*Putting on conspiracy cap*

Valve released the Steam Machines to thoroughly beta test the hardware, software, and to figure out their relations with various companies. The long term goal is to perfect the Steam Machines before the launch of Half-Life 3. Valve could opt to make HL3 a financial sacrifice by bundling up an extremely cheap Steam Bundle with HL3 - turning it into a launchpad for the platform. Furthermore, there are other aspects to further increasing the potency of the Steam Bundle: A store credit that is divided between games and movies to introduce customers to the ecosystem.

Not likely to happen, but the possibility isn't zero.

*Takes off cap*

The big question to me is how many units Valve had manufactured. Did they go down the path of SEGA and THQ by producing too much hardware at the wrong time, or have they tightly regulated production to control costs? I think that would shed light on Valve's position.

I often wonder which is better - a custom build gaming rig or some of these pre-build specifically for gaming machines. They seems a little more expansive (don't sure how much I'm not on the high end of gaming yet), but you're guaranteed excellent cooling and even some overclocking capabilities. Around here everybody brags about how they hyper overclocked their CPU and GPU, but when it's selling time everybody claims the part was never ever overclocked and even some official stores refuse warranty replacement if they found the part was overclocked (except the very high-end parts of course).

VALVe didn't limit the production of the hardware to be sold at controlled costs at all.

I asked 3 GameStop managers at the 3 local GameStop's in my area they all feel VALVe has burned bridges between them and VALVe in selling hardware, but not in selling video games or those Steam pre-paid cards.

Best Buy I'm not so sure as the manager there that I asked didn't seem to express it.

Alienware even said that the Steam Machines will be their least profitable PC's that they sell.

None as far as I know. That's just it. Valve wasn't creating the machines, they thought up the concept, and the software, but the machines was all third party distributors. Valve stood very little to loose I think.

It's just a couple of comments from neogaf members. That's it.

Hmmm I can only comment two things.

1) It should have had a set system, one manufacturer, or one set of required stats (plus or minus $100).

2) Market it not as a console for steam, but rather a preset configuration ready to go for someone to start their PC Games experience with steam coming pre-installed. Also has convenient living room technology (a controller and HDMI out).

These two together might get more PC gamers who are only used to the console market, and it would have worked fine. Third I guess optionally is to select a bunch of games that work well on the specs of the machine, and a lot of them have controller support. I'd say PixelJunk shooters as a good example of what would be good on that type of machine. Also coming pre-installed with emulators (with free games/demos that doesn't break laws) and you'd extend what the system could show off until they were ready to start buying games.

I suppose fourth sorta is if it came with a few games to start with, say Team Fortress 2, and Half Life 2, or something newer...

I never saw the point in it. Overpriced, with a very niche OS on it. Most games are not developed for Linux anyway. The only people interested would be people that had either a crappy pc, but then they already would want a pc that isn't that limited. Or the console players. But why would a console player want a steam machine when there's nothing exclusive about it. Except that you are excluded from playing most games that are out there for windows.

100 Beta machine in 2012

Every other SteamMachine was made by partners such as Dell, Scan and other. They took the biggest financial hit of failure.

VALVe only made the SteamLink and Controllers

I don't think there are big losers because I don't think anyone manufactured at PS/XBOX rates. They can also sell their Steam Machine as Windows Machine after all it's a PC.

With the exception of Dell, all the manufacturing partners were relatively small. Most had specialist cases designed and built for the SteamMachine.

In terms of raw money, their out lay would not be as big as something like the Dreamcast, but as a percentage and impact as a failed investment it would be big enough to cause animosity towards VALVe, specially since VALVe pulled the rug from under these guys twice.

Any company going into hardware with VALVe would be very wary, I'm guessing there was some serious legal agreements between VALVe and HTC

Valve doesn't have to manufacture the actual hardware themselves - rather, their role would be to coordinate between the various companies involved. EG: Bundling "X" game with "Y" Machine would work well for these markets, recommend producing "Z" number of machines before incoming holiday sales, handling advertising, tracking consumer behavior & location, ect.

For Sony and Microsoft, the value of the platform is its ability to sell media. That meant handling the publishing and hardware - but the problem with hardware is that it is expensive to manufacture & distribute. By shifting the manufacturing responsibility to various entities, Valve could potentially just "publish" the hardware, without anchoring themselves to the physical product. If an individual manufacturer goes down, Valve won't follow.

It was an amazing move by VALVe. Distribute a product with little or no financial risk to themselves. For all my hatred of VALVe I have to admire their marketing team.

But it was a nonsense product, that never had a real market.

It is not like a console. They're produced normally at a loss (for the first years), and money is recouped from a cut of the sale of hardware locked games.

SteamMAchine could never be sold at a loss, nor cost, because the manufacturers need to make money from them.

I was under the impression that the main draw of the thing was that it allowed you to use your pre-existing steam library for couch gaming. So it's for people who already play games on their PC but who also want a console, but don't want to invest in a new game library. But then they have the Steam link, which to me seems to be the more attractive option, and something I would actually consider getting.

But you can already hook up a pc to a tv through just one cable?