Recently, I visited Valve to check out their upcoming Steam Machine,
a gaming PC that has the potential to massively shake up the gaming console industry.
They were shockingly open about the specs, features, and the design,
but there is one piece of the puzzle that Valve is keeping close to their chest, the price.
And that's a pretty important piece because when you look at the discussion online,
people love this thing because they think it's going to be a $500 console killer,
or they hate it because they think it's going to be yet another mid-spec pre-built gaming PC
for a thousand US dollars. But which one is it? Valve won't tell us yet for some good reasons
that we'll get to later, but what we do have is enough information and enough lines to read between
that I believe we can make such an accurate guess that if we're off by more than 60 US dollars,
I will eat an entire portal cake on the WAN Show. What is a portal cake?
You don't remember the cake as a lie? An entire cake?
That's true this time. Okay. Well, because I counted on you guys to help with the work,
you are going to help me eat it. Gladly. We win as a team and we die as a team here.
But I don't think that's going to happen because our theory is solid and it starts
with the comparison system behind me. This approximation will both give us a sense for
what a DIY steam machine would cost today, as well as give us a sense of how it might perform.
Because Valve, they ain't no fools. They care a lot about the perceived value of the experience
of using the steam machine, not just the raw specs. Let's start with their CPU then, or rather,
not quite their CPU. See, the steam machine uses a semi-custom six core chip from AMD and,
while we would have loved to use the near identical Ryzen 5 7540U, we don't have a custom
motherboard to solder it to, so we're going to be stuck with the socketed desktop Ryzen 5 8400F.
To get our performance estimate a little closer though, we're going to tweak its power and clock
frequency to be closer to Valve's baby, about like so. Now we just need to save and quit.
It's not working. Oh wait, I know what the problem is. We didn't configure our segue to our sponsor.
Now we just put our equivalent CPU in there and immediately we're completely off the rails
with the ASRock B650M-HM.2 Plus, a motherboard that, other than being a motherboard, is as
different as possible from the one inside the steam machine. For starters, it's much larger,
with robust power delivery and a plethora of expansion ports and slots that just aren't needed
in the GameCube, which, other than a socketed SSD and system memory, uses soldered components
to save on space, complexity and cost. Our board then is likely much more expensive than the one
that Valve is using. However, the flip side is that creating a custom motherboard, that ain't free,
and Valve is going to have to make up those costs somewhere. Perhaps by cheaping out on the RAM?
Now we don't know for sure that Valve will select generic Jdex speed RAM like this 16 gig kit from
Crucial, but what we do know is that they've chosen compact so-dim modules in order to save space,
which could cost them a little bit extra. We also know that the 7540U is rated for a maximum speed
of 5600Mbps, and unless Valve went more custom than they let on, that's probably about as fast
as their semi-custom silicon will go. But that raises a big question. How custom did they go?
What does semi-custom actually mean? As it turns out, it means pretty much off the shelf,
but with some tuning to the firmware, power profile and drivers. And that choice tells us a fair bit
actually. Think back to the recent news about Xbox reportedly cancelling their handheld.
Allegedly, that was at least partially due to the fact that AMD wouldn't commit to a custom SOC
unless Microsoft could guarantee at least 10 million units sold. So what I'm hearing is
Valve is projecting enough sales to bother doing this project at all, and probably enough for AMD
to give them a measurable price break, but not enough to sell 10 million steam machines. Because
if that were the case, they might have chosen something more custom, a strategy that clearly
contributed to the incredible price to performance ratio of their handheld console, the Steam Deck.
There's any number of different ways to interpret this. I mean, Valve has been burned on Steam
machines before. Are they just playing it safe this time? Or do they just think the market for a
Steam living room console that's also a computer is relatively small? I mean, to you and me,
10 million units is huge. I'd be stoked to sell 10 million units of anything,
like the new transparent screwdriver from lttstore.com. But when we compare that number to
console sales, yeah, it is tiny. Even infamous failures like the PS Vita and the Wii U sold
significantly more than that. So to me, this reinforces the few hints that Valve has given
with respect to pricing. What it tells us is that while Valve could look for every possible lever
to drive down price, they just aren't that interested in betting big on upending the
console market. It seems like they're more interested in replicating the Steam Deck's success
by giving gamers more ways to play Steam games and putting a reference platform out there for
other hardware manufacturers to chase. And who knows, maybe install Steam OS on? With that in
mind then, it's not in Valve's best interest to monopolize the market. They want to drive
competition in it, which unfortunately means they aren't likely to slim down their margins
and hit a Christmas-listable $500 mainstream console price point. I actually asked Valve about
that point blank, and while they didn't say no, they also didn't say no. Which is kind of a downer.
And we've yet to complete our descent. As I install our Kingston NV3 with 500 gigs of storage,
I can't help but be reminded of the rising costs of both the NAND Flash storage chips that are at
the heart of every SSD and every type of memory right now. Like, both of them are more out of
control than a pre-teen on Maury COVID. Catch me outside! And even though it's not intuitive,
this is mostly due to the insatiable demands of AI factories and hyperscalers who are sucking up
all the available production. And guess what? It gets worse. While US tariffs seem to be easing
off a little, there is no denying that global trade friction and protectionism are hot trends
right now. And in just the few months between now and broad availability of the steam machine,
any given part of it could easily face cost increases due to these factors.
Rounding out our test bench, we've got an AMD stock cooler, since we're going to be limiting
our CPU to 30 watts anyway, and powering it this Seasonic Focus GX550. Not because the steam machine
will have a 550 watt power supply, but because where the heck am I supposed to find a desktop
power supply that is both high quality and also 300 watts? Now it's time to talk about what is
arguably the most important piece of any gaming PC, the GPU. What we know is that the steam machine
will have a semi-custom AMD RDNA3 GPU, we know it will consume the lion's share of the system's power,
and we know that it will come with 8GB of dedicated GDDR6 VRAM. That actually lines up
pretty closely with another product in AMD's lineup, the Radeon RX7600M. Sadly though, the M,
once again, stands for mobile, so we couldn't find that GPU in a form factor that we could
plug into a regular desktop. So once again, we need to look for the closest equivalent.
This could be a problem. The most obvious choice would of course be the full-sized RX7600, right?
I mean it's got the same dang numbers in the product name, so it must perform the dang same
then, right? Wrong! It is much faster in most benchmarks. And if we want a GPU with similar
performance, we end up with the RX6600, but that is a full-generation older, which means that it
might not have the best support for AMD's latest features, and depending on the games we run and
how much ray traced lighting they use, its performance profile is not going to be the same
either. But what it does have is the same CU count and very similar boost clocks,
and even the power rating is very similar, so I guess we go with this? Which brings us to pricing.
David, where are we at? I would tell you that, but we're not done yet. You fell victim to one of
the classic PC comparison blunders. You don't have a controller, but the Steam machine will come
with a pretty fancy one. Oh. I chose the Cyclone 2 from GameSir as our stand-in. It's a high quality
wireless controller with TMR sticks that comes with its own charging dock, all for 56 bucks,
but the box is missing its dongle, so instead we're going with the winner of the ultimate controller
showdown from last year, the EZ SMX20. You love this controller. Okay, but that's still the same price
anyway. It's close enough that our calculations are still correct. Okay, so what are our calculations?
Well, if we were to build this machine using the lowest historical pricing
from the cheapest sources, which I would like to, and let's say we add 50 bucks for a case,
we're looking at just over 600 US dollars. Oh, well, that's great news. I mean,
it's SteamOS, so there's no Windows tax, so 599. I was not done. If we build it today in the
current market conditions from the cheapest sources, we're looking at close to 900 dollars.
Oh, but we don't have to buy these exact parts. No, if we're deal hunters and we don't mind giving
up some of the bells and whistles and some of the name brands, it would save you about 100 bucks
without giving up any performance. Okay, but that's retail pricing. That's got some margin built into
it, so I don't think I'd say 799 either, or maybe I would. Chatting with some industry sources,
it's estimated that there's as little as 10% net profit in PC parts, which would put our estimated
cost between 700 and 750 dollars. With that said, Valve benefits from a direct-to-consumer model,
meaning that they get to take both the brand and retailer margins. And as we already acknowledged,
we did overspend on a number of our components, including the power supply, the motherboard,
and the case, compared to what Valve would pay. With that said, in today's market, I still don't
think they're going to get costs under 600 to 650 dollars, meaning that the final question is,
what kind of markup will Valve target on the steam machine? Without being a fly on the wall in their
boardroom, it's impossible to say for sure. All that Valve would tell us is that they want their
hardware business to be sustainable. But what does that mean? I think it means 699 US. If
there's no major changes in the market. It's probably above Valve's cost today, and there'll
be some opportunity for them to improve their margins over the several-year lifespan of their
device as their initial investment gets paid off, and hopefully RAM and SSD pricing returns to
some kind of normalcy. And if we factor in nice-to-haves, like the dedicated antenna for up to
four wireless steam controllers, not to mention the controller itself, the steam machine presents
a compelling value at that price without completely undercutting the market. And, maybe this is the
most important factor, it's kind of a funny number. I don't love this answer, and I'm sure I'm not the
only one who's sitting here wishing that it was priced like a game console. I mean, who wouldn't
want that affordable of a PC? But you see what I did just there? I just moved the goalpost. A big
part of the reason I want this thing to be affordable so bad is because it is a PC with all the
benefits of a PC, like no-cost online play for most games, the ability to take advantage of steam
sales, not to mention other gaming marketplace sales, and maybe most importantly, the ability to use
it for all kinds of non-gaming applications. But it's exactly that PC-ness that makes the
console pricing model just not work for Valve. It would take a matter of minutes for me to grab
my brand new steam machine, install Windows and Epic Games Store on it, and then never give a penny
of ongoing revenue to Valve. So, coming back to that word, sustainable. If they want their hardware
business to make business sense, they can't risk pricing this thing so attractively that,
say, a corporate office might buy 80,000 steam machines and kid out their entire workforce,
all of whom will buy a total of goose egg games. Now, the steam deck was never in any real danger
of that happening, which is why it could be priced as aggressively as it was. But the same can't be
said for the steam machine. So, with that in mind, what are we getting for our $700 or at most $800
if the market goes completely wackadoodle? Man, steam wants rocks. I know, right? Of course,
that's not what we're evaluating today. Nope. Today, we're looking at the performance. So,
we'll start up by firing up Hades 2. You're only getting like 200 to 300 frames, Linus. It's kind
of embarrassing. Okay, well, we always knew that games like this were going to play just fine on
the steam machine. What we really care about is how something more challenging is going to run.
And our plan was to go with the game that seems poised to win Game of the Year, Expedition 33.
But unfortunately, it's running in the steam deck profile with no way for us to reconfigure it on
SteamOS right now. So, Cyberpunk, I guess. It's the crisis of the 2020s. This looks pretty good.
Yeah, it looks pretty, but Cyberpunk at 4k medium details would look pretty. I can tell you as the
person holding the controller, though, 45 FPS is not great for driving. But what's up with that?
Valve said that out of the gate, the steam machine should be capable of running pretty much any game
on Steam at 4k with FSR, about 60 FPS. Well, that's where there's clearly some tuning for them to do.
Let's see if we can get to 60. Why don't we start with a low rather than a medium preset,
and then let's change our FSR to Performance, which renders the game at an even lower resolution
before upscaling. Oh, hey, that looks better. That is above 60. That sounds pretty good.
Yeah, it still looks D's. There's a little bit of graininess. I mean, there's always a little bit
of graininess inside of a point. Yeah, that's true. You crank it, it's just kind of like a gritty,
grainy style. Yeah, that was on purpose, right? Yeah. Yeah. Yeah. Night City. This is very good.
It's not the highest I've ever seen cyberpunk look, but if you have complaints about this,
you're very picky. But who's to say that gamers shouldn't be discerning? While this looks fine
in a vacuum, it's only as good as how it stacks up to the competition. How does it look next to,
say, a PlayStation 5? What about second 4k display? Normally, we'd have to have multiple
circuits to run two PCs, but the steam machine is going to be such a low powered thing that we can
have two TVs, a PlayStation, and a computer all in one. That's actually a pretty good point. The
expectations for running something in your living room are a little bit different than, you know,
a dedicated battle station of a gaming PC. Being power efficient is definitely a plus. We're not
in quite the same spot, but this is enough to give us an idea of how these systems will compare,
both in terms of performance and in terms of image quality. It's funny. I think I'm actually
running a touch sharper than you. Way sharper. I think I have better lighting. Your lighting.
Details are better than mine. Is definitely better. But if I were to pick one, I actually think I would
pick that. I was going to say, I'd probably pick the PlayStation. Interesting. You're in performance
mode right now, right? Yes. Which means you're getting about 60 FPS, which is about the same as
what I'm getting. Either way, though, there's no clear winner. There's no obvious winner, which
tells us that as long as they're reasonably within range of a PlayStation 5 on price, they're reasonably
within range on performance. 100%. Here, do you want to try? Yeah. Just your inputs feel looser
just because of the v-sync. Also, that's a better controller than this. I'm sorry. The joysticks,
anyway. Yeah. The joysticks. The triggers on the DualSense are so cool. Yeah. Now that I'm on the
PlayStation 5, my level of detail at a distance is, ah, man, no, I don't know. Actually,
LOD might be similar. It's the lighting. Yeah. It's the lighting that makes a huge difference on
the PlayStation. The nice thing about the Steam Deck is because it's a PC, you can tweak it to
have the settings you want. That's true. And so, I find everyone's a little bit more sensitive to
different settings appearing in their graphics. And so, having control over that's really nice.
Like, you might not worry that much about jaggies, so then you can put that headroom somewhere else.
On PlayStation, it's either 60 or 30, baby. That's your choice. Yeah. Like, if you sit
farther from your TV, you could run that at 1080p if you really wanted to. Totally. So, bottom line,
Valve clearly has a couple of little details to polish up, but they have a few months to do it,
and they've also made it very clear that they feel there is more juice to be squeezed from the
hardware from a performance standpoint as well, with their custom drivers for AMD Radeon cards,
not to mention deep integration with SteamOS, which we can't count on until we get the real
Steam machine in our hands, not this Frankenstein's monster, but even based on what we've seen so
far, at this performance level, at this price, with this level of flexibility, not to mention that
it's really small and damn near dead silent, I think it looks like a pretty compelling value.
And according to Valve, the market for this box might be bigger than you would think.
They estimate that the Steam machine will be more powerful than what 70% of Steam users currently
have. That doesn't necessarily translate to something that 70% of users would be interested
in purchasing, but it does mean that it's almost certain that the Steam machine will find an audience,
even if it does cost more than we estimate. I just hope that it doesn't cost too much,
or if it does cost too much, I hope it doesn't succeed too much because I'd love for Valve to
just say, oh, we didn't sell enough of these. You know what, screw it. Let's just upend the living
room console, not to mention the entry level workstation space. Like, look at the way the Steam
deck seems to have lit a fire under Nintendo's lethargic butt. I love Valve as a disrupter,
and I also love our sponsor. If you guys want more Steam machine content, get subscribed,
as we have more on the way, but in the meantime, you should check out either of our recent Valve
hardware coverage, or hey, maybe have about the time we deep dived into the state of SteamOS on
non-Valve hardware. SteamOS is likely to end up far more important than the Steam deck and the Steam
machine combined.