Microsoft Studios Exec Cautions Valve on Launching Hardware

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Microsoft Studios Exec Cautions Valve on Launching Hardware

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Phil Harrison warns Valve that, despite its size, it may be entering a "really tough business".

The news of Valve's Linux-powered Steam Box has been making waves in the console space. Even for a company of Valve's size, it's hardly a trifling decision to square off against well-established console players such as Sony, Microsoft and Nintendo. Phil Harrison, Microsoft Studios executive and PlayStation brand veteran, issued a warning to Valve, saying that the company could potentially be in for hard times.

"Entering the hardware business is a really tough business," Harrison cautioned. "You have to have great fortitude to be in the hardware business and you have to have deep pockets and a very strong balance sheet. It's not possible for every new hardware entrant to get to scale."

The former President of SCE Worldwide Studios suggested that Valve might be successful at a smaller scale, but added that it was "very rare" for a new entrant to ramp up to moving tens or hundreds of millions of units.

"It's not just having a great brand or a great software experience. It's about having a supply chain and a distribution model and a manufacturing capacity and all the things that go with it. It's a non-trivial problem to solve and it takes thousands of people to make reality," he continued.

Harrison also stated that he "admired" Valve and their achievements with digital distribution, as well as their role in the industry. However, he hesitated to use Steam as a benchmark of success. "Xbox Live as a foundation, the reach we have and the experience we deliver is a great place to build on."

Cautionary words aside, Harrison saw the increased competition from Valve, Nvidia and Ouya as "a win for everybody" in the end. "Any new entrant, without being specific to any company or brand or product, to the games industry is ultimately a good thing, because it helps validate, grow and enhance consumer excitement and consumer interest in our category."

Source: Eurogamer

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I hope at the minimal , Valves use of Linux will make MS think again about improving PC gaming support and ditch the idea of making the PC a over sized tablet / mobile / android style machine with apps and appstore.
I hope it makes Linux a viable alternative for PC gamers, so MS cant just ignore the PC gaming market and using its leverage on the OS to cripple PC gaming.

MS already tried to turn the PC into a expensive 360 style machine with GfWL, now it seems to want to turn it into a android machine with its appstore.

Linux needed a large entity to back it so as to get some more coverage and hopefully more support.

Timothy Chang:
However, he hesitated to use Steam as a benchmark of success. "Xbox Live as a foundation, the reach we have and the experience we deliver is a great place to build on."

I am not quite sure I understand this statement. It seems to innitially imply that he wants to use an example of success but at the same time seems to endorse XBox Live as a place to build on... for... the... Steam Box?! Or he is implying that its foundation was what allowed them (Microsoft and its second console) to succeed in the current market?

I am completely lost, someone is going to have to break it down for this dumbass (me).

To me it just sounds like coward talk.

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.

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

I have a gut feeling that this statement may slightly be out of fear of Valve as well, despite his comments saying that it is a win for everybody.

Cautionary words aside, Harrison saw the increased competition from Valve, Nvidia and Ouya as "a win for everybody" in the end. "Any new entrant, without being specific to any company or brand or product, to the games industry is ultimately a good thing, because it helps validate, grow and enhance consumer excitement and consumer interest in our category."

Good man and well said.

I find myself agreeing quite a bit with Harrison. Despite some people apparently believing everything Valve touches is solid gold, I have my doubts that this new hardware thing they're doing will be as successful as they think.

That said, I also agree with the part about more entrants being a good thing. Competition breeds innovation and all that jazz.

Harrison had nothing to do with it (before his time), but Microsoft's many and massive struggles with the two Xbox models have been entirely of their own making.

Speccing the cheapest possible power cable with poor fuses, what could possibly go wrong?
Thermal stress testing? Ah let's save a couple hundred thousand and not bother, the chipset will be fine.

With any luck I would expect Valve not to fall prey to such obvious (and self defeating) penny pinching. We'll see either way.

Well, there's obviously going to be competition, but the comparison to steam to xbox live was pretty laughable, did he not notice that steam has more users anyway, and the very sour reputation xbl is getting lately? o.O

However, that's not really all that relevant. He also has to realise Valve isn't making a closed system like microsoft do, they're simply making a mass production PC designed specifically for games. It's a box people can pick up knowing it'll run PC games without having to fret about the components in it too much. Unlike 1500 'gaming PC's from PC world which have a hd7570 and are therefore useless.

So, unlike a new xbox, it doesn't need to get a big userbase to be successful, PC has a userbase. It is already wildly successful. All Valve have to do is say 'you know all those cool PC games you've been missing out on because you're worried about specs and it being too complicated to buy a PC as a result? just buy this and play them all happily' to people who were previously worried about the 'expensive and complicated' PC platform, and job done. PC already has a ton of 'killer apps' anyway. Just market it as a DotA-box :P

So, if anything, this is more like the PC equivalent of a 'slim ps3' which is cheaper than the older version, so that entices new people to the already massive playerbase.

Maybe he talked about this in the interview though :D So i need to read it all when i get some time. This is just based on the escapist's summary.

sounds to me someone is scared to have a company that actually could make good solid hardware that us gamers can appreciate. because they know that might make losses when they cant sell their hardware that is either crap or over priced.

"You have to have great fortitude to be in the hardware business and you have to have deep pockets and a very strong balance sheet."

Pretty sure none of those are an issue for Valve right now.

Saulkar:

Timothy Chang:
However, he hesitated to use Steam as a benchmark of success. "Xbox Live as a foundation, the reach we have and the experience we deliver is a great place to build on."

I am not quite sure I understand this statement. It seems to innitially imply that he wants to use an example of success but at the same time seems to endorse XBox Live as a place to build on... for... the... Steam Box?! Or he is implying that its foundation was what allowed them (Microsoft and its second console) to succeed in the current market?

I am completely lost, someone is going to have to break it down for this dumbass (me).

You're not the only one. This also confused the fuck out of me.

OT: I smell your fear, MicroSoft... and it smells delicious...

I understand that Valve could be entering a tough market, but something tells me that Harrison is worried that Valve will not only be able to pull it off, but blow them out of the water...

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.

Still don't understand the gaming hate for Windows 8.

Doesn't stop anyone from installing their own programs ie. Steam and every other game in the world.

Been using it for the past few months and have only browsed the app store to see what was in it. Definitely not killing my Windows 8 or gaming experience...

Steam is still my one stop shop for games and good bargains :)

Best of luck to Valve though, the more the merrier!

Microsoft Studios executive and PlayStation brand veteran, issued a warning to Valve, saying that the company could potentially be in for hard times.

If you put your customers through bullshit like putting their personal data at risk, an annual subscription an gimmicky hardware then yes, you'll have hard times. Also, if you cause so much outrage within your user base by making up more useless shit along the way, then yes, you'll have hard times.

Harrison also stated that he "admired" Valve and their achievements with digital distribution, as well as their role in the industry. However, he hesitated to use Steam as a benchmark of success. "Xbox Live as a foundation, the reach we have and the experience we deliver is a great place to build on."

What? Are you trying to look like an idiot or are you just ignorant? Since when is Xbox Live a great place to build on? I can't imagine how much hoops you have to jump through just to get your game up there. Oh, and let's not forget about Microsoft points, being able to choose from just a handful of countries while registering and having only one item on sale during the holidays that's worth it and just for one day.

I don't usually rant like this but when faced with such stupidity and ignorance I'm really powerless to resist. I realize this is just some corporate style response to Valve's efforts but I really don't think they need advice from the "big three" that are more and more looking like the gaming equivalent of dinosaurs. Think Valve pretty much showed them how it's done in some key areas.

Microsoft are quaking in their boots.

SRSLY?

Was he tapping a baseball bat into his hand when he was saying this?

MS' successes in gaming can be broken down into two parts. Their late inhouse development studio, and its Age, MW, and Flight Simulator titles, and Xbox.

They've tried repeatedly, with every new windows gaming developer push, to bridge the Xbox and PC divisions, and failed each and every single time. And now they're trying again with Windows8(RT), WP8, and Xbox, and with Win8, they're bringing the worst parts of the IOS' return to the Bad Old Days of computing to the formerly open PC. And blaming Windows 7 Starter for the slow uptake of Win8, because development costs money.

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.

I won't be buying the Nvidia platforms, the ouya or any valve hardware any time soon, but I think this new competition is great! I hope it knocks MS and Sony off their high horses because I'm getting really pissed off with the service I'm getting on XBL at the moment.

I'm essentially paying 30pa for total shit for things basically everybody else supplies for free, with about as much of the good functionality (online play, internet browsing, demos, DLC) and with less shit on top (adverts, other subscription services, controller unfriendly UI).

I've already spent more time on Steam this past 30 days than I have on XBL, and my computer can't play any good games.

Yahtzee was right: Fuck console wars. I hope they trail off into good ol' competition because that's what we need right now, not some petty squalor. Microsoft better pull some money out because right now I feel like I'm being milked so they can fill their piggy bank, rather than trading my money for a good service I want.

He forgot about Valve's secret weapon: hats.

fix-the-spade:
Harrison had nothing to do with, but Microsoft's many and massive struggles with the two Xbox models have been entirely of their own making.

Speccing the cheapest possible power cable with poor fuses, what could possibly go wrong?
Thermal stress testing? Ah let's save a couple hundred thousand and not bother, the chipset will be fine.

With any luck I would expect Valve not to fall prey to such obvious (and self defeating) penny pinching. We'll see either way.

Considering the existance of 'Valve Time' I'll say the odds are good that they are going to make sure this works without cutting any corners.

the.chad:
Still don't understand the gaming hate for Windows 8.

Doesn't stop anyone from installing their own programs ie. Steam and every other game in the world.

Been using it for the past few months and have only browsed the app store to see what was in it. Definitely not killing my Windows 8 or gaming experience...

Steam is still my one stop shop for games and good bargains :)

Best of luck to Valve though, the more the merrier!

...

Why are you bringing up Windows 8?

You scared Microsoft? You should be.

Joking aside, I think people will appreciate Valves service more in the long run, whereas even though Microsoft offer a solid service it comes with a premium fee, ads on every dashboard page, a whiny young demographic, no hardware customisation, shit sales (relatively speaking).

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

AlexLoxate:

Microsoft Studios executive and PlayStation brand veteran, issued a warning to Valve, saying that the company could potentially be in for hard times.

If you put your customers through bullshit like putting their personal data at risk, an annual subscription an gimmicky hardware then yes, you'll have hard times. Also, if you cause so much outrage within your user base by making up more useless shit along the way, then yes, you'll have hard times.

Harrison also stated that he "admired" Valve and their achievements with digital distribution, as well as their role in the industry. However, he hesitated to use Steam as a benchmark of success. "Xbox Live as a foundation, the reach we have and the experience we deliver is a great place to build on."

What? Are you trying to look like an idiot or are you just ignorant? Since when is Xbox Live a great place to build on? I can't imagine how much hoops you have to jump through just to get your game up there. Oh, and let's not forget about Microsoft points, being able to choose from just a handful of countries while registering and having only one item on sale during the holidays that's worth it and just for one day.

I don't usually rant like this but when faced with such stupidity and ignorance I'm really powerless to resist. I realize this is just some corporate style response to Valve's efforts but I really don't think they need advice from the "big three" that are more and more looking like the gaming equivalent of dinosaurs. Think Valve pretty much showed them how it's done in some key areas.

All of This^

And lets be honest.... Think about Xbox live for a second do not think about the shitty service or poor support. Think about the ACTUAL people you encounter on the service..... What came to mind?

Now think about the people you encounter on Steam games...What came to mind?

Using my psychic powers you came up with a bunch or racist homophobic 13 year olds, and mature players trying to have fun playing a game, respectively. Obviously there are exceptions to the rule but they are not consistent by any stretch of the imagination.

Oh yeah I think you should totally take advice from Microsoft on how to attract people to a service and what to provide them..................

As much as I enjoy using Steam, what this guy said is actually true. Both Sony, MS had hardware distribution experience before releasing console and Ninny is on console market, since... like... forever. Don't know about US, but managing shipping to every single country in UE or Asia is not easy thing to do, not to mention tech support, warranties etc. Probably because of these, most of mass production PC models are not available in Europe or are too expensive for anyone to really care (at least in central Europe).

I.E. Microsoft is scared shitless.

I gotta side with the XBL rep. It's clear he shows respect NOT FEAR for valve entering the market. Valve aren't Jesus, people, I like them too but I at least recognize reality. Valve has clearly put thought into this and I am all for it but its going to be DAMNED hard to get the name valve to be recognizable as something like Microsoft.

I think he makes a very good point. Whilst Valve are pretty awesome, I'm not entirely convinced that they'll fare very well launching a console, it's notoriously tough. And say what you like about Microsoft, but Harrison has been in the industry a long time and knows what he's talking about. Also, it's nice to hear someone in the industry not come across as a total arse for a change when talking about another company.

slash2x:

AlexLoxate:

Microsoft Studios executive and PlayStation brand veteran, issued a warning to Valve, saying that the company could potentially be in for hard times.

If you put your customers through bullshit like putting their personal data at risk, an annual subscription an gimmicky hardware then yes, you'll have hard times. Also, if you cause so much outrage within your user base by making up more useless shit along the way, then yes, you'll have hard times.

Harrison also stated that he "admired" Valve and their achievements with digital distribution, as well as their role in the industry. However, he hesitated to use Steam as a benchmark of success. "Xbox Live as a foundation, the reach we have and the experience we deliver is a great place to build on."

What? Are you trying to look like an idiot or are you just ignorant? Since when is Xbox Live a great place to build on? I can't imagine how much hoops you have to jump through just to get your game up there. Oh, and let's not forget about Microsoft points, being able to choose from just a handful of countries while registering and having only one item on sale during the holidays that's worth it and just for one day.

I don't usually rant like this but when faced with such stupidity and ignorance I'm really powerless to resist. I realize this is just some corporate style response to Valve's efforts but I really don't think they need advice from the "big three" that are more and more looking like the gaming equivalent of dinosaurs. Think Valve pretty much showed them how it's done in some key areas.

All of This^

And lets be honest.... Think about Xbox live for a second do not think about the shitty service or poor support. Think about the ACTUAL people you encounter on the service..... What came to mind?

Now think about the people you encounter on Steam games...What came to mind?

Using my psychic powers you came up with a bunch or racist homophobic 13 year olds, and mature players trying to have fun playing a game, respectively. Obviously there are exceptions to the rule but they are not consistent by any stretch of the imagination.

Oh yeah I think you should totally take advice from Microsoft on how to attract people to a service and what to provide them..................

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.

See Microsoft, "Back to basics" just like Captcha says.

Well of course entering into the console market is going to be challenging. When has it not been? And Valve is known for taking up challenges, be it their digital distribution model or their games, so I'm hopeful here.

I mostly play console games, but I'm excited to finally see some new faces starting to come around. Having some new blood won't hurt anyone in the long run.

Ah yes, the friendly "advice from the competitor" speech, I can't fathom what ulterior motives Harrison might have in discouraging Valve from entering the hardware business. Especially since Valve seems to be approaching sainthood in the eyes of gamers.

Side note, I'm pumped for the Steam Box. Personally, anything that helps PC gaming is good by me :)

Steambox is a nice idea, but if it's just another platform for digital distribution of PC games, I can't say I'm interested.

Microsoft could make so much money on the side by simply giving the next windows a xbox 360 mode so i can run xbox 360 games on the pc.

I'm sorry Mr. Harrison, I couldn't hear your comment over the sound of you shitting yourself.

the.chad:
Still don't understand the gaming hate for Windows 8.

Doesn't stop anyone from installing their own programs ie. Steam and every other game in the world.

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

Not quite unlike trying to turn all of Windows into something like the Amazon Kindle. It will bring you entertainment in many forms and in no small quantity, but it doesnt allow you to get anything from an alternative source and trying runs the risk of getting your system bricked.

As such i believe Gabe is accelerating the growing gaming market in Linux because he genuinely believes that Microsoft will lock down Windows eventually.

Of course whether that will happen or not is still up in the air, but if the shit hits the fan its better to have a fallback.

While everyone is jeering at this guy, he's not actually wrong about his main point.
Consoles are an all or nothing business and if you fail out of the gate, you waste millions. Companies have lived and died on the strength of their consoles and if Valve wants too get into the business they need to be really sure about their capacity. Plus, he does end off by welcoming competition. I don't really know what he hoped to gain by making this warning, it was really ill advised as it can be -so- easily twisted as someone talking out of fear of innovation, but he did and Microsoft will have to deal with the fallout from him flapping his gums.

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.

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