Trojan Horses

With the recent announcement of real, live, actual Steam Machines this past CES and the ongoing Steam Dev Days, Valve has been on in the spotlight for a long time now.  With Steam Machines just over the horizon, I want to take this time to revist some of my earlier theories in light of some recent information.

 

I still think the machines are a bad idea from a console lover's perspective and that hasn't changed.  In fact, it only got reinforced as several manufacturers confirmed that the machines will be aimed at existing Steam customers.  It is all well and good, they say, if console gamers adopt Steam Machines, but first and formost, the boxes would be meant for existing Steam gamers.  Basically, they are asking fans to buy a second PC, this time, for use in the living room.  This makes no sense. 

 

Unless there's something else involved. 

 

I don't have any proof, but I think this has less to do with game boxes in your living room, and more to do with the operating system.  As mentioned in another blog of mine, there isn't a single console manufacturer who boasts about their operating system.  Until now.  I think there's a good reason for it.  Steam is already very large in the PC arena, but as big as they get, they will always be shackled by Microsoft Windows.  If Windows do well, Steam does well.  If not, then not so well.  With PC sales sagging under the weight of smart phones and tablets, Valve is probably worried about their future.  Afterall, they do not have a foot hold in the mobile market.  Which is why they are now creating their own with Steam OS.

 

The living room space is a frontier that hasn't quite been conquered.  Every day is a battle between the Big Three.  Not like the PC, where Windows is king.  There's room here in the living room market to make an impact.  The Steam Machines are a trojan horse for Steam OS.  Sell enough machines, and you will propogate the operating system.  And it's very well possible that the machines will sell very much indded.  Valve recently release new figures.  There are over 70 million active Steam accounts, right now.  Suppose just 10% of PC gamers make the jump to a Steam Machine.  That's 7 million units sold, each one with Steam OS.  To be fair, some manufaturers are installing their machines with both Windows and Steam OS, but not a single machine will ship without Steam.  All of a sudden, Steam OS users would be 7 million large.  Even if only five percent of gamers choose to buy a machine, it's still 3.5 million.  That's right up there with PS4 and Xbone.  Not too shabby.

 

But why is the OS important?  Afterall, Steam OS is based off Linux, and Linux is open source and free.  What does Valve gain?  Well, what does Microsoft gain?  iOS?  Or Google's Android?  The power of incumbency.  Internet Exploerer is the most popular web brower.  Not because it's better than the competition, but because it comes with every copy of Windows.  Both Apple and Google control the app spaces on their iOS and Android with their respective stores.  Can Valve take advantage of this?  Suppose Steam Machines take off better than people would expect.  Every machine comes with Steam OS, and every Steam OS is installed with Steam.  All of a sudden, Valve's got a foothold in your gaming purchase decision, just by being there, by default.  Steam OS itself is a second trojan horse, this time, for Steam the vendor.

 

Right now, Steam isn't included with every copy of Windows nor will it ever be.  The biggest thing about Windows 8 isn't how ugly it looks, but the app store.  It's Microsoft taking a page from Apple and Google and creating their own default vendor with every copy of their latest Windows.  They will never let Valve be that vendor.  But it's too little, too late.  Steam already has a strangle hold on the PC market, and Microsoft's app store hasn't taken off.  Not for lack of trying, however.  But how long will this last?  As MS gears up for another round of dominance with Windows 9, where does that leave Valve?  With the rise of Apple and Android, where can they go? 

 

It's true.  At first glace, the Steam Machine makes very little sense.  But if you were a top player being squeezed by all sides, yet have the numbers to back you up in the foreseeable future, wouldn't you, too, take a gamble on dominance?  To take your own chunk out of a big pie?  Of course.  And if anyone has the means, the will, and the reason to do so, it's Valve.