The executives at Xbox and Microsoft seem to have welcomed the announcement of the new Steam Machine, but analysts believe that behind the scenes things might not be as positive. They argue that Steam Machine could turn out to be a serious competitor — possibly Xbox’s worst nightmare.
“Steam Machine basically turns Microsoft’s worst nightmare into a shipping product,” explained Joost van Dreunen, professor at the NYU Stern School of Business and video game industry analyst. “It pushes Microsoft further down the path it’s already walking, where Game Pass and cloud access matter more than plastic boxes.”
Van Dreunen suggests that Microsoft’s positive response might hide some strategic concern. “The strategic risk,” he said, “is that Valve becomes the preferred PC-console hybrid, meaning Xbox games strengthen Steam’s ecosystem more than Microsoft’s own.”
The Future of Xbox Hardware
That said, Xbox appears to be aware of the situation. Phil Spencer, head of Microsoft Gaming, spoke about the Steam Machine and emphasized the importance of access over hardware: “Expanding access across PC, console, and handheld devices reflects a future built on choice, core values that have guided Xbox’s vision from the start.”
In fact, Xbox has every reason to offer more ways to sell its games on Steam, where it already has dozens of titles. “As one of the largest publishers on Steam, we welcome new options for players to access games everywhere,” Spencer said.
David Cole, founder of DFC Intelligence and a well-known industry analyst, is far more pessimistic about the future of Xbox hardware: “Xbox console sales have really struggled. Steam Machine is just another sign that there may not be room in the market for a dedicated Xbox console system.”
It’s also worth noting that Valve hasn’t officially announced the price for Steam Machine yet, however, the cost may be higher than many expect and could exceed the hopes of the many fans.
