Imagine a small box running SteamOS that easily pairs with a TV or monitor. It would be more powerful than a Switch 2 but cost under $400. This kind of hardware flopped a decade ago, but today it could attract a large audience. Against a gaming industry that faces widespread challenges, Valve stands out as one of the few companies to potentially disrupt the market with small form factor PCs. Sony and Nintendo wouldn’t face immediate threats from such a device. But the strengths of this Valve branded hardware — lets call it the Steam Machine 2 (SM2) — would be hard to beat. The SM2’s simplicity, breadth, and price would be virtually unrivaled.
This hardware would offer a largely console-like experience out of the box, refined through years of SteamOS iterations on the Steam Deck. Players would also get access to the largest, most diverse gaming library available. Steam’s catalog is practically endless, including longstanding franchise hits, indie viral streaming sensations, and most of Sony’s and Microsoft’s first party titles.
The SM2 would also be comparatively affordable. The hardware would be cheaper than a Switch 2 or PS5, without multiplayer access fees in the form of a PlayStation Plus or Xbox Game Pass. Unlike games sold on console or physical marketplaces, most Steam games go on deep discount several times a year.
Of course, an SM2-like hardware would face challenges. Valve remains small and focused compared to many in the industry; adding another device alongside their massive storefront and handheld product may stretch the company’s resources too far. Also, like the Steam Deck, an SM2 can’t depend on the high volume of sales that Nintendo or Sony enjoy, forcing a worse price performance ratio compared to a Switch or PlayStation. Additionally, ecosystem lock in will keep many players away. Gamers have built up digital libraries and existing friends lists outside of Steam. Especially few would consider abandoning Nintendo; even amid larger industry turmoil, the brand is practically flawless in its hardware and software execution.
However, I still believe SM2 represents a major opportunity in today’s vulnerable and fragmented gaming landscape. Xbox faces an uncertain hardware future as Microsoft shifts focus toward AI, with several of its future games cancelled or delayed. Sony’s live service strategy has proven costly and distracting, weakening PS5’s first party output compared to previous PlayStation generations. EA and Ubisoft appear directionless, unable to break away from endless Assassin’s Creed and EA Sports spinoffs. Industry layoffs continue, as studios view AAA games as increasingly risky endevours. Meanwhile, many young gamers are ignoring dedicated gaming devices entirely. The few games they invest time into are ‘evergreen’ franchises (e.g. NBA 2K, Fortnite Call of Duty) often a decade or more in age.
Under such industry headwinds, SM2 provides a compelling alternative for gamers who’d rarely consider PC or console hardware. A device a hundred less than a PS5 or Switch 2 that can play exponentially more trending games at cheaper prices would sell well. Furthermore, a hit would also pave the way for many other PCs running SteamOS hardware. More SteamOS provides more options to consumers while strengthening Valve’s position as the PC gaming leader.