My initial reaction to this thing was a resounding "NO!". It just seemed like another touch-oriented device furthering my theory/tinfoil-hat-fear that the industry is waging a 'war on buttons' and eventually all we'll be left with is sloppy inaccurate touch controls with no tactile feedback.
After reading a couple of developers' accounts of the control, I'm a little less concerned about the trackpads despite having owned an Xperia play and finding that its touchpads/trackpads were practiacally useless for analog control. The button placement still concerns me, however. With the disclaimer that I (obviously) haven't tried it yet, here's where I still see huge problems:
1) Lack of tactile feedback: I know people are going on and on about "haptic feedback", but in my experience, haptic feedback just plain doesn't work. Mobile phones use "haptic feedback" for their virtual keyboards. Can any of you honestly say that when haptics are enabled that you actually feel the keys on your soft keyboard when you're typing? In my experience the phone just vibrates uselessly and maybe makes a "tick" sound through the speaker. I have a sinking feeling that the Steam controller will be more-or-less the same.
2) No D-Pad: I play a lot of 2-D platformers and oldschool games. As such, a proper D-Pad is important to me. The Xbox 360 controller had an atrocious D-Pad, but it was better than none at all. I find analog sticks too unresponsive to play games designed around 'digital' control. I worry that these touchpads will fare even worse given that now the element of proper tactile feedback has been (mostly) removed.
3) No (proper) face buttons: I'm aware that there's still shoulder buttons and two "underside" buttons, but the lack of face buttons for performing primary functions may make this contrroller cumbersome for use with games which require frequent and complex actions. It's likely a lot of player preference on this one, but I can't see myself being overly thrilled having to change up my muscle-memory and re-learn primary control elements that have been in place since the NES days at least. The trackpads are clickable, yes, but I see them being just about as much use as the "buttons" located underneath the analog sticks on the Playstation/Xbox360 controllers (read: not very.)
If I had a suggestion for Valve, it would be this: Change the right trackpad from one clickable region to 4, and 'simulate' the diamond face button configuration that most games use. Then, depending on how soft the trackpad's rubber is, make the center of those regions able to raise/lower from underneath the rubber to convert the trackpad to real face buttons when needed. The left pad could have a similar structure to turn it into a real D-Pad. As they are right now, the trackpad-to-button setup looks like a pain. Maybe this is too intricate to realistically implement, but it would be a hell of a lot better to actually create real tactile buttons on demand than to have some useless "haptic" vibrations.
I'll give this thing a chance, but I'm still not feeling warm and fuzzy about it.
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Tl;dr: Button placement is worrying, the controller needs a d-pad; haptic feedback as it's seen today in mobile devices is just a useless "rumble" feature that accomplishes nothing; wouldn't it be nice if the touchpad had 4 real buttons underneath the rubber that could raise up when real buttons are needed instead of just making the pad one large click target.