Fair pricing means a reasonable profit on the base cost. Trying to gauge what people are willing to pay means that you want to maximise your profit at all costs, consumers be damned.
I understand that’s what Americans consider “fair”, but I don’t fully agree.
Fair pricing means a reasonable profit on the base cost.
Under many circumstances, this is true. However, console makers have historically sold consoles either at or slightly below cost, expecting to make their real profits on game sales, online store sales, etc… In the business world, it’s called a loss leader. Meaning it’s something popular that the company takes a loss on, while expecting it to encourage more sales elsewhere.
The classic grocery store example is a rotisserie chicken. You can go get a whole rotisserie chicken from the grocery store deli for like $3. It’s so cheap because the store is selling it at a loss. It’s a loss leader. Very few people will simply buy the chicken by itself. Instead, they’ll buy a tub of potato salad, some roasted corn, a can of green beans, and a gallon jug of sweet tea to go along with it. By selling that chicken at a slight loss, they were able to get the customer to buy all of those other things at a profit.
That being said, Valve has already stated that they’re not planning on having the Machine be a loss leader. Which is why people expect it to cost as much as a prebuilt with similar specs.
In most cases, yes. But you have to remember, this is Valve and not some ordinary company. They have extremely deep wallets and a lot of responsibility and expectations on their shoulders (importantly, not the stock market!). If they charged what it cost for hardware and what it cost them to do r&d, it would likely not be in consumers favor.
Like even just get off the American-bad thing for one second: pricing it as a standalone pc basically just means “the cost of the parts”. They’ve put a lot of time and effort into this across their core employees and likely outsourced stuff because they couldn’t, in-house. Actually listening to people and charging relative to that is actually a great way to be fair and make people happy, guaranteeing positive impact of your product. I guarantee they’re paying attention to what people say ALL over the place. Like… Why do you think “it’s done when it’s done” is their pace?
Research and development is probably very high when you consider Proton, SteamOS, and the semi-custom CPU and GPU. Something between $50 to $100 million would be typical. Silicone is famously expensive in R&D, Proton has continuous costs (and has for quite a while now) that rack up, and SteamOS is literally an operating system. That’s a lot of salaries to pay.
I reckon they’re taking advantage of being private and playing the long game. Very, very long game. They’re not really in danger as long as Steam is successful, but I can’t blame them for wanting a decent gross margin so they can at least cover hardware costs. Especially with memory prices right now, I wouldn’t be surprised at 1000€ here in Germany, though I wouldn’t be happy about it. I would happily buy at 900€ (≈$1040), and be ecstatic at 800€ (≈$920).
If it is priced higher than $600 they won’t sell enough to justify their existence. It will just be a repeat of last time.
This is perfect for people wanting a new console with a large games library, but Valve seems to be trying to force the square block in the round hole by placing it in the PC market space.
Why? Look at how many people here say they want Steam OS, and Lemmy skews heavy toward Linux users. This is that, but OOTB.
I don’t think it’ll sell anywhere near as well as the Steam Deck, but it’s also a less exciting form factor. I do think it’ll sell a fair number of units though.
The cheapest equivalent prebuilt I can find with similar specs (RX 7600 is slightly better than the Steam Machine) is $850, and a DIY build is more like $900 (lots of corners cut), so there’s probably not much margin on the prebuilt. Valve is probably saving some cash with their custom CPU, and they’re probably shipping it with a Steam Controller, hence the $800 target. If component prices rise significantly before launch, I could see $1k.
It depends on how many Valve have already manufactured. If they were smart they’ll be quietly manufacturing these and only just now announced it. You don’t announce a product until you’ve got some units sitting in a warehouse somewhere, or else a competitor might see the opportunity to make things difficult for you.
That’s a bad take. Look at PC prices. What equivalent PC could you build for $1000? This is going to be 800+ and still the best value in the PC market. Until they get steam OS on arm and you can put it in a 600 Mac mini.
An equivalent PC would have a full fat non-mobile graphics card. They keep trying to claim it’ll do 60 FPS at 4K with AI upscaling. Which is the same as saying it’ll do 60 FPS at 1080p.
This would be a compelling product as a console, the PC capable parts are a nice bonus but no one’s going to be buying this to be their primary computer unless they are going to replace a potato.
Regardless of what the market is doing if it’s anything more than $700 it’ll flop. Which would be an incredible shame but it is what it is. No one is going to pay $1,000 for a PC that cannot be upgraded.
I don’t think this is accurate. The majority of IRL gamers I know are casual people with crappy Minecraft-level pre-builts (hugely overpriced usually; I know someone who spent 1.1k on a 3060 Ti pre-built) or 10 year-old computers built by their neighbors. A lot of casual gamers exist and the steam machine will be very appealing to them as an easy upgrade.
In a way, you’re right. A lot of people will be upgrading potatoes. Or replacing thin air next to their TV’s.
Even I, with a custom built with a 7900 XT running openSUSE TW, am considering this for doing stuff in the living room (or similar, I live in a tiny apartment lol) with friends or just casual-TV gaming and media. I don’t have that right now, and even 900€ sounds appealing for doing that with a Linux-based computer (and gamescope!!!, which I can’t get working on my device) I have full control over, but know will work.
I don’t know of something equivalently priced, but it there is something, please tell me. I think they have a market here. I personally, at least, have been waiting years for something like this to recommend to friends and to an extent to myself.
Equivalent doesn’t mean much when it’s not a standard, upgradable PC. This device competes with consoles, not desktop PCs, and needs to be in that price bracket, as the equivalence is not on the hardware or performance, but just “can it play current-gen games?”
They’re letting us discuss this ad nauseam just to understand what prices people consider acceptable for these devices
I suspect it’s because of the uncertainty over tariffs. Ironically making manufacturing in the US less appetising for businesses.
I doubt it. I think they understand that the hardware market is volatile and what might cost $800 now might be $1000 in a few months.
100%
But that’s not a terrible thing, I suppose.
Absolutely. I think 80$ for the full package seems fair.
$70 if you hand deliver it to me. It’s my final offer.
$60? why do they want $50 for something that’s clearly $10?
Fair pricing means a reasonable profit on the base cost. Trying to gauge what people are willing to pay means that you want to maximise your profit at all costs, consumers be damned.
I understand that’s what Americans consider “fair”, but I don’t fully agree.
Under many circumstances, this is true. However, console makers have historically sold consoles either at or slightly below cost, expecting to make their real profits on game sales, online store sales, etc… In the business world, it’s called a loss leader. Meaning it’s something popular that the company takes a loss on, while expecting it to encourage more sales elsewhere.
The classic grocery store example is a rotisserie chicken. You can go get a whole rotisserie chicken from the grocery store deli for like $3. It’s so cheap because the store is selling it at a loss. It’s a loss leader. Very few people will simply buy the chicken by itself. Instead, they’ll buy a tub of potato salad, some roasted corn, a can of green beans, and a gallon jug of sweet tea to go along with it. By selling that chicken at a slight loss, they were able to get the customer to buy all of those other things at a profit.
That being said, Valve has already stated that they’re not planning on having the Machine be a loss leader. Which is why people expect it to cost as much as a prebuilt with similar specs.
In most cases, yes. But you have to remember, this is Valve and not some ordinary company. They have extremely deep wallets and a lot of responsibility and expectations on their shoulders (importantly, not the stock market!). If they charged what it cost for hardware and what it cost them to do r&d, it would likely not be in consumers favor.
Like even just get off the American-bad thing for one second: pricing it as a standalone pc basically just means “the cost of the parts”. They’ve put a lot of time and effort into this across their core employees and likely outsourced stuff because they couldn’t, in-house. Actually listening to people and charging relative to that is actually a great way to be fair and make people happy, guaranteeing positive impact of your product. I guarantee they’re paying attention to what people say ALL over the place. Like… Why do you think “it’s done when it’s done” is their pace?
They’re buying the parts directly from the manufacturers though, so cutting out the retailer middle-man could offset the R&D costs.
Research and development is probably very high when you consider Proton, SteamOS, and the semi-custom CPU and GPU. Something between $50 to $100 million would be typical. Silicone is famously expensive in R&D, Proton has continuous costs (and has for quite a while now) that rack up, and SteamOS is literally an operating system. That’s a lot of salaries to pay.
I reckon they’re taking advantage of being private and playing the long game. Very, very long game. They’re not really in danger as long as Steam is successful, but I can’t blame them for wanting a decent gross margin so they can at least cover hardware costs. Especially with memory prices right now, I wouldn’t be surprised at 1000€ here in Germany, though I wouldn’t be happy about it. I would happily buy at 900€ (≈$1040), and be ecstatic at 800€ (≈$920).
Anything more than $500 and we riot!
You’ll have to deal with a cult that will defend their lord Gabe’s every move.
Get ready to riot because there’s no way it’s that cheap. My money is on $800-1000.
This is absolutely where it’s going to be.
If it is priced higher than $600 they won’t sell enough to justify their existence. It will just be a repeat of last time.
This is perfect for people wanting a new console with a large games library, but Valve seems to be trying to force the square block in the round hole by placing it in the PC market space.
Why? Look at how many people here say they want Steam OS, and Lemmy skews heavy toward Linux users. This is that, but OOTB.
I don’t think it’ll sell anywhere near as well as the Steam Deck, but it’s also a less exciting form factor. I do think it’ll sell a fair number of units though.
The cheapest equivalent prebuilt I can find with similar specs (RX 7600 is slightly better than the Steam Machine) is $850, and a DIY build is more like $900 (lots of corners cut), so there’s probably not much margin on the prebuilt. Valve is probably saving some cash with their custom CPU, and they’re probably shipping it with a Steam Controller, hence the $800 target. If component prices rise significantly before launch, I could see $1k.
It depends on how many Valve have already manufactured. If they were smart they’ll be quietly manufacturing these and only just now announced it. You don’t announce a product until you’ve got some units sitting in a warehouse somewhere, or else a competitor might see the opportunity to make things difficult for you.
That’s a bad take. Look at PC prices. What equivalent PC could you build for $1000? This is going to be 800+ and still the best value in the PC market. Until they get steam OS on arm and you can put it in a 600 Mac mini.
An equivalent PC would have a full fat non-mobile graphics card. They keep trying to claim it’ll do 60 FPS at 4K with AI upscaling. Which is the same as saying it’ll do 60 FPS at 1080p.
This would be a compelling product as a console, the PC capable parts are a nice bonus but no one’s going to be buying this to be their primary computer unless they are going to replace a potato.
Regardless of what the market is doing if it’s anything more than $700 it’ll flop. Which would be an incredible shame but it is what it is. No one is going to pay $1,000 for a PC that cannot be upgraded.
I don’t think this is accurate. The majority of IRL gamers I know are casual people with crappy Minecraft-level pre-builts (hugely overpriced usually; I know someone who spent 1.1k on a 3060 Ti pre-built) or 10 year-old computers built by their neighbors. A lot of casual gamers exist and the steam machine will be very appealing to them as an easy upgrade.
In a way, you’re right. A lot of people will be upgrading potatoes. Or replacing thin air next to their TV’s.
Even I, with a custom built with a 7900 XT running openSUSE TW, am considering this for doing stuff in the living room (or similar, I live in a tiny apartment lol) with friends or just casual-TV gaming and media. I don’t have that right now, and even 900€ sounds appealing for doing that with a Linux-based computer (and gamescope!!!, which I can’t get working on my device) I have full control over, but know will work.
I don’t know of something equivalently priced, but it there is something, please tell me. I think they have a market here. I personally, at least, have been waiting years for something like this to recommend to friends and to an extent to myself.
Equivalent doesn’t mean much when it’s not a standard, upgradable PC. This device competes with consoles, not desktop PCs, and needs to be in that price bracket, as the equivalence is not on the hardware or performance, but just “can it play current-gen games?”
It’s a good idea, tout the market before doing anything controversial