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Microsoft Keeping Close Eye on SteamOS, Steam Machines

In a recent interview with Eurogamer, Microsoft corporate vice president Phil Harrison admitted that the company is going to keep a close eye on Valve Software's Steam Machines initiative. As the Redmond company is gearing up to launch its third entry into the living room, Valve is shooting to invade the same space with its own Linux-based SteamOS platform, Steam controllers and hardware solutions supplied by Steam Machines participants.

"Valve is a very impressive company, and obviously we're going to be watching what they do with great interest," he said.

"I think the death of the video game console was prematurely announced," he added. "Clearly there is a lot of excitement around gaming in the living room on the biggest screen in the house, often times connected to a great sound system and creating that real intensely high quality game experience with a very powerful CPU and a very powerful GPU."

Death of the video game console wasn't prematurely announced, as sales of the Wii U have shown. We still don't know the full potential of the upcoming Xbox One and PlayStation 4; they'll be popular, but will they save the declining console industry? With all the recent talk about the new consoles, it's easy to forget that console hardware and software sales were giving way to mobile devices and cheaper, on-the-go games. That could still happen after the initial launch window dust settles.

The Steam Machines initiative, as well as AMD's Mantle API, shows that the gaming industry outside the Microsoft/Sony/Nintendo trio wants change. The good news is that Microsoft and Sony seem to be catching on, shifting over to a "services" focus.

You also have to look at what's going on in the Android front. Sure, Android games won't match what's made available on the new consoles, but most of these titles -- if they're purchased through Google Play or Amazon's Appstore -- can be played outside the living room experience on phones, tablets and laptops. Even Nvidia's Shield handheld attempts to merge the Android and PC world, and it can connect to a big-screen TV just like any console. No longer are gamers merely content on playing titles on one stationary screen, and the console trio no longer has dibs on the big screen living room TV.

This is now why we're seeing talk of Microsoft and Sony reaching outside the box with possible streaming services. There's a non-PC gamer audience that doesn't want/can't afford the Xbox One and PlayStation 4 and are quite happy with their mobile devices, desktops and laptops. Streaming games to these devices would bring in loads more revenue, which would in turn strengthen the gaming industry. Of course, Microsoft and PlayStation 4 will have their console-only exclusives to sell the dedicated hardware.

With that said, it will be interesting to see how gamers take to the Steam Machines initiative as well. Like Microsoft, we'll be watching this movement closely, especially if AMD gets heavily involved. The Mantle initiative is highly interesting, but it's likely that it won't reach the casual audience that wants the games but not the hardware expense. "Competition is good," Harrison said. "I'm not going to speculate on what other companies may or may not be doing."

To some degree, Steam Machines will be Microsoft's primary enemy. Not only will this initiative possibly pull customers away from Xbox One sales, but from Windows 8 machines as well. The Linux-based SteamOS is focused on gaming, but given that Valve has entered the software and digital entertainment arena, we're betting the company is shooting for a Windows 8 competitor. So yeah, Microsoft will undoubtedly keep a very close eye on what Valve is doing.

Eurogamer also asked about Microsoft's possible support for the Oculus Rift on the Xbox One console, but Harrison dodged mentioning the headset directly.

"There are many business and technical reasons that would have to be overcome, so I'm not going to talk specifically about any brand or partner," he said. "But we've put USB 3.0 ports on Xbox One to facilitate high bandwidth connection with peripheral devices, so technically you could imagine a wide variety of devices being attached to Xbox One. What those actually are and when they show up is a different discussion."

To read the full interview, head here.

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