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How Valve's Steam Box will reinvent the game console as you know it

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Update: On Monday, September 23rd, Valve announced a crucial component of its push for the living room: SteamOS. With two additional announcements teased for the coming days, we're expecting to get a first look at Valve's official Steam Box hardware this week. Stay tuned to our StoryStream for the latest news.

Original Story: Valve's Steam Box is coming, and if the company behind Half-Life, Portal, and Team Fortress 2 gets it right, the next gaming console in your living room could be much different — and more compelling — than your Xbox, PlayStation, Wii, or PC.

Valve is trying to build a game console that you haven’t seen before: something that brings the PC (the big thing sitting on your desk) and the traditional console (the little thing sitting under your TV) together into a single device. A device that will run Valve’s Steam platform: the biggest digital game distribution service on the market, with upwards of 50 million users. (By comparison, Xbox Live has somewhere around 40 million subscribers.) But what does that really mean?

If you know any PC or console gamers, they’re sure to have some talking points on hand about why their gaming platform of choice is the platform to have. That’s because PCs and traditional gaming consoles each have a lot to offer for everyone who likes playing games. Consoles are easy to set up and play, great for gaming with friends and family, and comfortable to use (just try using a keyboard and mouse on the couch). Lots of people can hook up a Wii or an Xbox to the television, pop in a disc, and start playing without a huge learning curve. And while console games are usually more expensive, consoles cost much less than powerful gaming PCs upfront (high-end gaming PCs can cost thousands of dollars).

On the other hand, PC gaming has better-looking graphics that you can’t get on consoles, lots of ways to customize the look and feel of games to your liking, and more options for original content, like free games you can play in your web browser. PC gaming has also embraced the cloud in recent years, allowing users to completely ditch physical media — PC gamers can choose to never worry about losing or breaking a disc again. Did I mention great-looking graphics? Good, because they’re really great.

Based on what Valve has told us, its Steam box will — like a console — be something small and quiet that you can fit near your television while you kick back on the couch with a wireless controller. Like a PC, it will let you buy and download your games as many times as you want without needing any discs, and choose from a vast library of free game customizations. The Steam Box will also include a few unique twists, like controllers that can passively sense your feelings (biometrics), and wireless technology that can connect the console to several rooms and screens in your house at the same time.

Valve is shopping for the right ingredients — the features, parts, and partners — to make the Steam Box a reality. But why would a software company like Valve, known for its game-making chops, want to bake its own consoles and controllers? Let’s look back at 2012 to find out.

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Searching for answers

Hungry for answers

What are you cooking up back there, Valve?
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Controller

Controller

A trail of candy sprinkles

Valve has always been a software company. It has several highly-acclaimed game franchises in its portfolio; the Half-Life franchise as a whole has sold more than 30 million copies. It creates game development tools for professionals, and for independent developers and hobbyists. And, of course, it has the biggest digital game platform on the market with Steam. Despite this focus, whispers began to circulate last year that Valve might break the software streak by building its own gaming equipment. What if Valve was about to make its own gaming console?

Rumors of a "Steam Box" began to crystallize last March, when sources told The Verge that the company had been tossing around the idea of creating a set-top console that could compete with the Xbox 360 and PlayStation 3. Here’s what we knew nearly one year ago:

  • The Steam Box would be a blueprint. Initial sources told us that Valve was working on a blueprint for a console-like PC that would run any standard PC game title. Valve would team up with partners to actually create the boxes, which, like the console in your living room, would have a basic set of specifications to ensure a consistent experience. This would put Steam at the center of a new hardware universe, sort of like what Google did with Android: get a lot of partners on board, all using Valve’s software.
  • The Steam Box would have fresh inputs and outputs. By the time we received our tip, Valve had already expressed interest in making controllers with biometrics. Those controllers would be different than motion controllers like Kinect, PlayStation Move, and the Wii Remote, because they could grab data from your body without requiring conscious effort from the user. That means games using the technology would be able to respond to your physical and emotional states.
  • Valve was already working on getting Steam in the living room. Valve had already announced "Big Picture Mode," which converts Steam into a TV-friendly interface, making it more convenient for PC gamers to hook their machines up to televisions. That’s an obvious early step if you’re trying to make a console for the living room.

For the rest of the year, the company was mostly quiet — leaving only a few tasty crumbs along the way to tease us with the possibility of Valve-created hardware. Like this job listing, posted in April, which asked for an electronics engineer with experience in prototyping and hardware design. Or this post from Valve developer Michael Abrash that revealed Valve was working on a wearable computing project. Or this job listing from September, in which Valve wrote that "we’re frustrated by the lack of innovation in the computer hardware space, so we’re jumping in." But jumping into what? It’s clear the company was hungry for hardware, but it left us hungry for answers.

We wouldn’t find out about the big dessert Valve was making — the Steam Box — until we ran into an elusive creature in the Nevada desert.


CES CONFECTIONS

Valve had a Steam-branded booth on the show floor of CES 2013, but it wasn’t for showing off a product to the public or meeting with the press. We were initially told the company solely went to the convention to meet with hardware partners. It was clear Valve had some type of prototype PC out on display, but nobody was ready to tell us what it was.

Until we ran into Gabe Newell.

In an exclusive, wide-ranging interview with The Verge, Newell told us the Steam Box is real, and that it’s coming. The rumors were true: the Steam Box is a blueprint for a PC gaming console that partners can use to build and sell their own devices.

Newell told us that Valve wants to define three types of Steam Box hardware: "Good, Better," and "Best."

A Good platform might run you around $99, but Newell told he he hopes they’ll eventually be offered for free. For such a low price, there’s a catch: these Steam Boxes are intended to be a "very low-cost streaming solution," which means you'll need another more powerful PC in the house to stream games. Newell also said casual gaming could quickly be available on this end, which means a Good box will probably play casual games — games like the ones you might play in your browser, or on your smartphone. There’s still a lot we don’t know about devices in this tier, but the impression we got from Newell is that a Good box could be something like the Ouya, which is a small, $109 Android-powered game console that plays mobile games on the TV.

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A Better device is expected to cost around $300, which is about what a basic Xbox 360 cost when it launched. Newell told us this tier will feature advanced processors and graphics cards, which means that it should be able to play most PC games, with graphics that could be better than anything Microsoft, Sony, or Nintendo have (or will) offer. He also said that, like consoles, devices in this tier should be small and quiet; "[Valve’s position is:] let’s build a thing that’s quiet and focuses on high performance and appropriate form factors," Newell told us. There’s no obvious catch we’re aware of yet for this tier, except that it might be tough to actually sell a capable machine for just $300 (more on that later).

Valve wants to define three types of Steam Box hardware: "Good, Better," and "Best"

Based on what Newell told us, the Best tier really just seems like what PC gamers are already familiar with; it’s basically a PC with whatever Steam Box manufacturers want to throw in — whether that’s a ridiculously expensive graphics card, an optical drive, a huge case, or something else that can’t be sold for $300 or meet Valve’s Better specifications. That means gamers and manufacturers will still be able to build their own crazy PC gaming systems.

"But wait," you might say, "how are these confusing tiers better than a traditional console?" That’s a good question, but there’s one clear message we got from Newell at CES: Better is really best. After all, the "Best" tier that Newell described is the status-quo in PC gaming: an extreme range of different devices at various prices. That’s not what Valve’s really trying to create.

Newell confirmed to us that Valve would be making its own Steam Box: a Better box, based on the Linux operating system, with a recipe it hopes others will borrow.

The Steam Box recipe

Gabe Newell's Steam Box recipe

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In a small bowl, add equal measures of Linux, Steam, and Big Picture Mode. Add eight wireless controllers, with a dash of biometric feedback. Sprinkle in player-made Team Fortress hats and Portal 2 levels. Mix thoroughly, then pour yourself onto the sofa.

Building the ideal Steam Box is a lot like building an elaborate cake, and Valve’s already got a pantry full of ingredients. Let’s take a look at the essentials.

A great couch experience

Valve wants to make the PC as easy to use in the living room as a console. PCs have never really been convenient in the living room, at least not as convenient as the latest consoles that are specifically designed for big television screens and wireless control from your couch.

It used to be a pain just to hook a PC up to a television. HDMI made the step of hooking PCs up to televisions much easier, but that’s still just the tip of the iceberg. If you’ve ever taken the time to hook a PC up to a television, you probably noticed that it just doesn’t look very good. It’s difficult to use a desktop environment on even decent-looking televisions; text is usually hard to read and it’s just not a great experience overall for the average user. Sure, you can fiddle with settings in the operating system, and tweak individual applications to look better on TV screens, but that seems like an unnecessary hassle. Consoles are great because they allow you to get right to the meat of the experience; you press the power button, pop in a disc, and you’re there, without different programs to load or visual settings to adjust.

Consoles are great because they allow you to get right to the meat of the experience

That’s where Big Picture Mode comes in. Big Picture Mode was released for all Steam users in December, and it’s a feature that quickly turns Steam into a TV-friendly interface with text that’s easier to read, and a tile-based interface that you could almost confuse for the Xbox 360. And if you want to, you can already control Big Picture Mode with a wireless gamepad.

Newell told us that Valve plans on letting Steam run the show, and that even though the core operating system will be Linux, its Steam Box will boot directly to Big Picture Mode. Users won’t see Linux at all, unless they want to.



The cake is nigh
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New ways to interact

New ways to interact

Valve wants to give gamers something different than the motion controls that Nintendo, Microsoft, and Sony have raced to create in recent years. Newell told us that he’s not particularly impressed with motion control, and that Valve wants to take advantage of advances in technology that can allow games to respond to your body in deeper ways, like adjusting the flow of a game based on your emotions.

Imagine if zombies in the next 'Left 4 Dead' could literally sense your fear

It sounds like getting that kind of biometric feedback in a game would be a big leap, but Valve has worked on responding to players in sophisticated ways in popular games it already has on the market. The company invented an "AI Director" for its Left 4 Dead series that’s like a virtual Dungeon Master; the game can look at each player’s unique situation, like where they’re located and how much health they’ve got, and adjust the flow of the game on the fly to create new experiences in each playthrough. Biometric feedback is a logical extension of that system; it just adds more data points. Imagine if zombies in the next Left 4 Dead could literally sense your fear.

The technology that can make that happen is already out there: Tobii showed off some exciting improvements to its gaze-tracking tech this year, and biometric sensors in unobtrusive fitness and health devices flooded the show floor at CES 2013. It won’t be a stretch for Valve to incorporate these features in the Steam Box, since they’re already on the market.

To its credit, Nintendo has already explored biometric feedback with the Wii Vitality Sensor: a fingertip sensor that measures a player’s pulse. But who wants to wear something they put on your finger at the hospital? Microsoft and Sony still have the opportunity to provide creative new inputs in their next-gen consoles, but we haven’t seen what they’re planning yet.

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Consoles have been getting the bad parts of PCs for a while. Isn't it time they get the good?

Steam's killer features

Steam is the biggest digital gaming distribution platform out there, and that might be because it’s a robust, mature piece of software that looks very good next to Xbox Live, the PlayStation Network, and Nintendo’s online services. A lot of that has to do with the mass of content available in the PC ecosystem, but Steam also has a number of solid core features that make it very competitive: you can have your games updated automatically, use two-step authentication to protect your account, chat with friends in-game with text or voice, create and join communities, and more.

Where Steam really surpasses the current crop of consoles is in software delivery. Steam is a virtual locker for your games, allowing users to download them to directly to computers that have Steam installed with no discs required. The platform keeps the games you’ve downloaded and installed updated automatically, and can also store your saved games centrally, allowing you to resume them on other devices. That’s all made possible by the fact that storage is dirt cheap for PCs these days — discs could have been dead years ago, but consoles tend to come around after several generations of PC hardware advances have passed.

Consoles and handhelds also make users update with patches now, but the experience doesn't always have console-like simplicity, and can be much more of a hassle than updating software on the PC. Nintendo shipped the Wii U without online functionality, requiring a huge day one patch that ended up "bricking" some people's consoles, rendering them useless.

It’s already a given that the eponymous Steam Box will run Steam, but it’s still one of the biggest ways a console could immediately benefit from innovations in the PC gaming world.

The content you want

If Valve wants to merge the PC and the console, it can’t take away the most important content from each side. That means it needs to offer plenty of digital media like TV and movies, big-name games, and independent content like game mods and community-created items.

Shows & Music

We don’t know much about how Valve plans to handle multimedia yet — it has to compete with offerings like Xbox Music and Movies — but based on what we’ve heard it seems like it’s taking a hands-off approach right now. When asked about Netflix on the Steam Box, Newell said "oh absolutely. You can fire up a web browser, you can do whatever you want." That means the Steam Box will be able to run anything you already get over the web, whether it’s Netflix, Hulu, or even Spotify.

Games

Big name games and exclusives could be Valve’s biggest challenge (more on that later). But the company could kickstart things by offering its own exclusives for the Steam Box, like, say, Half-Life 3, Portal 3, or the next Left 4 Dead. The company already used its own titles to Steam’s advantage back in 2003 when Half-Life 2 was in high-demand, and Steam wasn’t quite as popular as it is today.

While we haven’t heard anything about acquisitions, Valve could also make more targeted grabs. The company has picked up popular games in the past, including Counter-Strike and Day of Defeat, which were built on freely-available Valve technology. The company has also looked outside of its own platform for new ideas; in 2010, Valve announced it would make DOTA 2: a sequel to the Defense of the Ancients mod originally built for rival game developer Blizzard’s Warcraft III.

Nowalls

A console without walls

There’s a big opportunity for Valve to capitalize on content that has never been able to penetrate the console market as effectively as big-budget titles. Unlike consoles, PCs have been an incubator for individual creativity, allowing virtually anybody with the know-how to remix existing content and give it to other people for free.

Mods

Mods range from simple tweaks to existing games, to full-blown overhauls that totally change the experience of stuff you already own. While Counter-Strike and DOTA 2 are examples of how mods with humble origins can make it to the big leagues, Valve doesn’t need to acquire and develop mods to make them valuable to players.

Modifications are in Valve’s DNA. The company has proactively supported independent creators and encouraged them to modify and remix Valve’s own software, providing them with robust game engines, content creation tools, and APIs that allow them to benefit from Steam’s backend services. Counter-Strike started off a modest first-person team-based shooter that blossomed into a worldwide hit before Valve ever touched it.

Some console gamers have also worked on getting mods and other "homebrew" content onto their platforms of choice, but console makers have actively discouraged and attempted to block that kind of content for various reasons. Valve can change all that simply by getting Steam into the living room.

Player-created content

While mods would make a great addition to the console experience, content creation doesn’t just have to come from skilled programmers and artists — it can come from the players themselves.

Intuitive content creation tools can give Valve an edge with the Steam Box, especially if they allow gamers to modify and remix their games with ease. The Portal 2 level editor, which lets players create their own test chambers and challenges, is an excellent example of the kind of tool Valve can introduce (or encourage developers to offer) to empower players and open up their creativity.

Content creation isn’t just for the PC, but it’s more of an exception on consoles. PlayStation 3’s LittleBigPlanet is a great example of where community-created content can go right, and Sony might be taking its success into account for its next console.

Stores and Sharing

Evidence of the popularity of community-created content is plainly visible. The Steam Workshop, Valve's store for extended game content and community-created DLC, is already thriving. At the time of this writing, there are 13,171 custom items available just for Skyrim. It wouldn’t be difficult to extend this to the Steam Box; it’s already on Steam.

Valve also wants to promote community generated content with more user-created stores on Steam. Newell told us that "anybody should be able to create a store, and it should be about extra entertainment value." Newell said that "an editorial filter is fine, but there should be a bunch of editorial filters. Some people will create team stores, some people will create Sony stores, some people will create stores with only games that they think will meet their quality bar. Somebody is going to create a store that says 'these are the worst games on Steam.'" That’s not available on traditional consoles, which require you to buy official games from places like Best Buy or Gamestop, or from official stores like the Xbox Games Store or the PlayStation Network Store that are managed exclusively by Microsoft and Sony.

Sony and Microsoft could certainly wise up to the potential of community generated content for next-generation consoles, but even then they’ll be playing catch-up to what’s already available on the PC.


The right hardware at the right price

Certified hardware: Better is best

For years, PC gaming has been troubled by the insane diversity of hardware on the market. There’s no guarantee that the PC game you want to buy will work on your computer, and there are lots of games that won’t work on older PCs, or PCs that are missing just a single critical component (like a graphics card with enough horsepower). As a result, PC games can have wildly different system requirements — ranging from Flash games in the browser that can be played on almost any PC, to games with next-generation graphics that push the limits of even the most expensive and capable graphics cards.

Nobody with an Xbox 360 has ever had to worry if the latest 'Call of Duty' game would be able to run on their system

This reality is encapsulated well in a meme you’ve probably come across if you’ve spent any time in online gaming forums or comment sections since 2007: "will it run Crysis?" Crysis stunned gamers with gorgeous graphics, but when it first came out, only a small set of PC gamers with the right (read: expensive) equipment could enjoy the game’s stunning visuals. Nobody with an Xbox 360 has ever had to worry if the latest Call of Duty game would be able to run on their system.

A Steam Box with certified hardware could help console players, or anyone who doesn’t really care about specs, to jump into PC gaming without fussing over which components to buy, or having to choose between endless pre-made computers from PC makers like Dell, Alienware, or HP. It’s not the first time a minimum spec been attempted — the PC Gaming Alliance promised to create a baseline for gaming PCs that would be updated every few years — but Valve has a lot of things the PC Gaming Alliance didn’t: including a killer platform in Steam, and more than 50 million users to back it up.

Key Partners

What Valve still needs are deep partnerships to make its Steam Box a reality at a $300 price point, and there are a couple of key opportunities it could take advantage of. One of those opportunities is with graphics card-maker Nvidia, which is attacking the living room in its own way with the project Shield gaming handheld. Shield can play PC games, including those on Steam, and it even supports Steam’s Big Picture Mode: you can hook the Shield up to your television and use it like a gaming console. But the Shield will be expensive, and so, like expensive gaming PCs, it’s not going to find its way into everyone’s living room. That means Nvidia could again miss out on getting its graphics cards into the next generation of living room consoles — unless it finds a promising partnership to get them there. Valve’s Steam Box could be an answer.

Another big cost-sucking component is a system’s central processor. Right now, Intel has a pretty good grip on the PC gaming market (and the consumer PC market in general), but it hasn't had chips in a major console since the original Xbox. A deep partnership between Valve and Intel could give Intel a foot in the door in the console world. There could be some cannibalization of the PC market that Intel already supplies, but if Valve can capture gamers that would otherwise buy an Xbox, PlayStation, or Wii, it could be a net gain for Intel.

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Icing

Icing

Valve can make a killer game console with killer features, but it would still just have a half-baked product without some help from friends. Now that Valve’s cards are on the table, it’s up to game developers and publishers to respond.

One of Valve’s biggest challenges with the Steam Box is to convince developers that it’s a good idea to make games for Linux. Most PC games are currently built for Windows, and there’s (currently) no magical incantation that can easily convert games to Linux. Developers already have plenty of platforms to make games for, and adding Linux into the mix just adds more potential costs.

So why is Valve going with Linux? As my colleague Sean Hollister noted in November, Valve’s Big Picture Mode isn’t enough to turn Steam into a game console, since it doesn’t own the Mac or Windows operating system that’s typically underneath it. Since Apple doesn’t license its operating system to third parties, that means Valve would ultimately be at the mercy of Microsoft — a direct competitor — if it chose to put Windows on its Steam Box. And a Windows Store that’s locked down like the App Store could encroach on Steam’s profits and viability. Regardless of Newell’s philosophical position on open-versus-closed systems, relying on the good graces of Microsoft and Apple to support your digital distribution platform is not a great long-term business strategy.

The big three console masters — Nintendo, Sony, and Microsoft — are likely to push back against the Steam Box in the living room. They already have strong relationships with developers, and could try to rein some of them with various incentives in to focus on their platforms. Soon after our exclusive interview with Gabe Newell broke, Phil Harrison, a Microsoft Studios executive and former PlayStation development head, was bearish on Valve’s prospects. "They can be successful at small scale," Harrison told Gamasutra, "but it’s very rare for a new hardware entrant to get to scale."

Electronic Arts, a direct competitor to Valve in the digital game distribution business, and a company that’s investing big in the next consoles from Microsoft and Sony, is also skeptical. On a recent investor call, EA CEO John Riccitello praised Gabe Newell, but cautioned against hyping the Steam Box; he said Valve "really hasn’t put enough information out there to suggest whether or not they’ve got the wherewithal to compete in console," and that it could be anything from a niche product, to a product that "actually has the shoulders to help move our industry forward."

There’s no guarantee that the box next to your TV in a few years will be made by Microsoft, Sony, or Nintendo

Companies like EA and Microsoft have good reasons to be concerned with Valve in the living room; the Steam Box could cut into their profits. And while Valve will receive similar pushback elsewhere, it doesn’t need everyone on board to succeed. As Sean pointed out, the company can woo game developers with cool controller concepts, great development tools, and a store that can help them profit from their work.

Fortunes change quickly in the technology world, and there’s no guarantee that the box next to your TV in a few years will be made by Microsoft, Sony, or Nintendo. Your living room console in the future might be made by Valve, or Nvidia, or even Apple. In fact, Newell thinks Apple is the Steam Box’s biggest threat; he said recently that "Apple has gained a huge amount of market share, and has a relatively obvious pathway toward entering the living room with their platform." To compete with Apple's potential threat, Valve is also looking at how it can integrate mobile gaming into the future of Steam.

When we asked Newell at CES if he thought Valve could really compete with the big console gaming incumbents, he shrugged them off. "If you do something that is cool, that's actually worth people's time" he told us, "then they'll adopt it." If Valve sticks to its recipe, the Steam Box will have the best of both the PC and console gaming worlds. And what's cooler than that?

Sean Hollister contributed to this report.

Big Picture Mode isn't enough to turn Steam into a gaming console


The Verge
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