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 midspec pre-built gaming PC for
$1,000. 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, I will eat an entire
portal cake on the WAN Show. What is a portal cake?
>> You don't remember the cake is 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. Cuz 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 semicustom 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
58400F. 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
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Now we just put our equivalent CPU in there. And
immediately we're completely off the rails with the ASRock B650M-H
M.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 JEX speed RAM like this
16 gig kit from Crucial, but what we do know is that they've chosen compact SOD
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 5600
mega transfers per second. 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 semicustom 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 canceling
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, [music] 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
toerformance 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 ltdstore.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 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. Ah,
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 Mari Povit.
>> 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 [music] 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 [music] now and broad availability of the Steam Machine, any
given part of it could easily face cost increases due to [music] 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 W anyway. And
powering it, this CIC Focus GX 550. 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 W. 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 share of the systems power. And we know that it will come with 8 GB 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,
[clears throat] 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 Gamester
as our standin. It's a high quality wireless controller with TMR sticks that
comes with its own charging dock. All for 56 bucks. But uh the box is missing
its dongle. So instead, we're going with the winner of the ultimate controller
showdown from last year, the Easy 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 >> Mhm. >> from the cheapest sources,
>> Mhm. >> which I would like to. >> And let's say we add 50 bucks for a
case, >> right? >> We're looking at just over $600.
>> Oh, well, that's great news. I mean, it's Steam OS, so there's no Windows
tax. So, $5.99. >> 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. >> 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 a hundred 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 $7.99 either. Or
maybe I would. Chatting with some industry sources, it's estimated that
there is as little as 10% net profit in
PC parts, which would put our estimated
cost between $700 and $750.
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. 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 normaly. 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 PCiness 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
Game 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 kit 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, Steamos rocks.
>> I know, right? Of course, that's not what we're
evaluating today. Nope. >> [music] >> 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. That's kind of embarrassing. >> Okay. Well, we always knew that games
like this were going to play just fine on this Steam machine. What we really
care about is how something more challenging is going to run. [music] 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 Steam
OS 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 it. Mhm.
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. Okay. >> That's pretty good.
>> Yeah, it still looks decent. >> There's a little bit of graininess.
>> I mean, there's always a little bit of graininess in Cyberpunk. >> 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. [laughter]
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 like
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. Details are better. >> Is definitely better.
>> But I 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? 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 VSYNC. Also, that's a better controller than this. I'm sorry. The
joysticks anyway. the joysticks, the the
triggers on the Dual Sense are so cool. Yeah. Now that I'm on the PlayStation 5,
my level of detail at a distance is Oh, 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. 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 jaggy. So then you can put that headroom somewhere else. On
PlayStation it's either 60 or 30, baby. That's that's your choice.
>> Yeah. Like if you sit farther from your TV, you could run that at 1080p if you
really wanted. >> 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 Steam OS, 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 disruptor. And I also love
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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 how about the time we deep [music] dived into the state of Steam OS
on non Valve hardware. Steam OS is likely to end up far more important than
the Steam Deck and the Steam Machine combined.