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Valve Crashes Microsoft’s Holiday Gaming Party

Steam Box console targets MSFT more directly than SNE or NTDOY

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This coming holiday season is important for Microsoft (MSFT) and Sony (SNE). Both technology giants are releasing next-generation video game consoles just in time for Christmas shopping.

MSFT and SNE sold 80.4 million and 78.2 million units of their Playstation 3 and Xbox 360 consoles and Nintendo (NTDOY) — the venerable Japanese game maker that sold more than 100 million of the previous generation Wii consoles — is badly stumbling with its Wii U follow up. The Xbox One and Playstation 4 seemed poised to deliver killer holiday quarters, and we’ve even been speculating about the possibility Apple (AAPL) might play spoiler with a games-enabled Apple TV, but that’s a bit of a long shot.

Now Valve has pulled the trigger on its long-awaited Steam Box initiative and is crashing the video game console party. And while Sony will take a hit if the Steam Box succeeds, Microsoft is the one that seems to be directly in Valve’s crosshairs.

We’ve written about Steam Box before. Valve was making noise about it last year, and it teased its upcoming video game streaming device — the Steam Box — at this year’s Consumer Electronics Show.

Until recently, it had all been rather nebulous and smelled faintly of an attempt to distract from the upcoming next-gen video game console launches. It’s no secret Valve has been unhappy with Microsoft’s decisions of late, particularly the move to an online app store with Windows 8 that threatens Valve’s Steam business of selling PC games online. Valve founder and CEO (and former Microsoft employee) Gabe Newell went on record last year as saying “Windows 8 is a catastrophe for everyone in the PC space.

Historically, several key issues have held PC gaming back from displacing video game consoles:

PCs were expensive and oversized compared to consoles. No one wants a massive tower PC and all its peripherals in front of the TV. Valve is releasing its prototype Steam Box in October, and it’s optimized for the living room. That means it’s small, affordable and powerful enough to play PC games. Multiple hardware manufacturers will be releasing their own versions in 2014 at a variety of price points. Unlike consoles, those systems will be user-upgradable.

PC games featured high resolution graphics requiring HD computer monitors. Playing a PC game on a CRT TV was miserable — if you could get it to work at all. Current 1080p HDTVs and new 4K UltraHD TVs have the resolution and speed to display PC graphics without compromise.

PC games were developed to use the input systems of a computer — namely the keyboard and mouse. Valve just announced the new Steam Controller, a wireless device with circular trackpads instead of joysticks, a touchscreen and 16 buttons. It’s designed to replace a keyboard and mouse, although Valve says Steam will continue to support the classic PC setup for users who prefer it.

In addition, Valve has developed its own operating system: Steam OS.

Article printed from InvestorPlace Media,

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