Is Valve's Steam Machine a Viable Competitor to the PlayStation 4 and Xbox One?

Is Valve's Steam Machine a Viable Competitor to the PlayStation 4 and Xbox One?

With the launch of the next generation of video game consoles right around the corner, consumers and industry analysts alike are anxious to know which system will take the early lead. Sony's PlayStation 4 launches this week on Thursday, Nov. 15, and just a week later on Nov. 22 Microsoft's Xbox One is slated to hit shelves. Both systems are primed to take advantage of the busy holiday shopping season and are expected to drive the entire video game industry higher in the coming months.

Those who have been paying close attention have no doubt heard of a third entrant into the impending console war, however, and no, I am not referring to Nintendo! Valve, acclaimed developer of the "Half-Life" and "Portal" franchises as well as the digital distribution platform known as Steam recently announced that it was beta testing a device called the Steam Machine. The device is expected to release sometime in 2014.

What Is It?

Valve is taking a unique approach to consoles compared to what Sony, Microsoft, and even Nintendo have traditionally done. The Steam Machine is being developed as an open box, meaning that consumers will have the ability to upgrade various parts of the device to increase power and longevity. This is in direct contrast to the three existing console manufacturers, which have all chosen to produce smaller complete products that emphasize cost and convenience first and foremost.

In essence, Valve is trying to revolutionize the video game console. The company wants to meld the power of high-end PC's with the living room experience. It is also aiming to give consumers a great deal of choice in the process. The company acknowledged in a recent press release that many consumers shy away from the PC platform to play games because it inherently requires a deeper knowledge of complex hardware.

To alleviate some of these concerns, Valve is reportedly working with multiple partners to develop numerous versions of the Steam Machine, allowing each version's technical specifications to appeal to different levels of gamers. As such, the system is shaping up to be very much unlike anything console gamers have ever seen in the living room!

The games
No matter how high tech or revolutionary a video game system is, the success or failure of a console will inevitably come down to the available games. In this regard, much is still unknown about Valve's Steam Machine. What is known is that the company, itself a top-tier third-party developer, will not make games exclusively for the Steam Machine. This means that the long-awaited Half-Life 3 will not be exclusive to Valve's hardware, no matter how much hype that would no doubt create for the device.

Valve confirmed that over 3,000 games on Steam would be available for the beta test of the Steam Machine, however, which is happening later this year.

The controller
The more that is learned about the Steam Machine, the more apparent it becomes that Valve is choosing to win over the notoriously fickle PC gaming crowd first. This is probably most apparent in the design of the console's controller, which seems to be a combination of quintessential Xbox controller and a traditional mouse and keyboard setup.

Valve wants to offer the fit, form, and convenience of a game pad without sacrificing the accuracy of a keyboard and mouse. Accordingly, the Steam Machine controller will have a touch surface similar to the trackpad on a mouse, preserving accuracy while maintaining conformability. It is a setup that could potentially appeal to both PC gamers and console gamers alike.

The console war
If the company can successfully capture the elusive PC crowd with the Steam Machine, it may then be ready to challenge Sony and Microsoft on a large scale. To properly determine whether that is even possible, we still need to know more about the console, including who exactly is building the various versions of the systems, the available library of games, and the all important price points.

What is clear is that the Steam Machine is shaping up to be something quite different, and that is scary to competitors in and of itself. In many ways it is a game developer's dream machine as it takes the unbridled power and upgradability of PC gaming and combines them with the accessibility of traditional consoles. Whether that admittedly cool concept will resonate well with consumers who just want to play games is another story.

One thing is for sure, though: Sony and Microsoft can't be too pleased. On the eve of their next-generation console launches, Valve is attempting to turn the console market on its head. The real danger of the Steam Machine is its almost unlimited potential. If it can be upgraded consistently, it would essentially mean that Valve's console would always be the most powerful gaming device on the market. Unless Sony and Microsoft can evolve, their gaming units could face extinction in the not too distant future.

No Pitch

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Philip Saglimbeni has no position in any stocks mentioned. The Motley Fool owns shares of Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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