Valve's Steam Machine may be doomed by its own high component costs. The upcoming gaming PC box is facing a perfect storm of soaring RAM and storage prices, which could make it an unaffordable luxury for many consumers.
Analysts expect the price of the 512GB model to start at around $599, while the high-end 2TB version might cost upwards of $1,000. That would put it firmly out of reach of many gamers who are used to buying games and hardware from Sony or Microsoft for significantly less.
Valve is not an enormous player in the hardware space, which means it doesn't have the same kind of negotiating power as large console makers like Sony and Microsoft. This could make it harder for Valve to absorb the increasing cost of components and pass them on to consumers without taking a hit to profit margins.
However, some analysts believe that Valve's pricing strategy is not as straightforward as this. The company has already made significant investments in its supply chain and may be able to negotiate better prices with suppliers than smaller manufacturers. Additionally, selling the Steam Machine primarily through direct sales via the web and Steam itself eliminates the usual retailer markups that console makers have to take into account.
But even if Valve is able to get the best possible price for its components, some analysts believe that a high starting price of $700 or more could be "a death sentence" for the product. This would limit the audience for the Steam Machine and make it less competitive in the market.
In reality, the relative price difference between Valve and other console makers will still matter, even if the company is able to get a better price on its components. The analysts who spoke to Ars agree that Valve may have to price its Steam Machine above competitors like Sony and Microsoft, which could limit its appeal to consumers who are looking for a high-end gaming experience.
Ultimately, how Valve handles Steam Machine pricing will depend on whether the company wants to expand its audience beyond enthusiasts and into the territory currently held by PlayStation and Xbox. If it does, the memory cost shock may pose a challenge in terms of growth.
Analysts expect the price of the 512GB model to start at around $599, while the high-end 2TB version might cost upwards of $1,000. That would put it firmly out of reach of many gamers who are used to buying games and hardware from Sony or Microsoft for significantly less.
Valve is not an enormous player in the hardware space, which means it doesn't have the same kind of negotiating power as large console makers like Sony and Microsoft. This could make it harder for Valve to absorb the increasing cost of components and pass them on to consumers without taking a hit to profit margins.
However, some analysts believe that Valve's pricing strategy is not as straightforward as this. The company has already made significant investments in its supply chain and may be able to negotiate better prices with suppliers than smaller manufacturers. Additionally, selling the Steam Machine primarily through direct sales via the web and Steam itself eliminates the usual retailer markups that console makers have to take into account.
But even if Valve is able to get the best possible price for its components, some analysts believe that a high starting price of $700 or more could be "a death sentence" for the product. This would limit the audience for the Steam Machine and make it less competitive in the market.
In reality, the relative price difference between Valve and other console makers will still matter, even if the company is able to get a better price on its components. The analysts who spoke to Ars agree that Valve may have to price its Steam Machine above competitors like Sony and Microsoft, which could limit its appeal to consumers who are looking for a high-end gaming experience.
Ultimately, how Valve handles Steam Machine pricing will depend on whether the company wants to expand its audience beyond enthusiasts and into the territory currently held by PlayStation and Xbox. If it does, the memory cost shock may pose a challenge in terms of growth.
just thinking about buying one is giving me a headache 
512GB for $599? that's like buying a whole new gaming rig 
2TB version? forget about it 
maybe valve should just stick to what they do best - games 
. I mean, they're already making some big investments in their supply chain and all. And yeah, the prices might be a bit high for some people, but at the same time, the competition is pretty fierce out there. If Valve can get that price down to like $499 or something, it might not be so bad 
. But if they can't manage that, then yeah, the $700+ price tag could really limit its appeal.
. But at the same time, I know some of those pro gamers out there need that extra oomph. So it's a bit of a conundrum, right? 
I mean, I'm all for Valve trying to make the Steam Machine a thing, but they need to be realistic about what people are willing to shell out for. Maybe a more affordable option would be better, like a lower-end model or something 
They might need to rethink their pricing strategy or risk being left out in the cold. 
. Like, $599 for 512GB is already pretty steep, but adding more RAM and storage just means it'll be outta reach for most gamers 
. Maybe they can negotiate better deals with suppliers or something? Still, a starting price of $700+ could be like, totally dead in the water 
. It's all about how Valve wants to grow its audience and if they're willing to take a hit on profit margins for it...
that's like, way outta budget for most gamers 