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Recently, I visited Valve to check out their upcoming Steam Machine,

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a gaming PC that has the potential to massively shake up the gaming console industry.

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They were shockingly open about the specs, features, and the design,

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but there is one piece of the puzzle that Valve is keeping close to their chest, the price.

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And that's a pretty important piece because when you look at the discussion online,

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people love this thing because they think it's going to be a $500 console killer,

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or they hate it because they think it's going to be yet another mid-spec pre-built gaming PC

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for a thousand US dollars. But which one is it? Valve won't tell us yet for some good reasons

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that we'll get to later, but what we do have is enough information and enough lines to read between

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that I believe we can make such an accurate guess that if we're off by more than 60 US dollars,

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I will eat an entire portal cake on the WAN Show. What is a portal cake?

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You don't remember the cake as a lie? An entire cake?

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That's true this time. Okay. Well, because I counted on you guys to help with the work,

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you are going to help me eat it. Gladly. We win as a team and we die as a team here.

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But I don't think that's going to happen because our theory is solid and it starts

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with the comparison system behind me. This approximation will both give us a sense for

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what a DIY steam machine would cost today, as well as give us a sense of how it might perform.

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Because Valve, they ain't no fools. They care a lot about the perceived value of the experience

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of using the steam machine, not just the raw specs. Let's start with their CPU then, or rather,

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not quite their CPU. See, the steam machine uses a semi-custom six core chip from AMD and,

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while we would have loved to use the near identical Ryzen 5 7540U, we don't have a custom

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motherboard to solder it to, so we're going to be stuck with the socketed desktop Ryzen 5 8400F.

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To get our performance estimate a little closer though, we're going to tweak its power and clock

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frequency to be closer to Valve's baby, about like so. Now we just need to save and quit.

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It's not working. Oh wait, I know what the problem is. We didn't configure our segue to our sponsor.

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Now we just put our equivalent CPU in there and immediately we're completely off the rails

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with the ASRock B650M-HM.2 Plus, a motherboard that, other than being a motherboard, is as

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different as possible from the one inside the steam machine. For starters, it's much larger,

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with robust power delivery and a plethora of expansion ports and slots that just aren't needed

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in the GameCube, which, other than a socketed SSD and system memory, uses soldered components

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to save on space, complexity and cost. Our board then is likely much more expensive than the one

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that Valve is using. However, the flip side is that creating a custom motherboard, that ain't free,

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and Valve is going to have to make up those costs somewhere. Perhaps by cheaping out on the RAM?

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Now we don't know for sure that Valve will select generic Jdex speed RAM like this 16 gig kit from

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Crucial, but what we do know is that they've chosen compact so-dim modules in order to save space,

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which could cost them a little bit extra. We also know that the 7540U is rated for a maximum speed

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of 5600Mbps, and unless Valve went more custom than they let on, that's probably about as fast

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as their semi-custom silicon will go. But that raises a big question. How custom did they go?

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What does semi-custom actually mean? As it turns out, it means pretty much off the shelf,

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but with some tuning to the firmware, power profile and drivers. And that choice tells us a fair bit

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actually. Think back to the recent news about Xbox reportedly cancelling their handheld.

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Allegedly, that was at least partially due to the fact that AMD wouldn't commit to a custom SOC

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unless Microsoft could guarantee at least 10 million units sold. So what I'm hearing is

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Valve is projecting enough sales to bother doing this project at all, and probably enough for AMD

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to give them a measurable price break, but not enough to sell 10 million steam machines. Because

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if that were the case, they might have chosen something more custom, a strategy that clearly

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contributed to the incredible price to performance ratio of their handheld console, the Steam Deck.

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There's any number of different ways to interpret this. I mean, Valve has been burned on Steam

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machines before. Are they just playing it safe this time? Or do they just think the market for a

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Steam living room console that's also a computer is relatively small? I mean, to you and me,

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10 million units is huge. I'd be stoked to sell 10 million units of anything,

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like the new transparent screwdriver from lttstore.com. But when we compare that number to

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console sales, yeah, it is tiny. Even infamous failures like the PS Vita and the Wii U sold

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significantly more than that. So to me, this reinforces the few hints that Valve has given

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with respect to pricing. What it tells us is that while Valve could look for every possible lever

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to drive down price, they just aren't that interested in betting big on upending the

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console market. It seems like they're more interested in replicating the Steam Deck's success

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by giving gamers more ways to play Steam games and putting a reference platform out there for

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other hardware manufacturers to chase. And who knows, maybe install Steam OS on? With that in

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mind then, it's not in Valve's best interest to monopolize the market. They want to drive

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competition in it, which unfortunately means they aren't likely to slim down their margins

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and hit a Christmas-listable $500 mainstream console price point. I actually asked Valve about

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that point blank, and while they didn't say no, they also didn't say no. Which is kind of a downer.

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And we've yet to complete our descent. As I install our Kingston NV3 with 500 gigs of storage,

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I can't help but be reminded of the rising costs of both the NAND Flash storage chips that are at

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the heart of every SSD and every type of memory right now. Like, both of them are more out of

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control than a pre-teen on Maury COVID. Catch me outside! And even though it's not intuitive,

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this is mostly due to the insatiable demands of AI factories and hyperscalers who are sucking up

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all the available production. And guess what? It gets worse. While US tariffs seem to be easing

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off a little, there is no denying that global trade friction and protectionism are hot trends

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right now. And in just the few months between now and broad availability of the steam machine,

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any given part of it could easily face cost increases due to these factors.

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Rounding out our test bench, we've got an AMD stock cooler, since we're going to be limiting

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our CPU to 30 watts anyway, and powering it this Seasonic Focus GX550. Not because the steam machine

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will have a 550 watt power supply, but because where the heck am I supposed to find a desktop

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power supply that is both high quality and also 300 watts? Now it's time to talk about what is

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arguably the most important piece of any gaming PC, the GPU. What we know is that the steam machine

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will have a semi-custom AMD RDNA3 GPU, we know it will consume the lion's share of the system's power,

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and we know that it will come with 8GB of dedicated GDDR6 VRAM. That actually lines up

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pretty closely with another product in AMD's lineup, the Radeon RX7600M. Sadly though, the M,

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once again, stands for mobile, so we couldn't find that GPU in a form factor that we could

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plug into a regular desktop. So once again, we need to look for the closest equivalent.

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This could be a problem. The most obvious choice would of course be the full-sized RX7600, right?

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I mean it's got the same dang numbers in the product name, so it must perform the dang same

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then, right? Wrong! It is much faster in most benchmarks. And if we want a GPU with similar

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performance, we end up with the RX6600, but that is a full-generation older, which means that it

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might not have the best support for AMD's latest features, and depending on the games we run and

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how much ray traced lighting they use, its performance profile is not going to be the same

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either. But what it does have is the same CU count and very similar boost clocks,

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and even the power rating is very similar, so I guess we go with this? Which brings us to pricing.

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David, where are we at? I would tell you that, but we're not done yet. You fell victim to one of

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the classic PC comparison blunders. You don't have a controller, but the Steam machine will come

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with a pretty fancy one. Oh. I chose the Cyclone 2 from GameSir as our stand-in. It's a high quality

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wireless controller with TMR sticks that comes with its own charging dock, all for 56 bucks,

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but the box is missing its dongle, so instead we're going with the winner of the ultimate controller

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showdown from last year, the EZ SMX20. You love this controller. Okay, but that's still the same price

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anyway. It's close enough that our calculations are still correct. Okay, so what are our calculations?

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Well, if we were to build this machine using the lowest historical pricing

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from the cheapest sources, which I would like to, and let's say we add 50 bucks for a case,

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we're looking at just over 600 US dollars. Oh, well, that's great news. I mean,

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it's SteamOS, so there's no Windows tax, so 599. I was not done. If we build it today in the

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current market conditions from the cheapest sources, we're looking at close to 900 dollars.

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Oh, but we don't have to buy these exact parts. No, if we're deal hunters and we don't mind giving

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up some of the bells and whistles and some of the name brands, it would save you about 100 bucks

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without giving up any performance. Okay, but that's retail pricing. That's got some margin built into

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it, so I don't think I'd say 799 either, or maybe I would. Chatting with some industry sources,

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it's estimated that there's as little as 10% net profit in PC parts, which would put our estimated

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cost between 700 and 750 dollars. With that said, Valve benefits from a direct-to-consumer model,

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meaning that they get to take both the brand and retailer margins. And as we already acknowledged,

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we did overspend on a number of our components, including the power supply, the motherboard,

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and the case, compared to what Valve would pay. With that said, in today's market, I still don't

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think they're going to get costs under 600 to 650 dollars, meaning that the final question is,

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what kind of markup will Valve target on the steam machine? Without being a fly on the wall in their

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boardroom, it's impossible to say for sure. All that Valve would tell us is that they want their

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hardware business to be sustainable. But what does that mean? I think it means 699 US. If

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there's no major changes in the market. It's probably above Valve's cost today, and there'll

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be some opportunity for them to improve their margins over the several-year lifespan of their

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device as their initial investment gets paid off, and hopefully RAM and SSD pricing returns to

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some kind of normalcy. And if we factor in nice-to-haves, like the dedicated antenna for up to

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four wireless steam controllers, not to mention the controller itself, the steam machine presents

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a compelling value at that price without completely undercutting the market. And, maybe this is the

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most important factor, it's kind of a funny number. I don't love this answer, and I'm sure I'm not the

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only one who's sitting here wishing that it was priced like a game console. I mean, who wouldn't

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want that affordable of a PC? But you see what I did just there? I just moved the goalpost. A big

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part of the reason I want this thing to be affordable so bad is because it is a PC with all the

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benefits of a PC, like no-cost online play for most games, the ability to take advantage of steam

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sales, not to mention other gaming marketplace sales, and maybe most importantly, the ability to use

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it for all kinds of non-gaming applications. But it's exactly that PC-ness that makes the

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console pricing model just not work for Valve. It would take a matter of minutes for me to grab

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my brand new steam machine, install Windows and Epic Games Store on it, and then never give a penny

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of ongoing revenue to Valve. So, coming back to that word, sustainable. If they want their hardware

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business to make business sense, they can't risk pricing this thing so attractively that,

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say, a corporate office might buy 80,000 steam machines and kid out their entire workforce,

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all of whom will buy a total of goose egg games. Now, the steam deck was never in any real danger

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of that happening, which is why it could be priced as aggressively as it was. But the same can't be

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said for the steam machine. So, with that in mind, what are we getting for our $700 or at most $800

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if the market goes completely wackadoodle? Man, steam wants rocks. I know, right? Of course,

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that's not what we're evaluating today. Nope. Today, we're looking at the performance. So,

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we'll start up by firing up Hades 2. You're only getting like 200 to 300 frames, Linus. It's kind

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of embarrassing. Okay, well, we always knew that games like this were going to play just fine on

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the steam machine. What we really care about is how something more challenging is going to run.

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And our plan was to go with the game that seems poised to win Game of the Year, Expedition 33.

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But unfortunately, it's running in the steam deck profile with no way for us to reconfigure it on

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SteamOS right now. So, Cyberpunk, I guess. It's the crisis of the 2020s. This looks pretty good.

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Yeah, it looks pretty, but Cyberpunk at 4k medium details would look pretty. I can tell you as the

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person holding the controller, though, 45 FPS is not great for driving. But what's up with that?

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Valve said that out of the gate, the steam machine should be capable of running pretty much any game

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on Steam at 4k with FSR, about 60 FPS. Well, that's where there's clearly some tuning for them to do.

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Let's see if we can get to 60. Why don't we start with a low rather than a medium preset,

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and then let's change our FSR to Performance, which renders the game at an even lower resolution

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before upscaling. Oh, hey, that looks better. That is above 60. That sounds pretty good.

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Yeah, it still looks D's. There's a little bit of graininess. I mean, there's always a little bit

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of graininess inside of a point. Yeah, that's true. You crank it, it's just kind of like a gritty,

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grainy style. Yeah, that was on purpose, right? Yeah. Yeah. Yeah. Night City. This is very good.

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It's not the highest I've ever seen cyberpunk look, but if you have complaints about this,

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you're very picky. But who's to say that gamers shouldn't be discerning? While this looks fine

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in a vacuum, it's only as good as how it stacks up to the competition. How does it look next to,

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say, a PlayStation 5? What about second 4k display? Normally, we'd have to have multiple

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circuits to run two PCs, but the steam machine is going to be such a low powered thing that we can

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have two TVs, a PlayStation, and a computer all in one. That's actually a pretty good point. The

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expectations for running something in your living room are a little bit different than, you know,

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a dedicated battle station of a gaming PC. Being power efficient is definitely a plus. We're not

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in quite the same spot, but this is enough to give us an idea of how these systems will compare,

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both in terms of performance and in terms of image quality. It's funny. I think I'm actually

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running a touch sharper than you. Way sharper. I think I have better lighting. Your lighting.

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Details are better than mine. Is definitely better. But if I were to pick one, I actually think I would

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pick that. I was going to say, I'd probably pick the PlayStation. Interesting. You're in performance

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mode right now, right? Yes. Which means you're getting about 60 FPS, which is about the same as

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what I'm getting. Either way, though, there's no clear winner. There's no obvious winner, which

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tells us that as long as they're reasonably within range of a PlayStation 5 on price, they're reasonably

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within range on performance. 100%. Here, do you want to try? Yeah. Just your inputs feel looser

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just because of the v-sync. Also, that's a better controller than this. I'm sorry. The joysticks,

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anyway. Yeah. The joysticks. The triggers on the DualSense are so cool. Yeah. Now that I'm on the

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PlayStation 5, my level of detail at a distance is, ah, man, no, I don't know. Actually,

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LOD might be similar. It's the lighting. Yeah. It's the lighting that makes a huge difference on

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the PlayStation. The nice thing about the Steam Deck is because it's a PC, you can tweak it to

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have the settings you want. That's true. And so, I find everyone's a little bit more sensitive to

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different settings appearing in their graphics. And so, having control over that's really nice.

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Like, you might not worry that much about jaggies, so then you can put that headroom somewhere else.

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On PlayStation, it's either 60 or 30, baby. That's your choice. Yeah. Like, if you sit

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farther from your TV, you could run that at 1080p if you really wanted to. Totally. So, bottom line,

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Valve clearly has a couple of little details to polish up, but they have a few months to do it,

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and they've also made it very clear that they feel there is more juice to be squeezed from the

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hardware from a performance standpoint as well, with their custom drivers for AMD Radeon cards,

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not to mention deep integration with SteamOS, which we can't count on until we get the real

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Steam machine in our hands, not this Frankenstein's monster, but even based on what we've seen so

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far, at this performance level, at this price, with this level of flexibility, not to mention that

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it's really small and damn near dead silent, I think it looks like a pretty compelling value.

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And according to Valve, the market for this box might be bigger than you would think.

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They estimate that the Steam machine will be more powerful than what 70% of Steam users currently

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have. That doesn't necessarily translate to something that 70% of users would be interested

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in purchasing, but it does mean that it's almost certain that the Steam machine will find an audience,

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even if it does cost more than we estimate. I just hope that it doesn't cost too much,

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or if it does cost too much, I hope it doesn't succeed too much because I'd love for Valve to

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just say, oh, we didn't sell enough of these. You know what, screw it. Let's just upend the living

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room console, not to mention the entry level workstation space. Like, look at the way the Steam

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deck seems to have lit a fire under Nintendo's lethargic butt. I love Valve as a disrupter,

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and I also love our sponsor. If you guys want more Steam machine content, get subscribed,

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as we have more on the way, but in the meantime, you should check out either of our recent Valve

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hardware coverage, or hey, maybe have about the time we deep dived into the state of SteamOS on

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non-Valve hardware. SteamOS is likely to end up far more important than the Steam deck and the Steam

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machine combined.