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

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.

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.

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.

Despite the ire that is often raised, the reason that there is a big three in the console wars (not counting PCs of course) is precisely because it's difficult to ship new hardware in sufficient quantities to meet demand and sufficient quantities to make a profit. Arguably three consoles is an equilibrium and a powerful new entrant could push out one of the existing three. Nvidia has that potential with their thing. I suppose Valve as a whole does, but the Steam Box just seems too much like a black sheep - I can't understand why one wouldn't just set their computer beside their TV or build a small rig that would accomplish the exact same thing.

The other matter not addressed in the story above is the game development. Every system needs some exclusives and the willingness for third-party developers to make games for the system. That's development cost for a game maker who has already been working with other systems. Arguably neither the Steam Box nor Shield need much if any re-coding for porting and so forth, but it is still a question that must be asked by a developer, and by a consumer who is looking at the future of the gaming arena.

Right now it would seem Sony is in the most fragile position. The PS3 has been more successful than the Xbox 360, but Sony as a company has faced more headwinds, and reports about their plans for the PS4 suggest that it is going to be a very major flop on arrival due to restrictions on used games. So the Steam Box could be successful, and the Shiled could be successful, and if they are I suspect that it will be at the detriment to Sony, less likely MSFT, and highly unlikely to Nintendo.