Report: Valve preparing to jump into console business

The Seattle region is already a nexus for the video-game console industry, as the home of both Microsoft’s Xbox division and Nintendo of America, located within a few blocks of one another in Redmond. And it sounds like we might soon be getting a third console company.

Quoting anonymous sources, The Verge reports tonight that Valve is developing a new “Steam Box” platform that would do for living room consoles what Android has done for mobile phones — creating an open environment for a variety of manufacturers to build living room devices based on Valve’s specs, with the company’s Steam distribution platform in the middle of the whole thing.

See the story by Joshua Topolsky for more details, including the possibility of controllers with swappable components, and realtime biometric feedback incorporated into gameplay.

Gabe Newell, who heads up the Bellevue-based company, recently hinted at the possibility of such a project in an interview with Penny Arcade.

“Well, if we have to sell hardware we will,” Newell said in that piece. ”We have no reason to believe we’re any good at it, it’s more we think that we need to continue to have innovation and if the only way to get these kind of projects started is by us going and developing and selling the hardware directly then that’s what we’ll do.”

Previously on GeekWire: How Valve experiments with the economics of video games.

  • Guest

    We would like to see this come to fruition. The so-called “Steam Box” could be the open alternative that would parry the TV we expect Apple to introduce next Wednesday.

  • Hubert Hammack

    LOL! Can you say DOA! This is no different than the Alienware X51. The cheapest version of that hardware is $700 and has nowhere near the specs this thing is rumored to have. This has no hope of competing with consoles. It’s just another PC they’re trying to jam in a console like box.

  • Joe the coder

    Well, stranger things have happened so I’m not going to call this DOA.  But (a rather large “But” at that) this is a very risky venture.  I’m not sure how much cash this will take to get off the ground but I bet it’s significantly larger than Valve’s 2011 gross.  Maybe they have a clever bootstrap strategy.  Based on the early reports, it feels like a bet-the-company strategy.  Not so good for an outfit that has had a lot of execution issues in the past.

  • Guest

    As a part of the original Xbox development, we explored the possibility of it being an OEM product rather than a product that MS would sell itself.  At the time we had conversations with OEMs in the US as well as worldwide.  The was no interest.  Why?  Because there was no way for the OEM to participate in the retail SW revenue stream (which as we all know,is where all the real money is made).

    Now, with the advent of digital distribution, this objection is much more easily overcome.  Most OEMs already operate their own online stores for selling post-purchase software, integrating steam into that mix would not be that hard.

    In addition, given what MS plans to do with the windows 8 store and the Xbox live tile in the interface will present fundamental challenges to steam’s current business model.

    But thee are unanswered questions.  For example, what OS will the steam box run?  Will it just be an app or skin over windows or OSX?  Or something new?  How will licensing of accessories be handled?  How will revenue be shared with OEMs?  And so on.

    The assertion that this is a play to counter Apple is mistaken.  This is targeted at countering MS and maintaining relevance in a Win8 world where MS is attempting what Apple has already succeeded at on iOS and OSX, locking down app/game sales exclusively to the MS store.

    Should be interesting to see how this all unfolds.

  • Guest

    As a part of the original Xbox development, we explored the possibility of it being an OEM product rather than a product that MS would sell itself.  At the time we had conversations with OEMs in the US as well as worldwide.  The was no interest.  Why?  Because there was no way for the OEM to participate in the retail SW revenue stream (which as we all know,is where all the real money is made).

    Now, with the advent of digital distribution, this objection is much more easily overcome.  Most OEMs already operate their own online stores for selling post-purchase software, integrating steam into that mix would not be that hard.

    In addition, given what MS plans to do with the windows 8 store and the Xbox live tile in the interface will present fundamental challenges to steam’s current business model.

    But thee are unanswered questions.  For example, what OS will the steam box run?  Will it just be an app or skin over windows or OSX?  Or something new?  How will licensing of accessories be handled?  How will revenue be shared with OEMs?  And so on.

    The assertion that this is a play to counter Apple is mistaken.  This is targeted at countering MS and maintaining relevance in a Win8 world where MS is attempting what Apple has already succeeded at on iOS and OSX, locking down app/game sales exclusively to the MS store.

    Should be interesting to see how this all unfolds.

  • Guest

    And let’s not forget the Phantom console. Same strategy, never made it to market.

  • Guest

    And let’s not forget the Phantom console. Same strategy, never made it to market.