mini gaming PC that runs a Steam OS or linux.

    A lot of people don't get into PC gaming because of the initial cost of $700-$1000 for a decent machine, but there are a ton of great deals on PC games that are a couple of years old. If you could get a capable PC for $399 from Valve that will play the newest game at a decent resolution, there could be a big boost for the PC industry, but it's going to be a gamble for sure.
    3
  • takme12
    For a measly $199, I can play the latest games at a decent resolution. It's called the Xbox 360 and PS3. And I get exclusives that are actually high quality AAA titles not on PC. Beat that Valve.
    -10
  • esrever
    Unless valve can offer something thats significantly better than console gaming with a low end steambox, they won't sell many consoles. Their target audience are people who most likely already own 1 or more consoles and making those people want a steambox is going to be challenging. They are also very unlikely to focus on the PC steam market to push the steambox because steam is free on PC and anyone well versed in PC gaming should be able to build their own steambox with customized parts. There is also the rumor of Valve using linux, which will drastically cut down on the available games on steam. If they don't push linux, then the windows cost will be too much to compete with other consoles.

    The Shield will be a niche device probably priced at $400+ for people who already own 6XX cards to do something novel. Nvidia won't sell at a loss and they already made the system's more distinct features very closed off. Nobody wants to play android games on a controller when they already have a phone.

    The steambox can succeed in the long run with valve support. The Shield won't likely have any real support from nvidia once they realize it won't sell in large quantities.
    9