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Recently, I visited Valve to check out their upcoming Steam machine, a gaming

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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. But

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

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the price. And that's a pretty important piece because when you look at the

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discussion online, people love this thing because they think it's going to

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be a $500 console killer or they hate it

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because they think it's going to be yet another midspec pre-built gaming PC for

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$1,000. But which one is it? Valve won't tell us

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yet for some good reasons that we'll get to later. But what we do have is enough

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information and enough lines to read between that I believe we can make such

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an accurate guess that if we're off by more than $60, I will eat an entire

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portal cake on the WAN Show. What is a portal cake?

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

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>> That's true this time. >> Okay. Well, because I counted on you

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guys to help with the work, you are going to help me eat it.

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>> Gladly. We win as a team and we die as a team here. But I don't think that's

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going to happen because our theory is solid and it starts with the comparison

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system behind me. This approximation will both give us a sense for what a DIY

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steam machine would cost today as well as give us a sense of how it might

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perform. Cuz Valve, they ain't no fools.

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They care a lot about the perceived value of the experience of using the

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steam machine, not just the raw specs.

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Let's start with their CPU then, or rather not quite their CPU. See, the

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Steam Machine uses a semicustom six core chip from AMD. And while we would have

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loved to use the near identical Ryzen 5

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7540U, we don't have a custom motherboard to

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solder it to. So, we're going to be stuck with the socketed desktop Ryzen

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58400F. To get our performance estimate a little

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closer though, we're going to tweak its power and clock frequency to be closer

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to Valve's baby. About like so. Now, we

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just need to save and quit. It's not working. Oh, wait. I know what

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the problem is. We didn't configure our Segway to our sponsor, UG Green. Their

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beginner friendly Naz offers up to 120 TB of storage. It syncs smoothly with

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Plus NAS in the video description.

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Now we just put our equivalent CPU in there. And

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immediately we're completely off the rails with the ASRock B650M-H

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M.2 Plus. A motherboard that other than

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being a motherboard is as different as possible from the one inside the Steam

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machine. For starters, it's much larger with robust power delivery and a

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plethora of expansion ports and slots that just aren't needed in the GameCube,

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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

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expensive than the one that Valve is using. However, the flip side is that

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creating a custom motherboard that ain't free and Valve is going to have to make

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up those costs somewhere. perhaps by cheaping out on the RAM. Now,

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we don't know for sure that Valve will select generic JEX speed RAM like this

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16 gig kit from Crucial, but what we do know is that they've chosen compact SOD

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dim modules in order to save space, which could cost them a little bit

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extra. We also know that the 7540U

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is rated for a maximum speed of 5600

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mega transfers per second. And unless Valve went more custom than they let on,

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that's probably about as fast as their semi-custom silicon will go. But that

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raises a big question. How custom did they go? What does semicustom actually

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mean? As it turns out, it means pretty much off the shelf, but with some tuning

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to the firmware, power profile, and drivers. And that choice tells us a fair

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bit. Actually, think back to the recent news about Xbox reportedly canceling

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their handheld. Allegedly, that was at least partially due to the fact that AMD

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wouldn't commit to a custom SOC unless Microsoft could guarantee at least 10

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million units sold. So, [music] what I'm hearing is Valve is projecting enough

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sales to bother doing this project at all and probably enough for AMD to give

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them a measurable price break, but not enough to sell 10 million Steam

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machines. Because if that were the case, they might have chosen something more

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custom. A strategy that clearly contributed to the incredible price

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toerformance ratio of their handheld console, the Steam Deck. There's any

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number of different ways to interpret this. I mean, Valve has been burned on

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Steam machines before. Are they just playing it safe this time, or do they

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just think the market for a Steam living room console that's also a computer is

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relatively small? I mean, to you and me, 10 million units is huge. I'd be stoked

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to sell 10 million units of anything, like the new transparent screwdriver

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from ltdstore.com. But when we compare that number to

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console sales, yeah, it is tiny. Even

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infamous failures like the PS Vita and the Wii U sold significantly more than

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that. So, to me, this reinforces the few

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hints that Valve has given with respect to pricing. What it tells us is that

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while Valve could look for every possible lever to drive down price, they

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just aren't that interested in betting big on upending the console market. It

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seems like they're more interested in replicating the Steam Deck success by

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giving gamers more ways to play Steam games and putting a reference platform

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out there for other hardware manufacturers to chase and who knows,

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maybe install Steam OS on. Ah,

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with that in mind, then it's not in Valve's best interest to monopolize the

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market. They want to drive competition in it, which unfortunately means they

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aren't likely to slim down their margins and hit a Christmas listable $500

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mainstream console price point. I actually asked Valve about that point

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blank. And while they didn't say no,

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they also didn't say no,

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which is kind of a downer. And we've yet to complete our descent. As I install

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our Kingston NV3 with 500 gigs of storage, I can't help but be reminded of

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the rising costs of both the NAND flash

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storage chips that are at the heart of every SSD and every type of memory right

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now. Like both of them are more out of control than a pre-teen on Mari Povit.

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>> Catch me outside. >> And even though it's not intuitive, this

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

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sucking up all the available production. And guess what? It gets worse. While US

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tariffs seem to be easing [music] off a little, there is no denying that global

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trade friction and protectionism are hot trends right now. And in just the few

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months between [music] now and broad availability of the Steam Machine, any

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given part of it could easily face cost increases due to [music] these factors.

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

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be limiting our CPU to 30 W anyway. And

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powering it, this CIC Focus GX 550. Not

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because the steam machine will have a 550 watt power supply, but because where

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the heck am I supposed to find a desktop power supply that is both high quality

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and also 300 W. Now, it's time to talk about what is arguably the most

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important piece of any gaming PC, the GPU. What we know is that the Steam

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Machine will have a semi-custom AMD RDNA3 GPU. We know it will consume the

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lion share of the systems power. And we know that it will come with 8 GB of

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dedicated GDDR6 VRAM. That actually

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lines up pretty closely with another product in AMD's lineup, the Radeon

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RX7600M. Sadly though, the M once again stands

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for mobile. So, we couldn't find that GPU in a form factor that we could plug

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

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equivalent. This could be a problem. The most obvious choice would of course be

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the full-sized RX7600, right? I mean, it's got the same dang numbers in the

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product name, so it must perform the dang same then, right? Wrong. It is much

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faster in most benchmarks. And if we want a GPU with similar performance, we

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end up with the RX6600, but that is a full generation older,

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which means that it might not have the best support for AMD's latest features.

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And depending on the games we run and how much ray traced lighting they use,

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[clears throat] its performance profile is not going to be the same either. But what it does

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have is the same CU count and very similar boost clocks. And even the power

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rating is very similar. So I guess we go

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with this. Which brings us to pricing. David, where are we at?

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>> I would tell you that, but we're not done yet. You fell victim to one of the

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

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Machine will come with a pretty fancy one. >> Oh, I chose the Cyclone 2 from Gamester

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as our standin. It's a high quality wireless controller with TMR sticks that

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comes with its own charging dock. All for 56 bucks. But uh the box is missing

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its dongle. So instead, we're going with the winner of the ultimate controller

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showdown from last year, the Easy SMX20. You love this controller.

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>> Okay, but that's still the same price anyway. >> It's close enough that our calculations

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are still correct. Okay. So, what are our calculations? >> Well, if we were to build this machine

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using the lowest historical pricing >> Mhm. >> from the cheapest sources,

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>> Mhm. >> which I would like to. >> And let's say we add 50 bucks for a

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case, >> right? >> We're looking at just over $600.

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>> Oh, well, that's great news. I mean, it's Steam OS, so there's no Windows

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tax. So, $5.99. >> I was not done. If we build it today in

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the current market conditions from the cheapest sources, we're looking at close

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to $900. >> Oh.

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But we don't have to buy these exact parts. >> No. If we're deal hunters and we don't

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mind giving up some of the bells and whistles and some of the name brands, it would save you about a hundred bucks

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without giving up any performance. >> Okay. But that's retail pricing that's

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got some margin built into it. So, I don't think I'd say $7.99 either. Or

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maybe I would. Chatting with some industry sources, it's estimated that

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there is as little as 10% net profit in

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PC parts, which would put our estimated

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cost between $700 and $750.

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With that said, Valve benefits from a direct to consumer model, meaning that

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they get to take both the brand and retailer margins. And as we already

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acknowledged, we did overspend on a number of our components, including the

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power supply, the motherboard, and the case compared to what Valve would pay.

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With that said, in today's market, I still don't think they're going to get

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costs under $600 to $650. Meaning that

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the final question is, what kind of markup will Valve target on the Steam

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machine? Without being a fly on the wall in their boardroom, it's impossible to

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say for sure. All that Valve would tell us is that they want their hardware

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

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US. If there's no major changes in the market, it's probably above Valve's cost

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today. And there'll be some opportunity for them to improve their margins over

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the several year lifespan of their device as their initial investment gets

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paid off and hopefully RAM and SSD

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pricing returns to some kind of normaly. And if we factor in nice to haves like

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the dedicated antenna for up to four wireless Steam controllers, not to

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mention the controller itself, the Steam Machine presents a compelling value at

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that price without completely undercutting the market. And maybe this

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is the most important factor. It's kind of a funny number. I don't love this

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answer. And I'm sure I'm not the only one who's sitting here wishing that it

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was priced like a game console. I mean, who wouldn't want that affordable of a

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PC? But you see what I did just there? I

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just moved the goalpost. A big part of the reason I want this thing to be

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affordable so bad is because it is a PC

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with all the benefits of a PC. Like no

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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

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importantly, the ability to use it for all kinds of non-gaming applications.

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But it's exactly that PCiness that makes

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the console pricing model just not work for Valve. It would take a matter of

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minutes for me to grab my brand new Steam machine, install Windows and Epic

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Game Store on it and then never give a penny of ongoing revenue to Valve. So,

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coming back to that word sustainable, if they want their hardware business to

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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

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steam machines and kit out their entire workforce, all of whom will buy a total

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of Goose Egg Games. Now, the Steam Deck was

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never in any real danger of that happening, which is why it could be

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priced as aggressively as it was. But the same can't be said for the Steam

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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, Steamos rocks.

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>> I know, right? Of course, that's not what we're

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evaluating today. Nope. >> [music] >> Today we're looking at the performance.

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So we'll start up by firing up Hades 2. >> You're only getting like 200 to 300

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frames, Linus. That's kind of embarrassing. >> Okay. Well, we always knew that games

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like this were going to play just fine on this Steam machine. What we really

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care about is how something more challenging is going to run. [music] And

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our plan was to go with the game that seems poised to win game of the year,

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Expedition 33. But unfortunately, it's

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running in the Steam Deck profile with no way for us to reconfigure it on Steam

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OS right now. So, Cyberpunk, I guess

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>> 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

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can tell you as the person holding the controller, though,

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45 FPS is not great for driving it. Mhm.

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But what's up with that? Valve said that out of the gate, the Steam Machine

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should be capable of running pretty much any game on Steam at 4K with FSR about

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60 FPS. Well, that's where there's clearly some

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tuning for them to do. Let's see if we can get to 60. Why don't we start with a

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low rather than a medium preset and then let's change our FSR to performance,

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which renders the game at an even lower resolution before upscaling. Oh, hey,

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that looks better. >> That is above 60. Okay. >> That's pretty good.

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>> Yeah, it still looks decent. >> There's a little bit of graininess.

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>> I mean, there's always a little bit of graininess in Cyberpunk. >> Yeah, that's true.

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>> You crank it, it's just kind of like a gritty grainy style.

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>> Yeah, that was on purpose, right? >> Yeah. Yeah. >> Yeah.

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>> Night City. >> This is very good. [laughter]

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It's not the highest I've ever seen Cyberpunk look, but if you have

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complaints about this, you're very picky. >> But who's to say that gamers shouldn't

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be discerning? While this looks fine in a vacuum, it's only as good as how it

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stacks up to the competition. How does it look next to say a PlayStation 5?

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What about second 4K display? >> Normally, we'd have to have like

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multiple circuits to run two PCs, but the Steam Machine is going to be such a

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low powered thing that we can have two TVs, a PlayStation, and a computer all

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in one. >> That's actually a pretty good point. The expectations for running something in

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your living room are a little bit different than, you know, a dedicated

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battle station of a gaming PC. Being

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power efficient is definitely a plus. We're not in quite the same spot, but

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this is enough to give us an idea of how these systems will compare, both in

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

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actually running a touch sharper than you. >> Way sharper. I think I have better

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lighting. Details are better. >> Is definitely better.

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>> But I if I were to pick one, I actually think I would pick that.

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>> I was going to say I'd probably pick the PlayStation. >> Interesting.

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>> You're in performance mode right now, right? which means you're getting about 60 FPS, which is about the same as what

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

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winner, which tells us that as long as they're reasonably within range of a

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PlayStation 5 on price, they're reasonably within range on performance

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>> 100%. >> Here, do you want to try? Yeah. Just your inputs feel looser just because of

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the VSYNC. Also, that's a better controller than this. I'm sorry. The

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joysticks anyway. the joysticks, the the

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triggers on the Dual Sense are so cool. Yeah. Now that I'm on the PlayStation 5,

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my level of detail at a distance is Oh, man. No, I don't know. Actually, LOD

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might be similar. It's the lighting. >> Yeah, >> it's the lighting that makes a huge

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difference on the PlayStation. >> The nice thing about the Steam Deck is

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because it's a PC, you can tweak it to have the settings you want. So, I find

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everyone's a little bit more sensitive to different settings appearing in their

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graphics. And so having control over that's really nice. Like you might not

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worry that much about jaggy. So then you can put that headroom somewhere else. On

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PlayStation it's either 60 or 30, baby. That's that's your choice.

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>> Yeah. Like if you sit farther from your TV, you could run that at 1080p if you

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really wanted. >> Totally. >> So bottom line, Valve clearly has a

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couple of little details to polish up, but they have a few months to do it. And

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

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squeezed from the hardware from a performance standpoint as well with

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their custom drivers for AMD Radeon cards, not to mention deep integration

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with Steam OS, which we can't count on until we get the real Steam machine in

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our hands, not this Frankenstein's monster. But even based on what we've

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seen so far, at this performance level, at this price, with this level of

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flexibility, not to mention that it's really small and damn near dead silent,

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I think it looks like a pretty compelling value. And according to

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Valve, the market for this box might be bigger than you would think. They

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estimate that the Steam Machine will be more powerful than what 70% of Steam

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users currently have. That doesn't necessarily translate to something that

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70% of users would be interested in purchasing, but it does mean that it's

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almost certain that the Steam Machine will find an audience. Even if it does

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

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

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Valve to just say, "Oh, we didn't sell enough of these. You know what? Screw it. Let's just upend the living room

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console." Not to mention the entry-level workstation space. Like look at the way

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the Steam Deck seems to have lit a fire under Nintendo's lethargic butt. I love

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Valve as a disruptor. And I also love

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Machine content, get subscribed as we have more on the way. But in the

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meantime, you should check out either of our recent Valve hardware coverage. Or

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hey, maybe how about the time we deep [music] dived into the state of Steam OS

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on non Valve hardware. Steam OS is likely to end up far more important than

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the Steam Deck and the Steam Machine combined.