Yesterday, Valve revealed the Steam Deck, a handheld gaming PC that is meant primarily for playing Steam games on the go. In its announcement, Valve confirmed that the Steam Deck will use a custom AMD Zen 2 CPU and a discrete RDNA 2 GPU, yet announced a starting price point of $399. That’s a pretty low price to pay to get into PC gaming, and it seems that Valve is going to feel it, as Gabe Newell has described that pricing as “very aggressive” and “painful.”
Speaking in an interview with IGN, Newell said that the most important thing about Steam Deck was getting the feel and performance correct, with pricing playing second fiddle. “I want to pick this up and say, oh, it all works,” Newell said. “It’s all fast. It’s all… and then price point was secondary and painful. But that was pretty clearly a critical aspect to it. But the first thing was the performance and the experience, [that] was the biggest and most fundamental constraint that was driving this.”
Newell told IGN that “very aggressive” pricing is needed to get ahead in the mobile space, and that’s precisely what the Steam Deck has. While he didn’t say how much profit Valve is making on Steam Deck – if it’s making any – it’s hard to believe that there’s much of a margin at all on a device with the Steam Deck’s spec sheet priced at $400.
Regardless, Newell told IGN that Valve is attempting to set the Steam Deck up for long-term success, even if that means slim or nonexistent margins. “Nobody has ever said, ‘Oh, we have a giant success where clearly there’s huge demand for this, but our margins are too thin.’ Right? And a lot of people have overpriced things and killed the opportunity, and sort of convince people that it’s an uninteresting category from the get-go,” he said. “So we’re definitely… our view is… we’re doing this for the long haul. And there’s a lot of opportunity.”
Of course, platform holders losing money on device sales – especially in the early days of their device’s lifespan – is nothing new in the gaming industry. However, it’s also worth keeping in mind that even if Valve will lose money on each Steam Deck sold, it still takes a cut of every game sold on Steam and every microtransaction processed using Steam’s payment systems. So if the Steam Deck ultimately helps sell more games through Steam, the Valve stands to make a pretty penny despite whatever losses it might experience on the hardware itself.
Steam Deck reservations open later today, though there’s some fine print you should consider before you reserve a handheld for yourself. Valve expects to begin shipping out Steam Deck purchases in December 2021 but hasn’t given us a specific release date yet.