Once again Valve proves they actually understand what people want; a relatively cheap and effective system that lets people play the games they want to play
They do not have investors constantly forcing maximization of short term profits at the cost of literally everything else.
I fantasize about the idea of starting private companies for things currently dominated by public companies, with the sole idea of not being greedy and shitty.
I honestly don’t understand why most companies aren’t private instead of public. Like which founder looks forward to answering to investors when they could just be answerable to themselves and their employees and maybe board, like are they looking for a massive exit payout by going public or to raise funds to become a bigger company, but I argue if you are making enough to be profitable why chase being bigger
Probably the biggest advantage they have is that they can sell devices at cost or even at a loss and still profit from increased Steam game sales, like how other console makers operate.
3rd parties can’t compete with that. Not even close. If there’s no profit from the device itself, there’s no motivation to make it. And apart from the hardware cost, they also need to pay for the R&D and corporate maintenance. They can’t compete with the Steam Deck. If they made an exact Steam Deck clone, they’d have to make it, idk ~$40 more to make a profit, but no one would buy it because the Steam Deck is the same for less. They have to give it slightly higher specs to give it a niche. That might take hardware cost up to $500 and then charge $150 more to make up for the distributor fees and then $100 to make it actually profitable. But at that point, they’ve already lost most budget and casual gamers, they might as well aim at whales and enthusiasts and make profits $300. If a $950 device sells half as well as a $750 device, it’s still more profitable.
The Steam Deck is not sold at a loss. The initial pricing for the 64 GB unit was barely profitable, but this quickly changed with production ramping up.
This was confirmed by Valve themselves in an interview that happened months after Gabe’s famous comments about the pricing.
So yes, Valve profits from the games too, but that’s not used to subsidize the Steam Deck’s price.
Yep, this is a good explanation of more of the nitty gritty of it in more granular detail!
When you can afford to eat some of the cost… or… you don’t have shareholders telling you not to do that… well, then you get good ole ‘how capitalism is supposed to work! ™’.
Problem of course being that uh, you can just chase the luxury market for greater profit margins, stop making shit for the poors… this can work well in the short/medium term, but in the long run… if everyone does that…
… then you destroy your customer base, and the entire economy, and probably yourself.
And that’s not even getting into how companies have their own version of ‘keeping up with the joneses’… its called going into massive debt to fund an expansion because your competitor just did that… and then going into more debt to finance a stock buyback… but hey nbd, companies can fail and go bankrupt, no problem, everyone other than those helming the ship get fucked, they get golden parachutes.
Sure would be neat if we maybe had some other kind of system idk
I think the big difference is that they seem to be optimizing for customer satisfaction where others are not.
My favorite example I use often is how the Steam Deck comes with a case. It’s free and there’s not even an option to not get it. They know you need one, they include it. The Switch doesn’t come with a case. They know you need one but they don’t care. You’ll buy one if you want it bad enough and that’s more revenue.
its partly windows, and partly 8 core AMD CCDs that handhelds dont need.
Lenovo was given a holy ball (Z2 go cpu, basically 4c/8t zen 3 cpu and 12 rdna 2 cu cores (as apposed to the zen 2 and 8 cu rdna2 the steam deck has) and if they priced it at 600 tops and go down from there. it would be extremely competitive.
lenovo is basically like nah, 750$ it is. and i think its the reverse (starts at 600 and goes up)
I mean that’s just how consoles are, except Valve does let you just use it as a normal pc so you can use other stores if you want to. Still an advantage to them
Once again Valve proves they actually understand what people want; a relatively cheap and effective system that lets people play the games they want to play
Two things massively help Valve:
Steam is a goddamned money printing machine, they are the most profitable software company per capita, per employee… possibly bar none.
Also… they’re not publically traded.
They do not have investors constantly forcing maximization of short term profits at the cost of literally everything else.
… So they can afford to … not price gauge everyone.
I fantasize about the idea of starting private companies for things currently dominated by public companies, with the sole idea of not being greedy and shitty.
I honestly don’t understand why most companies aren’t private instead of public. Like which founder looks forward to answering to investors when they could just be answerable to themselves and their employees and maybe board, like are they looking for a massive exit payout by going public or to raise funds to become a bigger company, but I argue if you are making enough to be profitable why chase being bigger
Probably the biggest advantage they have is that they can sell devices at cost or even at a loss and still profit from increased Steam game sales, like how other console makers operate.
3rd parties can’t compete with that. Not even close. If there’s no profit from the device itself, there’s no motivation to make it. And apart from the hardware cost, they also need to pay for the R&D and corporate maintenance. They can’t compete with the Steam Deck. If they made an exact Steam Deck clone, they’d have to make it, idk ~$40 more to make a profit, but no one would buy it because the Steam Deck is the same for less. They have to give it slightly higher specs to give it a niche. That might take hardware cost up to $500 and then charge $150 more to make up for the distributor fees and then $100 to make it actually profitable. But at that point, they’ve already lost most budget and casual gamers, they might as well aim at whales and enthusiasts and make profits $300. If a $950 device sells half as well as a $750 device, it’s still more profitable.
Edit: more realistic numbers
The Steam Deck is not sold at a loss. The initial pricing for the 64 GB unit was barely profitable, but this quickly changed with production ramping up.
This was confirmed by Valve themselves in an interview that happened months after Gabe’s famous comments about the pricing.
So yes, Valve profits from the games too, but that’s not used to subsidize the Steam Deck’s price.
Yep, this is a good explanation of more of the nitty gritty of it in more granular detail!
When you can afford to eat some of the cost… or… you don’t have shareholders telling you not to do that… well, then you get good ole ‘how capitalism is supposed to work! ™’.
Problem of course being that uh, you can just chase the luxury market for greater profit margins, stop making shit for the poors… this can work well in the short/medium term, but in the long run… if everyone does that…
… then you destroy your customer base, and the entire economy, and probably yourself.
And that’s not even getting into how companies have their own version of ‘keeping up with the joneses’… its called going into massive debt to fund an expansion because your competitor just did that… and then going into more debt to finance a stock buyback… but hey nbd, companies can fail and go bankrupt, no problem, everyone other than those helming the ship get fucked, they get golden parachutes.
Sure would be neat if we maybe had some other kind of system idk
I think the big difference is that they seem to be optimizing for customer satisfaction where others are not.
My favorite example I use often is how the Steam Deck comes with a case. It’s free and there’s not even an option to not get it. They know you need one, they include it. The Switch doesn’t come with a case. They know you need one but they don’t care. You’ll buy one if you want it bad enough and that’s more revenue.
It’s just a different type of optimization.
I have a switch that never left the house, definitely not needed.
I’m sorry for your lo$$.
Don’t forget battery life. Most of those systems get some pretty awful battery life, or are comically large.
the two things that made the game boy a success: “good enough” system with a great battery life all for a great price
its partly windows, and partly 8 core AMD CCDs that handhelds dont need.
Lenovo was given a holy ball (Z2 go cpu, basically 4c/8t zen 3 cpu and 12 rdna 2 cu cores (as apposed to the zen 2 and 8 cu rdna2 the steam deck has) and if they priced it at 600 tops and go down from there. it would be extremely competitive.
lenovo is basically like nah, 750$ it is. and i think its the reverse (starts at 600 and goes up)
They have advantage of being able to sell at almost cost because they make so much on game sales. Like the other console vendors.
Actually kind of unfair business practice.
Ironically, leveraging this kind of tactic is what allowed Google, Amazon and Apple and Microsoft to become as huge as they did, as fast as they did.
Got a whole bunch of lines of business that can functionally subsidize other ventures, so they can make a push for market share.
But of course this doesn’t take too long to turn your whole economy into oligopoly, and thus your society into oligarchy… at best.
I… I think Gabe really just isn’t as fundamentally awful of a person as most other tech company heads.
Yeah, he’s got a yacht, but he could be so, so much fucking worse…
I mean that’s just how consoles are, except Valve does let you just use it as a normal pc so you can use other stores if you want to. Still an advantage to them