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So Valve made three big announcements last week. (Well, two big announcements and a foregone conclusion.) They announced a new operating system, a new console on which the OS will run, and a new controller. Having the biggest name in PC gaming move into the console space has ripped open the embarrassing PC vs. consoles debate again, and people are denouncing or praising the Steam Box based on which camp they’re in without really understanding what it is or why this is such a completely fascinating move for Valve to make.

So let’s get this PC vs. Console thing out of the way: On the consumer side, the debate is about which games you like more, controller setups, convenience, and pricing. The debate is still very much alive and no single gaming device is objectively better than the others. It depends on how you play, why you play, and where you play. There really is no clear winner.

But on the corporate side, the debate has been over for almost a decade, and consoles won. It wasn’t even close.

To the big companies, “gaming” means big-budget AAA titles. They want to make big, big games and sell them to as many people as possible. That means selling to console players, because AAA console players vastly outnumber AAA PC players. (Well, you sell more units. Let’s not drag piracy into this. It’s complicated enough already.) The mobile market is shaking things up right now, but it’s still true that if you want the big bucks and you’re not World of Warcraft, then you need to be on consoles. Mouse and keyboard controls don’t matter to the likes of EA and Activision. They also don’t care about the price of Xbox LIVE, strategy games, indies, graphics cards, modding, or any of the other stuff that’s so important to us PC gamers. They care about sales, and consoles far outstrip the PC. This is a simple business decision.

Which brings us to Valve. Now, you can argue that Valve is an incredibly smart company or you can argue that the competition is just shockingly inept, but the dominance of Steam can’t be overlooked. I have no hard numbers on the market penetration of Origin, Games for Windows LIVE, Direct 2 Drive, Gamer’s Gate, Origin, and Good Old Games. In fact, I don’t think anyone has the complete picture of what people are using. But just think of how often you see people ask, “Will this game be on Steam?” Compare that to how often people ask about (say) Origin or Uplay. Have you ever heard of anyone asking about the latter in a hopeful way? I haven’t.

I don’t think it’s unreasonable to say that if you were to combine the userbase of all non-Steam digital gaming / distribution platforms and then double them, it would still be less than the number of people using Steam. Since 1990, I don’t think any single console has dominated its rivals the way Steam has dominated the PC world.

Steam Machines

Valve is really, really good. (Or their opposition is really bad. I don’t care which way you look at it.) They took over the PC market and the likes of Microsoft, Activision, and EA were never able to do a thing about it, even though they’re many times larger than Valve. If you want to do AAA business in the PC realm, you have to pay tribute to Valve. Getting your AAA game on Steam is more important than getting it on the shelves of Wal-Mart or Gamestop.

Now this PC platform juggernaut is taking a swing at the console market.

The console realm is murderously difficult to enter. You need good hardware, and it needs to be cheap. But it can’t be cheap until you’re sure you’re going to sell a lot of units. But how can you sell a lot of units when you don’t have a userbase yet? Nobody wants to buy your new console because it doesn’t have any games yet, and nobody wants to make games for it because it doesn’t have any market share. You could try cutting a deal for exclusives with publishers, but why would a publisher return your phone calls when you have no users, games, or hardware? You’ve got multiple overlapping paradoxical requirements.

But note how Valve is routing around these problems. They’re fixing the lack of titles by making a platform that will run (some?) PC games. Not only will there be games for the Steam Machine at launch, but there are games for it now and you probably own some of them already. They have a userbase and the userbase has games. They’re getting around the hardware problem by using off-the-shelf PC parts and a free (both kinds of free) operating system.

One last thing to note is that a lot of people are confused about the new Steam controller. A lot of people had the same reaction I did to the “dual trackpad” idea, which is to look at it like some sort of hilarious misfire. There’s no way you’d want to play a platformer, shooter, or a strategy game using just a trackpad. That would be madness.

But these aren’t just trackpads. They offer haptic feedback. Unless you’re an academic or involved in interface R&D, you’ve probably never touched a haptic interface before. Calling these things “trackpads” is kind of like calling the Kinect a “camera”. Technically, true, but kind of overlooking the most important details.

Are Steam Machines going to be a rival to the Playstation and the Xbox in the living room? I can’t say one way or another. I have no idea how many people are looking to bridge the gap between their PC gaming and their living room gaming. But if that market exists, Valve is set to grab it. This is an exciting move.

Having said that: If they don’t have Half-Life 3 as a launch title they’re crazy.

Shamus Young is the guy behind Twenty Sided, DM of the Rings, Stolen Pixels, Shamus Plays, and Spoiler Warning. He’s also making an indie game.

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