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Brier Dudley offers a critical look at technology and business issues affecting the Northwest.

January 6, 2014 at 5:14 PM

CES 2014: Valve unveils Steam Machine lineup, $499 to $6,000

LAS VEGAS — It was a bold move by Bellevue’s Valve software to schedule its big press event at the Consumer Electronics Show at the exact same time as industry titan Sony.

But Valve brought more than enough gadgets to stand out.

A Steam Machine from Dell's Alienware. Image from Valve.

A Steam Machine from Dell’s Alienware. Image from Valve.

Valve today announced that 14 PC makers are building systems based on its Steam platform, which includes its Linux-based Steam operating system, a special game controller and high-performance hardware to run games that Valve and publishers distribute on the company’s Steam game network.

Steam Machine PCs will go on sale later this year with several manufacturers offering systems that start at $499, matching the price of Microsoft’s Xbox One console.

The pricing and breadth of designs suggests that Steam Machines have a chance of reaching mainstream buyers and not just hard-core PC gamers. Valve already has 65 million people using its Steam network to buy and play games for the PC, Linux and Mac platforms but this is the company’s first foray into hardware development since it was started by Microsoft veterans in 1996.

Backers of the new platform include Dell’s Alienware group and a dozen smaller PC brands that have a presence in the market for Windows-based gaming PCs. They include Zotac, iBuyPower, Gigabyte and Origin PC.

“It’s very impressive to have this many people signed up on a brand new OS,” said industry analyst Bob O’Donnell at Technalysis Research.

“It’s also somewhat of a reflection of the fact that the PC vendors are obviously in a tough spot these days. They’re looking for any options,” O’Donnell said, referring to PC makers looking beyond Microsoft’s Windows platform to newer operating systems offered by Google.

“That’s why a lot of them have actively pursued Android and why they’re so gung ho about Chrome. When you are in a difficult market, you are going to look at every opportunity you can,” he said.

Although Valve was built on the PC platform, it has been somewhat immune from the platform’s slowdown. In introducing the Steam Machines, co-founder Gabe Newell said the company’s had a great year with revenue up about 62 percent over 2012 and it’s “Dota 2″ title now has a bigger audience than “Monday Night Football.”

Newell said the company’s success on PCs is attributable to “the openness of the platform.” But concerns that the platform — and others on which people consume entertainment in the living room — are becoming more closed is what prompted Valve to pursue an alternative several years ago.

Valve will produce and sell Steam game controllers that can be used with Steam Machines, which also work with a computer mouse and keyboard. So far about 250 games are running on the new system.

Newell declined to say how much Valve will charge for the controllers or provide an estimate for how many Steam Machines will be sold this year. Asked if the new platform can match the 3 million units of the Xbox One that Microsoft sold since its launch, Newell said Microsoft needs to catch up to the 65 million users of Valve’s Steam game service.

Steam Machines will be able to run Windows as well, according to PC makers at Valve’s event. Whether they are preloaded with Windows remains to be seen but customers are asking for such “dual-boot” systems, according to Richard Carey, co- owner of Miami-based Origin PC.

“That’s the feedback we’ve been getting,” he said.

It would also help if Valve released a blockbuster game for the system such as the much-anticipated “Half-Life 3,” he added.

Valve does plan to offer media services such as Netflix on Steam Machines and may announce them this summer.

The Steam Machines displayed at Valve’s CES event have a range of designs, from set-top boxes to traditional gaming PC towers.

A standout is a puck-like model from Gigabyte. It’s just slightly larger than the Roku and Apple TV set-top devices but it includes an Intel i7 processor, a 1 terabyte hard drive and 8 gigabytes of RAM.

 

A palm-sized Steam Machine from Gigabyte. Image from Valve.

A palm-sized Steam Machine from Gigabyte. Image from Valve.

Valve announced its plans for the Steam platform last fall and shipped 300 prototype machines to enthusiasts, then promised more details would emerge at CES.

A few other models:

IBuyPower_02

The iBuyPower Steam Machine starts at $499. Image from Valve.

The Scan NC10 Steam Machine with an Intel i3 processor and Nvidia GeForce GTX 765M graphics, priced at $1,090. Image from Valve.

The Scan NC10 Steam Machine with an Intel i3 processor and Nvidia GeForce GTX 765M graphics, priced at $1,090. Image from Valve.

The Falcon Northwest Tiki Steam Machine ranges in price from $1,799 to $6,000. Image from Valve.

The Falcon Northwest Tiki Steam Machine ranges in price from $1,799 to $6,000. Image from Valve.

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