Alienware: Steam Machine will be Our Least Profitable PC Ever

Alienware: Steam Machine will be Our Least Profitable PC Ever

Alienware Steam Machine

But that doesn't mean Alienware and Dell won't sell a butt-ton of them.

The rise of the Steam Machines quickly approaches!

All those Steam-powerered PCs we got a glimpse of back at CES? They're coming later this year, including the small little Alienware PC That Could.

Alienware's Steam Machine, which is expected to be priced at the same level as the Xbox One and PS4, will 'absolutely be the least profitable system we ever sell," according to Alienware GM Frank Azor.

It's not hard to make a case for razor-thin profit margins in this scenario. The Alienware Steam Machine is going to be a custom piece of hardware, based solely on its diminutive size. And getting to a presumed $499 price point means hardware profits could be in the single-digit dollar range, depending on sources and horsepower.

On the other hand, a Steam Machine without the pay-for-license Windows means money sent to Microsoft is now money saved, which should help cushion the blow. When combined with a sales volume Alienware could see with a $500 machine (as opposed to something twice as costly), and a yearly refresh cycle, you can see how Dell is going to make money in the end.

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One must wonder why a formerly high-end gaming PC manufacturer would complain publicly about a new product's profit margins when their brand credibility is hanging by a thread.

It's just inviting hate.

If you are large system builder the cost per windows license drops. If you are on the volume license deal the price of windows is around $25 depending on the number licenses you buy. For a large volume manufacture the cost of windows is a very low compared to cost of a halfway decent cpu and and graphics card.

I can't help but wonder if he means "least profitable" in regards to the usual Alienware profit margin or if hes thinking more in line with the standard consumer market.

I'm not trying to fan the flames of hatred at Alienware - I've always viewed the additional cost as part of buying "the badge" and paying to have a cool looking PC without the hassle of having to build it yourself - but as I say its worth keeping in mind that a reduced profit margin in the eyes of Alienware could still be a high amount.

"powerered" Does anyone proof-read these? -.-

Haha, Alienware is complaining about having to price their hardware the same as everyone else's. Of course their profits will be lower, they normally charge consumers double for what their hardware is normally worth.

While I do think I'll pick up a steam machine at some point (and dual-boot it with Windows, mainly looking to take advantage of the mass-production as well manufacturers cutting in profits to establish a foothold in this 'newish' market).

I sincerely doubt it will be this one.

So they'll only make 400% markup on it then? *hurr*

In all seriousness there is a reason Alienware gets laughed out of the building. I remember a few years ago they were selling an "SLI machine" as a super performance machine with big trumpets about having two GPUs with a massive price point. Turns out they were using the very bottom end of what nvidia currently sold at the time. Basically they were charging over 1000 for two re-branded 8800gt cards. As a result the gians from SLI were not only quite slim (old architecture and all that) the machine was basically underpowered even compared to very affordable mainstream builds.

What they put into a build compared to what they charge for it was and is frankly insulting.

meh, profit is profit, you do not need to take all of the money, just some of it

dont these guys like, super overcharge for their products?, i havent bought them but its just some stuff ive heard

JPArbiter:
meh, profit is profit, you do not need to take all of the money, just some of it

Welcome to Capitalism, sell as little of what you can for the most you can, Alienware have always been just a bling brand name and they have long been surpassed in the custom PC market by companies who sell much better systems for a lot less and they are probably whining over this because Valve probably gave them a spec build and a price cap so they couldn't whack a AW badge on it with some LED's and charge 60% more than other SteamBox's.

NuclearKangaroo:
dont these guys like, super overcharge for their products?, i havent bought them but its just some stuff ive heard

Yes they take a $800 PC and put it in a AlienWare branded case and charge $1600.

Alienware is similar to Apple, in that you pay for a name and not just a product. Not trying to claim equivalence on quality or whether or not such a premium is warranted, but it is similar in regards to pricing.

NuclearKangaroo:
dont these guys like, super overcharge for their products?, i havent bought them but its just some stuff ive heard

Yeah, they do.

Doesn't mean I wasn't as pleased as punch with my computer that I bought from them. :D

It was a great starting point, and now I have a fancy case to gut and rebuild as I please.

Anyways, if the machine is profitable, then it's worth building.

lacktheknack:

NuclearKangaroo:
dont these guys like, super overcharge for their products?, i havent bought them but its just some stuff ive heard

Yeah, they do.

Doesn't mean I wasn't as pleased as punch with my computer that I bought from them. :D

It was a great starting point, and now I have a fancy case to gut and rebuild as I please.

Anyways, if the machine is profitable, then it's worth building.

Always great to run into another satisfied Alienware user.

Yeah, I kind of get why people hate on them, but based on experience- I was pretty damn pleased with my $1200 Aurora R3 a couple of years ago. i7, 560ti, 12gb ram, etc., granted I could've built it for a bit cheaper, but it was nice getting a well put-together system, with no bloatware, pre-installed with some games I play and some of my steam library, with a damn good warranty (no need to do my own troubleshooting, I do that enough at work), and a very easy to work with, very well laid out case interior (shit, it even has task lighting built into the case when you open it up). Also, I've had it for a little over 3 years, and haven't so much as had a single BSOD, hardware problem, or software problem that wasn't corrected with drivers or a quick cleanup.

On a daily basis I maintain a campus with ~150 faculty users, ~1500 student users, ~550 devices including several mobile labs, and an even split PC and Mac with some Chromebooks and iOS in the mix: I thoroughly enjoy the headache/hassle-free experience Alienware has given me, and will gladly pay the premium for it again when I'm ready for a new computer. But, haters gonna hate ;)

Scrumpmonkey:
So they'll only make 400% markup on it then? *hurr*

Damn, you got me. I was going to post that. Now I have to think of my own joke.

Erm....now they'll only be able to afford two Solid Gold Yachts each?

Fuck you, this is surprisingly difficult

I was going to comment on how i seriuosly doubt that considering how extremely outdated hardware they are putting in it (seriuosly, NOONE should be buying this processor, its ok if you bought it 5 years ago when nothing better was around, but dont buy it now).
Then again, their profit margin is usually over 100% so i guess they may be earning only 60% now? Oh the horror!

NuclearKangaroo:
dont these guys like, super overcharge for their products?, i havent bought them but its just some stuff ive heard

i dont know about your builds, but mine never got faster by installing few nice looking LEDs in them and applying a costum windows wallpaper.

Scrumpmonkey:
So they'll only make 400% markup on it then? *hurr*
...I remember a few years ago they were selling an "SLI machine" as a super performance machine with big trumpets about having two GPUs with a massive price point.

Sheesh. If they hadn't given PC gaming such a bad name for so long, I wonder if we'd be where we are with PC adoption. Which is on top, of course, because pcgamingmasterracepraisegaben, but alienware in particular really established the stereotype of $2000 biannual upgrades.

thiosk:

Scrumpmonkey:
So they'll only make 400% markup on it then? *hurr*
...I remember a few years ago they were selling an "SLI machine" as a super performance machine with big trumpets about having two GPUs with a massive price point.

Sheesh. If they hadn't given PC gaming such a bad name for so long, I wonder if we'd be where we are with PC adoption. Which is on top, of course, because pcgamingmasterracepraisegaben, but alienware in particular really established the stereotype of $2000 biannual upgrades.

Dell in general has made having a computer seem much more expensive and much more work than it needs to be. Alienware is simply an estension of that (literally, they are Dell) but you did used to see many peasants console gamers who only look at the surface point to them and spin that whole "1000 twice a year" thing. Even many who want to get into PC gaming don't know don't have the knowledge base and when Dell and Alienware were so ubiquitous that's just where they would turn.

Look, im sorry, but if you buy an Alienware you are taking your money and throwing it into a giant pit with poor quality parts and 'gotcha' service agreements. Do your research. Be a smart consumer. Buying an Aleinwaere is like buying McDonolds if McDonald's cost as much as a michelin stared restaurant. If you did that people would have the right to laugh at you. Look for somewhere else to eat. Look for ANYWHERE else to get a PC.

stormeris:
"powerered" Does anyone proof-read these? -.-

I'm sure they do, but typo's like that are incredibly easy to miss, due to the way we read words.
Because we don't , we sort of just recognize the words.

That is why the following is still perfectly readable:

Aoccdrnig to a rscheearch at Cmabrigde Uinervtisy, it deosn't mttaer in waht oredr the ltteers in a wrod are, the olny iprmoetnt tihng is taht the frist and lsat ltteer be at the rghit pclae. The rset can be a toatl mses and you can sitll raed it wouthit porbelm. Tihs is bcuseae the huamn mnid deos not raed ervey lteter by istlef, but the wrod as a wlohe.

EDIT:
Yes, I am aware that no such research has been done at Cambridge, but that is besides the point.

 

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