Umm what?
I swear, people are just grossly ignorant tools. Read this article. It's quick.
There are instantly 2 problems with Gabe Newell's quote. Firstly, the lions share of those 65 million customers are also Microsoft customers on Windows. And Windows has WAAAAAAAAAAAAAAAAAY more than just 65 million users. They have BILLIONS. In another word... they have at least more 2 orders of magnitude more subscribers on Windows alone.
And guess what? They didn't sell nearly that many Xbox 360's despite being the top selling console for a very long time.
That point may be splitting hairs. But, while the question may have been regarding the Xbox One vs Steam Box, you really need to look at it as Microsoft vs. Valve OR since this is really just a Linux computer with an OS designed to sit under your TV, Windows vs Steam OS.
In both comparisons Microsoft is actually trouncing Steam. And by no small margin.
And for the sake of my amusement. The REAL numbers in the Xbox One vs Steam Box battle are actually 3,000,000 vs 0. They have not sold a single Steam Box yet as it isn't on the market yet. That 65 million isn't Steam Box owners, or even Steam OS users. That 65 million is Steam subscribers.
ANY financial analyst worth his salary would take 3 million in ACTUAL sales over 65 million in POTENTIAL sales any day. Any statistician would as well. Hell, anyone with a brain should and probably would.
Frankly, Microsoft could fire back with, "we have billions of Windows subscribers, and just like your 65 million subscribers that COULD buy a Steam Box, our billions of Windows users COULD buy an Xbox One".
Which leads into the second fairly obvious problem. Which is similar to the flaw Steve Ballmer made when trying to drum up development support and support in general for Windows 8. He kept talking about the existing Windows ecosystem as though every customer and developer would jump on board just because they had a huge following. And we know, especially from the developer side of things that it just didn't happen. Heck many of the people moving onto Windows 8 don't like it and do it only because it is what comes preloaded on their PC's.
In the same way, there is absolutely no guarantee that those 65 million Steam subscribers will buy a Steam Box let alone ever use Steam OS.
To make matters worse... this is actually WORSE than the Steve Ballmer announcement. At least in the case of Windows 8 we were talking about moving from one OS to another. From Windows 7 to Windows 8. As long as existing Windows users don't change to Mac OS, then there is a really good possibility that as those computers are upgraded they will become Windows 8 machines. Windows 8's market share grows every day. And at a steady pace. And a very good many of those new Windows 8 activations are indeed people from those same billions Ballmer referenced. They just didn't get around to it as quickly as the outgoing CEO would have liked.
In the case of the Steam Box we are talking about moving from a free piece of software to a brand new $500 piece of equipment. Different price, different medium. In my mind, the argument for those 65 million users is among the weakest ever.
In my experience, most PC gamers would rather spend $500 on a new GPU than buy a console that won't allow them to play any new games or to play their existing games at a better resolution/quality. Then there are those who don't own a gaming PC to begin with.
And since I imagine that streaming to the Steam Box means that your gaming PC is tied up while you're streaming games from it. This means both a desktop and TV are consumed to play a game. I know a lot of households where that won't fly for long. Not every gamer has the luxury of both their own TV and gaming computer and Steam Box. In a household where electronics are shared this quickly becomes a deal breaker.
[update]
So, some of the CES 2014 information is popping up now. And in a way I'm surprised. Valve has managed to muster a goodly number of OEM's around the Steam Box idea. But what is weird is the sheer volume of configurations including many that will come with the option to boot Windows out of the box instead of Steam OS. My suspicion is that after Windows 8 didn't take off as expected OEM's have been looking for something else to get behind. And they mistakenly chose this. The ones offering Windows instead of Steam OS are the smarter ones, but not that much smarter.
These boxes are just an array of very sleek and for the most part very expensive PC's. In fact, all this move with the OEM's accomplishes is to prove that the Steam Box isn't a console at all. The Steam Box is just a PC. And they are helping that image along, which I think will only help to ruin the platform in the long run. If Valve was the only hardware OEM of official Steam Boxes, at least to start, it would have held a much better chance of succeeding.
This fragmentation of hardware sales and marketing will just result in each player in the game getting an even smaller slice of what may very well be a miniscule market. Especially to begin with. Which means many OEM's will back out before it ever had a chance to catch on. Which is why it had a better chance of surviving with just one OEM to start. Getting 100% of revenue stream means a better ability to stick with it until it catches on.
I already felt that a $500 Steam Box was a tough proposition considering it required a separate gaming PC to access to bulk of Steam's catalogue. And none of the ones that had prices already listed undercut Valve's offering. Some were even north of $1000. How big is the market segment for people who can all of afford, justify and want both a $1000+ gaming PC, and a $1000+ set top box? The correct answer; Even smaller than the market for those who could do the same but with a $1000+PC and a $500 set top box.
I predict that true Steam Boxes (those with just Steam OS pre-installed) will fail miserably. I also predict that Steam OS will do fine as an OS with a cult following of people building cheap Steam OS powered PC's solely for use as streaming devices. Some with extra money and parts may build out "proper" Steam OS machines capable of actually playing games in Steam's Linux catalogue. But I think in the long run, this will never be a mainstream platform. At least not in this form.
Maybe, next year at CES we'll see Valve partnering with smart TV producers or other set top box producers to get just the streaming component built in. I think this would have a HUGE market. And amusingly, I think this completely non-console related approach would hasten the demise of consoles faster than anything else I have considered thus far in my blog. Again though, this wouldn't do anything to Microsoft on the whole. As long as the Windows game catalogue out paces the Linux game catalogue for premium titles, it just means those people buy a gaming computer and pay for a Windows license instead of an Xbox, and software is much better margins.
[/update]
There are instantly 2 problems with Gabe Newell's quote. Firstly, the lions share of those 65 million customers are also Microsoft customers on Windows. And Windows has WAAAAAAAAAAAAAAAAAY more than just 65 million users. They have BILLIONS. In another word... they have at least more 2 orders of magnitude more subscribers on Windows alone.
And guess what? They didn't sell nearly that many Xbox 360's despite being the top selling console for a very long time.
That point may be splitting hairs. But, while the question may have been regarding the Xbox One vs Steam Box, you really need to look at it as Microsoft vs. Valve OR since this is really just a Linux computer with an OS designed to sit under your TV, Windows vs Steam OS.
In both comparisons Microsoft is actually trouncing Steam. And by no small margin.
And for the sake of my amusement. The REAL numbers in the Xbox One vs Steam Box battle are actually 3,000,000 vs 0. They have not sold a single Steam Box yet as it isn't on the market yet. That 65 million isn't Steam Box owners, or even Steam OS users. That 65 million is Steam subscribers.
ANY financial analyst worth his salary would take 3 million in ACTUAL sales over 65 million in POTENTIAL sales any day. Any statistician would as well. Hell, anyone with a brain should and probably would.
Frankly, Microsoft could fire back with, "we have billions of Windows subscribers, and just like your 65 million subscribers that COULD buy a Steam Box, our billions of Windows users COULD buy an Xbox One".
Which leads into the second fairly obvious problem. Which is similar to the flaw Steve Ballmer made when trying to drum up development support and support in general for Windows 8. He kept talking about the existing Windows ecosystem as though every customer and developer would jump on board just because they had a huge following. And we know, especially from the developer side of things that it just didn't happen. Heck many of the people moving onto Windows 8 don't like it and do it only because it is what comes preloaded on their PC's.
In the same way, there is absolutely no guarantee that those 65 million Steam subscribers will buy a Steam Box let alone ever use Steam OS.
To make matters worse... this is actually WORSE than the Steve Ballmer announcement. At least in the case of Windows 8 we were talking about moving from one OS to another. From Windows 7 to Windows 8. As long as existing Windows users don't change to Mac OS, then there is a really good possibility that as those computers are upgraded they will become Windows 8 machines. Windows 8's market share grows every day. And at a steady pace. And a very good many of those new Windows 8 activations are indeed people from those same billions Ballmer referenced. They just didn't get around to it as quickly as the outgoing CEO would have liked.
In the case of the Steam Box we are talking about moving from a free piece of software to a brand new $500 piece of equipment. Different price, different medium. In my mind, the argument for those 65 million users is among the weakest ever.
In my experience, most PC gamers would rather spend $500 on a new GPU than buy a console that won't allow them to play any new games or to play their existing games at a better resolution/quality. Then there are those who don't own a gaming PC to begin with.
And since I imagine that streaming to the Steam Box means that your gaming PC is tied up while you're streaming games from it. This means both a desktop and TV are consumed to play a game. I know a lot of households where that won't fly for long. Not every gamer has the luxury of both their own TV and gaming computer and Steam Box. In a household where electronics are shared this quickly becomes a deal breaker.
[update]
So, some of the CES 2014 information is popping up now. And in a way I'm surprised. Valve has managed to muster a goodly number of OEM's around the Steam Box idea. But what is weird is the sheer volume of configurations including many that will come with the option to boot Windows out of the box instead of Steam OS. My suspicion is that after Windows 8 didn't take off as expected OEM's have been looking for something else to get behind. And they mistakenly chose this. The ones offering Windows instead of Steam OS are the smarter ones, but not that much smarter.
These boxes are just an array of very sleek and for the most part very expensive PC's. In fact, all this move with the OEM's accomplishes is to prove that the Steam Box isn't a console at all. The Steam Box is just a PC. And they are helping that image along, which I think will only help to ruin the platform in the long run. If Valve was the only hardware OEM of official Steam Boxes, at least to start, it would have held a much better chance of succeeding.
This fragmentation of hardware sales and marketing will just result in each player in the game getting an even smaller slice of what may very well be a miniscule market. Especially to begin with. Which means many OEM's will back out before it ever had a chance to catch on. Which is why it had a better chance of surviving with just one OEM to start. Getting 100% of revenue stream means a better ability to stick with it until it catches on.
I already felt that a $500 Steam Box was a tough proposition considering it required a separate gaming PC to access to bulk of Steam's catalogue. And none of the ones that had prices already listed undercut Valve's offering. Some were even north of $1000. How big is the market segment for people who can all of afford, justify and want both a $1000+ gaming PC, and a $1000+ set top box? The correct answer; Even smaller than the market for those who could do the same but with a $1000+PC and a $500 set top box.
I predict that true Steam Boxes (those with just Steam OS pre-installed) will fail miserably. I also predict that Steam OS will do fine as an OS with a cult following of people building cheap Steam OS powered PC's solely for use as streaming devices. Some with extra money and parts may build out "proper" Steam OS machines capable of actually playing games in Steam's Linux catalogue. But I think in the long run, this will never be a mainstream platform. At least not in this form.
Maybe, next year at CES we'll see Valve partnering with smart TV producers or other set top box producers to get just the streaming component built in. I think this would have a HUGE market. And amusingly, I think this completely non-console related approach would hasten the demise of consoles faster than anything else I have considered thus far in my blog. Again though, this wouldn't do anything to Microsoft on the whole. As long as the Windows game catalogue out paces the Linux game catalogue for premium titles, it just means those people buy a gaming computer and pay for a Windows license instead of an Xbox, and software is much better margins.
[/update]
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