Wednesday, September 5, 2012

Valve Beating AMD To The Punch

After much denial, it appears that Valve has all but admitted to their making a dedicated video game system, generally referred to as the Steam Box.

This is a pretty big assumption on my part, since all that Valve has done is hire an industrial designer, but let me explain. Valve, specifically founder/president Gabe Newell, have been lamenting the state of video game technology for some time. They're not alone in this. Most people steeped in the world of digital entertainment are devoid of excitement for yet-another-Modern-Warfare and a new console that's exactly like the old console just with more bits (where are we with that, anyhow? 512-bit systems?). Truly, the curmudgeonly old hand complaining that games back in the day were significantly more interesting and fun has become a cliche.

Gabe Newell is smart enough to realize that this sort of complaining is the explicitly-stated surface to an implicitly-felt market force. Many people are uninterested in games, they just don't know enough to say it in such well-formed terms. The seminal success of the original Wii proves that people want something new. Valve knows this. They've said as much.

That means that they see a market opportunity. A big one. Dedicated gaming hardware will always be a market, and the better it is, the larger the market. So while Valve may be just interested in designing better forms of interface (keyboards, mice), I suspect that they wouldn't bother with such small-time stuff. I suspect that they would go full-throttle into something new.

And considering Valve's earlier experiments in game pricing, where cheap games sold orders of magnitude more than more expensive games, I think that Valve's true innovation would be the profit model. Sell the games cheaply, make money on the hardware. Because when you look at many of the games that are selling on Steam, most of them don't need cutting-edge hardware. I'm playing Torchlight 2 on a five-year-old laptop.

All of those variables combine to form one giant opportunity. AMD could still beat Steam to the starting line, but they had better work quickly.

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