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Steam machine sales are abysmal, SteamOS may be dead in the water

Yesterday, Valve announced that it has shipped more than 500,000 Steam controllers since unveiling them in November. While that number sounds initially impressive for a brand new console and operating system, a closer analysis reveals it’s actually pretty bad.

Said analysis comes courtesy of Ars Technica, who contacted Valve to confirm that the 500K figure includes Steam Machines, all of which ship with a Steam Controller. Toss in SteamOS users who may have purchased a controller separately and people who bought more than one, and the actual number of Steam Machines sold since the platform formally launched last November could be significantly lower than 500K. That’s an extremely low figure compared with the millions of PS4s and Xbox Ones that Sony and MS have shipped since last November. While it may seem unfair to compare a brand new platform to established franchises, Valve explicitly stated that it wasn’t competing with PC gaming, but targeting the living room console industry.

Valve first announced Steam Machines and SteamOS 2.5 years ago, to great fanfare and with 13 manufacturing partners. Valve then delayed the platform launch into 2015, which had the side effect of killing a great deal of manufacturer interest. SteamOS is still receiving bug fixes, feature updates, and improved GPU support, but its small install base and low sales could trap the platform in a death spiral. Weak Steam Machine sales means lower developer interest and decreased willingness to launch on SteamOS. The platform may have also been hampered by its lack of exclusive titles and a general dearth of AAA games.

One striking difference between the Linux-compatible titles and their Windows 10 counterparts is how quickly prices fall on the Linux side of the equation. By Page 2 of the Linux list, game prices have fallen to $19.99. The Windows list, in contrast, is still pegged at $54.99 by the bottom of the second page. SteamOS has far fewer AAA games and many more indie titles, which may make developers nervous when they consider supporting the Linux-based operating system.

Valve and SteamOS have done great things for Linux gaming and encouraged the industry to support another major operating system. For most of the past 20 years, “Linux gaming” was practically an oxymoron, especially if you didn’t use Wine. Thanks to Valve, that’s no longer true; Linux gamers have a richer and more varied selection of games than they’ve ever had before.

The fundamental problem with SteamOS is that it’s trying to solve a problem that doesn’t exist. Back when Microsoft announced Windows 8, Gaben denounced the operating system in the strongest possible terms.

OEM margins weren’t the only thing Valve was concerned about back in 2012. The entire push behind SteamOS was predicated on the belief that Microsoft might lock game installations to the Windows Store or force developers to sell through its own platform. Such a maneuver would have been a catastrophe for Valve, which currently controls a significant share of PC gaming revenue. When that threat failed to materialize in Windows 8 or Windows 10, some of the fire went out of SteamOS. It doesn’t help that the OS is also much slower than Windows 10 in many games, even when testing titles based on Valve’s Source engine.

If Microsoft had pushed such draconian rules from the outset with Windows 8, gamers might have responded by flooding to Linux and SteamOS. Since that didn’t happen, the use case for SteamOS as opposed to Windows is fundamentally weak unless you’re a PC gamer looking for a Linux-based console that can run a wide variety of PC indie titles and a smallish handful of AAA games. There aren’t a whole lot of people that fit that criteria. Unless Microsoft does something extraordinary evil, general gamers aren’t too likely to pick up a console-like PC with limited support for AAA titles.

Valve and SteamOS have done a tremendous job of establishing Linux as a gaming operating system, but SteamOS is in a tough place right now. OpenGL and Vulkan performance still lag Windows 10, at least in some titles, and OEM support for the OS has dropped off considerably since the initial announcement. Valve can continue to polish its OS, but it’s not clear very many people are going to use it or even have the chance to buy it from a PC OEM as opposed to rolling their own installation.

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