> Is this the Valve console?
>
> We think of Steam Machine as an extension of PC gaming, not as a console.
>
> The traditional console model is to sell hardware at a loss and make up the revenue with subscription services or by selling games that are locked-in to the hardware. We think this can make sense for a single business in the short term but that open ecosystems are better for customers over the long term. PC gaming's history proves this: The openness of the PC gaming space has enabled it to be the primary driver of hardware and software innovation for decades.
>
> The strength of PC gaming is the ability to play the games you want on the hardware you want. Steam Machine is a solution to these problems (and we think it's a great one), but it's not the only solution, and we don't want it to be.
The PS5 can only play games that you pay Sony a tax to play. The steam machine can play any game, including those bought outside Steam and thus without paying valve a tax.
This means the PS5 is subsidised, whereas Valve hardware does not tend to be. They have confirmed that internally all divisions must be roughly profitable/break-even.
While you are technically correct, 99% of all games that are going to be played on this device are going to come from steam where they take a 30% cut.
I don't know how much money they make from each unit but major profit is not the goal here. They want to sell more games to more casual people who don't even own a PC anymore.
Why can’t you imagine it? The console makers have been selling at a loss for 3 maybe 4/5 decades.
Edit: looks like it took 10 million PS5s to break even. The article is 5 years old I wonder if it’s true in 2026.[2]
> The existing industrial arrangement at the time was that of a bundled console-plus-cartridge business model, where the console manufacturer (say, Atari with its VCS/2600) sold the console at a loss and cross-subsidized it with the money made on cartridges sold with a huge profit margin.[1]
[2] It took Sony years to stop losing money on PS3 sales, but the company stopped selling the PS4 at a loss around six months after its debut in 2013. The PS5 has taken ever so slightly longer, but it’s clearly not repeating the costly exercise of the PS3 despite early reports suggesting Sony was struggling with PS5 pricing due to expensive parts.
They were originally sold at a loss, then became per-unit profitable at some point, and now they might be eating a loss on them again. But they lock in hardware prices years in advance.
PS5 has a lot parts in high volumes negotiated years in advance so they can leverage lower prices than valve. Valve ships like 10% max of the volumes that Sony sells.
From the FAQs:
> Is this the Valve console? > > We think of Steam Machine as an extension of PC gaming, not as a console. > > The traditional console model is to sell hardware at a loss and make up the revenue with subscription services or by selling games that are locked-in to the hardware. We think this can make sense for a single business in the short term but that open ecosystems are better for customers over the long term. PC gaming's history proves this: The openness of the PC gaming space has enabled it to be the primary driver of hardware and software innovation for decades. > > The strength of PC gaming is the ability to play the games you want on the hardware you want. Steam Machine is a solution to these problems (and we think it's a great one), but it's not the only solution, and we don't want it to be.
The PS5 can only play games that you pay Sony a tax to play. The steam machine can play any game, including those bought outside Steam and thus without paying valve a tax.
This means the PS5 is subsidised, whereas Valve hardware does not tend to be. They have confirmed that internally all divisions must be roughly profitable/break-even.
While you are technically correct, 99% of all games that are going to be played on this device are going to come from steam where they take a 30% cut.
I don't know how much money they make from each unit but major profit is not the goal here. They want to sell more games to more casual people who don't even own a PC anymore.
[dead]
Why can’t you imagine it? The console makers have been selling at a loss for 3 maybe 4/5 decades.
Edit: looks like it took 10 million PS5s to break even. The article is 5 years old I wonder if it’s true in 2026.[2]
> The existing industrial arrangement at the time was that of a bundled console-plus-cartridge business model, where the console manufacturer (say, Atari with its VCS/2600) sold the console at a loss and cross-subsidized it with the money made on cartridges sold with a huge profit margin.[1]
[1] https://thereader.mitpress.mit.edu/how-nintendo-bled-atari-g...
[2] It took Sony years to stop losing money on PS3 sales, but the company stopped selling the PS4 at a loss around six months after its debut in 2013. The PS5 has taken ever so slightly longer, but it’s clearly not repeating the costly exercise of the PS3 despite early reports suggesting Sony was struggling with PS5 pricing due to expensive parts.
[2] https://www.theverge.com/2021/8/4/22609150/sony-playstation-...
The base PS5 does not have better hardware. Though the PS5 Pro outperforms the Steam Machine and is still cheaper than it..
They were originally sold at a loss, then became per-unit profitable at some point, and now they might be eating a loss on them again. But they lock in hardware prices years in advance.
PS5 has a lot parts in high volumes negotiated years in advance so they can leverage lower prices than valve. Valve ships like 10% max of the volumes that Sony sells.