Why Microsoft and Sony Shouldn't Fear Steam OS Yet
Couldn't make it to the 2014 International Consumer Electronics Show? Never fear: The Fool was there to check out the tech and report back on who was there and what was new. With thousands of products in more than 15 categories, the next big thing was surely making its debut at the CES in Las Vegas.
Valve recently launched its own gaming hardware platform: the Steam Box, running Steam OS. Will the $500 gaming system be able to put a dent in the Xbox market?
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A full transcript follows the video.
Evan Niu: Hey, Fools, Evan Niu here, and I'm joined by Eric Bleeker. We're on the floor of CES 2014, and right behind us we have Valve and Steam; a lot of Steam boxes on display. They recently launched Steam OS -- pretty interesting stuff there, really getting into their own gaming hardware platform. What do you think, Eric?
Eric Bleeker: Yeah, Valve is a very innovative company. I wish it was public so I could buy it. Of the video-game companies, you look at what they've done with Steam; it's absolutely incredible. It's become the platform for distributing video games, well ahead of its time when you think about similar platforms that exist now.
Very much a forward-thinking company, but one of the areas you have to look at with Steam Boxes, and potential impact on the market, it starts at about $500. Those are the cheapest ones, for what is essentially a gaming PC in your living room. It's just a tough to imagine it making a big dent on the market.
You could say "Xbox starts at $500," but across a generation that price dramatically goes down. I don't think these have that same obsolescence curve. It's just a different model, when you're working with what essentially boils down to a PC.
As far as a Sony or a Microsoft , and how a Steam Box and a Steam OS might affect them, I think it will remain for the most part relatively a niche product. It appeals very well to the high end of gamers.
That being said, Valve is a pretty innovative company, and they could do some very sought-after games that the distribution only goes to Steam Box, or build an installed base that way, so they've got a couple tricks up their sleeve that I think could make this interesting.
Evan: Yeah, I'm going to agree with you on that one, because I think, like you said, Valve's real angle with Steam has always been about distribution. That was really where they hit big, was the distribution model.
They're the top dog in PC gaming distribution, so the hardware side of it ... it's kind of interesting, but it also might just be a side play, a hedge bet like, "Why not? Might as well. Maybe we do something, maybe we don't." Ultimately, I think they're still going to stay the market leader in PC games.
Eric: Yeah, and if they release the next Half-Life for a Steam Box, maybe I'll just end up buying one. There you have it, Valve. You've got me, if you just make the right move!
Niu: All right, Fools, that's it for Steam OS. For all the latest CES, check out Fool.com.
The article Why Microsoft and Sony Shouldn't Fear Steam OS Yet originally appeared on Fool.com.Eric Bleeker, CFA, and Evan Niu, CFA, have 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 don't 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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