Microsoft Studios Exec Cautions Valve on Launching Hardware

[hermes]

He's failing to see that the hardware is secondary. As long as whatever box can run the inevitable Steambuntu distro, there will be Steam, even if it's not on a Valve Piston(tm). Have you met my friends Zotac and Foxconn ( http://www.newegg.com/Barebone-Mini-Computers/Category/ID-3 )? Zotac even makes VESA mounting brackets that their boxes can rest in, nestled cleanly out of sight behind your TV. This is OUYA's strength as well. With a sufficiently viable ecosystem, such as Steam, or Android, you don't need to be in every living room on the planet.

Hardware is less than secondary. Are we forgetting the RROD so fast? If anyone is able to give cautionary tales about not focusing on hardware enough, its Microsoft.

OUYA's supposed strength is the same as Android strength (its open system), and I am not sure that is a great strength. There is a reason the Android store is terribly lacking in content (such as games) when compared to the Apple store.

A lot of people here seems to be taking this as some sort of threat or scared comment when its not. This guy was (and still is) an important executive of both XBox and Playstation during their prime. If he wanted to give any advice, I would take notes. And he is not saying anything that is not entirely truth: the current market for consoles is extremely competitive... bigger companies have tried to enter the hardware market and failed. Remember Apple? Or Sega? Or Atari? Neither of them would have succeeded in the modern market. How many knew the pipin, the XEGS or the justifier? You need a lot more than deep pockets an a brand to succeed; you need a distribution department, a support department, a licencing department, a marketing department, a tools development department, a tools development support department; for multiple languages and multiple regions.

I am not saying Valve is not able to pull it off, but if they disregard those facts and go ahead based only on hubris and hoping for things to work out, they have already loose.

 

[NKRevan]

It always amuses me how people go into raging fanboi mode when anything concerns Valve.

The MS guy made a valid point. Screaming him down just because he happens to work for Microsoft is not going to change that. Entering the console space is a HUGE deal, even for a successful company like Valve. I have no doubt they have the possibility to pull it off, but it's not a guaranteed success story like oh so many die-hard Valve fans are trying to convince themselves.

Valve is a great company, and they can do great things. But they have had struggles in the past and they will have struggles again. Just because someone is pointing out that this is a risk, even for Valve, people shouldn't go up in arms against him.

 

[Yellowfish]

"Xbox Live as a foundation, the reach we have and the experience we deliver is a great place to build on."

I really don't see how XBL is better than Steam. I mean, community matters aside (both have their share of stupid people), Steam is a better place for indie developers to publish their games, it's free, and it doesn't have any ads. Also, Steam is a full-fledged digital distribution platform while XBL only offers a modest selection of indie games. If you can find these games amidst all the ads, that is.
Also, many people use XBL not because they like it, but because it is basically imposed on them by Microsoft. It comes with the console, and the functionality of said console is crippled without it. Overall XBL isn't a good service. If it was on PC, it would probably be loathed by the gamers and shunned by the developers. Oh wait, there IS a PC version of Xbox Live. It's called Games for Windows Live and it IS loathed by the gamers and shunned by the developers. Case in point.

Blimey, I bet this post makes me look like the president of Gaben's fan club.

 

[The_Great_Galendo]

Here we have a private company run by a man who has his finger on the pulse of gaming and has been able to predict trends in the market well in advance to them happening. You don't need these massive supply chains and distribution models when you make money hand-over-fist with an online store that has such a massive market share it might as well be a monopoly.

Microsoft should be scared of this because it has the potential to be a runaway success. Imagine a Steam/Linux system that eventually develops its own Word, Spreadsheet, Photoshop, Movie-maker software.

I'm going to go with this interpretation, albeit somewhat more cautiously. Will a hypothetical Steam Box make a significant dent in Windows' marketshare? Not unless Valve can convince the corporate world to adopt the platform, and somehow I don't see companies racing to buy their employees dedicated gaming-capable rigs, even if they can also run Word, Excel, etc. But I can easily imagine some fraction of personal computers not being replaced if the Steam Box can also function as a passable desktop, so the damage to Windows, though probably minor, will not be nonexistent.

I figure Microsoft would know all about a Software Giant entering the Console Market with hardware built to run and distribute games through a lightweight frontend operating system, internet integration, and a PC-development mindset. After all, they managed to pull it off back in 2001 with the DirectX Box.

Yeah, this is where I sense most of Microsoft's fear coming from. The Steam Box would be a direct competitor to the Xbox, and despite what they may publicly say, pretty much no company actually wants serious competition to enter its market.

 

[Jamous]

It'll be interesting to see how well this does; especially considering the other stuff on the Horizon (the new console gen, Ouya etc.). All the best to Valve though. I've been happy with most of their moves so far.

 

[Smolderin]

Well well...this almost sounds like a very subtle, indirect threat....which means Microsoft fears them. As well they should be, this is Valve were talking about. Competition will be good for Microsoft.

 

[FFP2]

I really think Valve will fail.

Apart from the million or so fanboys that worship anything Valve related, I really don't see people owning consoles from the Big Three (PS, MS, 'Tendo) buying this.

 

[Steve the Pocket]

I hope Valve really breaks into the console market and takes it by storm. We need something better than sequel after sequel.

I fail to see how (A) the Xbox game market is nothing but "sequel after sequel", (B) how it would be Microsoft's fault even if it were, and (C) how Valve would magically stop that from happening. Other than low-budget indie games, there's very little on Steam that's not already available on consoles.

Most people on Xbox Live make me cringe. I can only list a few decent people I met that didn't go crazy when they lost a game. I think this has more to do with terrible moderation on Microsoft's part. If the users knew the consequences of behaving in such a way they either wouldn't do it or get banned. I really had better experiences with Steam's users in that respect. Just to point out I'm not generalizing any user base since this can partially be the fault of the company itself.

Steam doesn't moderate shit. It probably has a lot more to do with which games you play and what servers you play them on (nearly all of Steam's games use private servers, which often are moderated by their owners). Back in its heyday, Counter-Strike was just as much a hotbed of whiny, perpetually-angry dipshits as Halo and Call of Duty would eventually become. Left 4 Dead 2 is full of straight-up trolls and griefers nowadays. And Dota 2 is likely to continue the tradition of its predecessor of having the most vile, vitriolic players of any game ever unless Valve has some really brilliant ideas of how to combat it.

 

[Mourne]

I'm going to look at this article with a slightly-more objective standpoint. Microsoft executive giving Valve a fair warning that it is in fact difficult to get into the console market (many living rooms contain an Xbox, Playstation, or Nintendo systems [or various mixtures of the three]). Valve has to create a console, and then be able to distribute it enough to make a profit. Another difficulty is the fact that it will be using the Linux OS, and so I am interested to see how the compatibility for games would develop.

On the Steam side, I love what Valve is doing and find the goal to be admirable. I have hopes that the Steam Box will be a definite competitor in the market. If I had to guess though, I feel there is a large possibility that the Steam Box could start off like Steam. Horrid at first (imo), but after having time to develop, will become awesome. But also, Valve is a tad more experienced than they were at the time of the creation of Steam.

We'll see, but I think if done right, Valve will do really good.

 

[Lucane]

Even if this bombs, Valve will be fine.

However, Valve's track record suggests that they aren't just doing this on a whim, they've put a lot of time and effort into ensuring that this will be a success. And I think Microsoft know that Valve are likely going to present themselves as a very credible thread.

On the bright side, we already know they'll only ever get to making two generations of them.

 

[weirdee]

Is anybody detecting way more negative undertones than I'm getting? It's just a guy saying market's tough, be ready.

ofc that's redundant when history has made this obvious but sometimes companies underestimate the risks

Valve has the best chance though since I don't really see their service folding any time soon. They also got their own fancy pants labs and even with the freeform development they seem to be very accountable for what they do, and the people they hire are screened extensively for self motivation, so this new age will bring more valuable information about what does and doesn't work, if anything.

 

[Andy Shandy]

While Harrison's points may very well be valid, I think if anyone can enter the hardware business, then it is Valve.

I think you don't have a clue what you're talking about.

They're pushing a digital sales only model. Exactly who the hell is gonna carry these machines? No game store in America would want one, as they can't sell software for it.

Where does it say that it will be digital only? As far as I'm aware, while digital downloads will inevitably be a big part of any Valve hardware, I'm sure that they'll still allow people to use their store bought games for it.

Also consider that, at least in the UK, you can go into a GAME store and buy Steam credit if you wanted means that I don't particularly see why they wouldn't sell it.

 

[Smolderin]

Well well...this almost sounds like a very subtle, indirect threat....which means Microsoft fears them. As well they should be, this is Valve were talking about. Competition will be good for Microsoft.

Yes, in the same way "Caution, Bears will eat you", means that the people who made the sign are scared of your awesome bear-taming.

Not sure if sarcasm or agreeing with me...the example you provided was a tad vague...

*insert that one image macro with Fry from Futurama going "Not sure if *phrase* or *phrase*

 

[J Tyran]

Valve wont have much of a problem selling this as long as they allow users to build their own "Steam box". If people can build their own machine and get assess to the particular distro Valve are using it will sell itself. The pre-built machines then are suitable for the people that pay over the odds for PCs like Alienware anyway.

 

[Smolderin]

Well lets think. Do they wanr you because they're scared of whatyou will do to the bears? or are they scared of what the bears will do to you?

See, I was mocking your idea that people give warnings because they're scared of the person they're warning. Its an insane form of rationalisation, which I pointed out by my example.

Ah, I got ya. That all said and explained and your stance on my statement verified, I vehemently disagree with your retort. Nothing else more to say than that really.

Erm...have a pleasant afternoon?

 

[gigastar]

I think one of the issues raised with W8 was that Microsoft really could stop users from installing their own programs.

They could, but they won't try because they're not colossally stupid.

How "colossally stupid" are we talking? Keeping in mind that theese are the same people who insist that GfWL is a good thing for gamers, who keep running the overpriced piece of fetid shit we refer to as Xbox Live and choke inde developers who want to release a patch for thier game on the XBLA.

 

[gigastar]

While Harrison's points may very well be valid, I think if anyone can enter the hardware business, then it is Valve.

I think you don't have a clue what you're talking about.

They're pushing a digital sales only model. Exactly who the hell is gonna carry these machines? No game store in America would want one, as they can't sell software for it.

Alot of theese PC manufacturers support direct delivery.

I suppose PC speciality stores would stock them too. I mean, no reason not to.

And then theres always Amazon, whom will jump at every opportunity to draw buisness from retail stores.

 

[CaptainKoala]

Don't listen to them, Valve.

The console market (Sony, Microsoft, Nintendo) for the past 3 generations has been so focused on one-upping each other that there has been little innovation for years. Valve has the unique opportunity to go into the market with the goal to make consoles better rather than just trying to sell slightly better than Sony or Microsoft.

I can't find the exact quote anywhere but Gabe Newell hit it right on the nose. [I'm paraphrasing] "If you make something that's great, people will adopt it no problem. But if you make something that sucks, no amount of money spent on marketing is going to change that, and nobody will buy it."

 

[DrOswald]

While Harrison's points may very well be valid, I think if anyone can enter the hardware business, then it is Valve.

I think you don't have a clue what you're talking about.

They're pushing a digital sales only model. Exactly who the hell is gonna carry these machines? No game store in America would want one, as they can't sell software for it.

Walmart, Best Buy, Costco, and anyone else who deals in electronics but whose business model does not revolve around software sales. More importantly online retailers like Amazon would be more than happy to distribute this hardware. In fact, the only people who would not want to sell this are dedicated game stores, and you don't need the blessing of Gamestop to succeed in the video game business.

Valve is uniquely suited to enter the hardware business. They are a highly trusted company, which will help greatly with initial sales. They have more than enough money to make this a reality. They have an excellent track record of innovation, And they have an amazing track record for third party support on their own distribution platform.

As far as the statements of Phil Harrison, they seem to me like a calculated attempt to erode public confidence in Valves ability to enter the market. A very old and reliable business practice. The only problem is that the vast majority of the interested public trusts Valve a hell of lot more than Microsoft. It ends up making Microsoft look bad, like it is afraid of the competition.

 

[sneakypenguin]

Valve would have a tough time creating a successful console. A $500+ console running a variant of a OS that isn't majorly supported is a tough sell. Especially since anyone could then just take the specs and build their own for cheaper and cut out the middle man.

To make it a success valve would have to lock something down, or offer some innovation IE VR tech or the like. making a linux PC putting it in a cute tiny form factor with some sort of gaming overlay on the OS isn't enough. Plus the overhead for the manufacturing, support staff, marketing, distribution would deeply cut into any profit from this.

There will be a market for it but it should be pretty niche, probably already overlapping with existing customers. Sneakypenguin makes note on this day, in 2 years there will still not be a steambox in any mainstream retail outlet and if it comes to light it will remain a niche product.