Why Valve is Doing SteamOS

Lots of people question why Valve wants to make SteamOS, Steam Machines, Steam Link, Steam Controllers. But Valve has been pretty open about their reasons. They are in several businesses:

  1. Making games
  2. Making game engines
  3. Selling games

They probably make the most off the third, but they still do the first two. But the third is a driver of decisions for them. They surely ask, as any business, “how do we expand?” To sell more games requires more people buying games. And as the PC declines a bit, that means other platforms.

Mobile, although increasing in power and certainly ubiquitous, is not currently a prime target. The living room is. The living room is a proven gaming environment. The living room has the big screen and the comfy couch. It makes a lot of sense for a gaming company to want to be there.

This same logic is driving decisions about engine design, not just for Valve but across the industry. Making content easier to create means a larger market with more lottery tickets to win consumer dollars. It makes the platform broader and expands what gaming means. So does game streaming, which is becoming more popular.

Other businesses could learn a lot from Valve and the gaming industry in this regard. Building out transport and lowering the friction to relocate to new opportunities would do wonders for the economy. Valve is doing both of those, in their own way, in their own market, with SteamOS.

By making a living room PC platform, they’re bridging a divide between two long-isolated groups: console gamers and PC gamers. With SteamOS in the living room, people will actually be able to play against mouse-and-keyboard gamers (either with a Steam Controller or with a mouse and keyboard).

At the same time, the console makers are pushing their own initiatives to do the same. But at present it’s not clear if you will be able to buy a game for a console and play it on a PC. And even if you can, how widespread will that option be?

Valve has some challenges. They have to make sure the SteamOS platform has feature parity with consoles. That means video streaming and music. It means actively courting games to be on Linux and making sure drivers are up to the job. It even means working on better APIs like Vulkan to ensure a cleaner development-to-market process.

But they have advantages as well. The Steam Machine market is a market, not a single offering from one company. Consumers can decide when to upgrade, how much to spend, and so on. They’re delivering competition and choice to consumers and betting the consumers will make the right choices for them.

At the end of the day, Valve is working to expand their market. They are doing that to make more money, but they seem to be doing it in a way that is smart enough to mean more money for others too. And that’s what good capitalism should focus on.