Valve’s Steam Levels Up, Faces Console Competition Directly

While mobile gaming may be quickly moving to the smartphone, the home console business is still alive and thriving. Despite being half a decade old, both the Xbox 360 and PlayStation 3 remained extremely popular gifts this past Black Friday, and Nintendo’s Wii U – the first next-generation console to hit the market – helped boost the company’s sales for the season. Even in a down economy, gaming has thrived.

Part of the equation has always been PC gamers. PC gamers are typically portrayed as a niche audience of people who are geeky enough to build a custom PC in order to get the absolute most performance per dollar. However, with the popularity of Valve’s Steam – an “app store” for PC gamers, which offers almost every major title available – has made gaming on a PC much easier. For years, PC gaming faced a massive distribution problem that the consoles solved. With the widespread availability of high-speed internet across most places in the world, Steam offered a quick and easy way for users to access the latest and greatest games at similar (or, in many cases, significantly less) cost than what games for traditional consoles went for.

Despite this growth and the popularity of Steam, PC gaming has tended to focus on the traditional desktop; in other words, PC gaming never entered the living room, where consoles reign supreme. That is seems about to change, if Gabe Newell – co-founder of Steam – has his way. Steam recently unveiled a way to make Steam use up the entire display, and since then the “Big Picture mode” has garnered a lot of support amongst gamers.

I think in general that most customers and most developers are gonna find that [the PC is] a better environment for them, cause they won’t have to split the world into thinking about ‘why are my friends in the living room, why are my video sources in the living room different from everyone else?’ So in a sense we hopefully are gonna unify those environments.

Steam then announced that it would be releasing a “tightly controlled” ecosystem designed for the living room, and that the company would be shipping a PC of its own that was designed expressly for use in the living room. Newell also mentioned that other PCs would be released that were designed for use in the living room, and that they could possible come preloaded with Steam.

It’s unclear what OS will power Valve’s “Steam box,” as Newell has infamously been very skeptical of Windows 8 and how Microsoft locked it down. Valve recently expanded Steam to support Linux, though not enough games work on that platform for it to power the upcoming Steam box. In all likelihood, it will be powered by Windows (note that Windows 7 is still being sold and supported by Microsoft).

The console wars are about to get interesting. Many believe that Apple may move to compete with Sony, Microsoft, and now Steam by opening up the Apple TV to developers next year. At the same time, both Sony and Microsoft are on track to release next-generation consoles before the end of 2013, and Nintendo is already out of the gate with its Wii U, which has seen at least moderate success. Valve may be able to put its foot in the door, as they hold a special place in the heart of most gamers, but it remains to be seen if they can appeal to a mass audience in the same way that Nintendo and casual games on iOS and Android do.


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