Steam OS Scorecard: Great News for Oculus Rift, Bad for PS4 & Xbox One

Steam OS has finally been announced to no one's surprise, since Valve has long been expected to get into the console space; however, Steam OS is specifically billed as a cloud-based, content streaming platform, which makes it different -- and better, infinitely better -- than either PS4 or Xbox One. (Which was going in a similar direction, until its botched debut last Summer.) For that reason, I think it's safe to say PS4 and Xbox One are dead on arrival. There's now little or no reason for dedicated Steam users (and there are roughly 50 million of them) to upgrade their console to One/PS4. And without a hardcore gamer audience to build off of, consoles from Microsoft and Sony will be left flailing.

On the other side of the ledger, I'd say this is very good news for the Oculus Rift. Valve CEO Gabe Newell is a longtime supporter of the VR system, and the ability to stream games and content through Steam OS should help nullify the PC hardware hurdles.

And for Linden Lab? Jury's still out, but overall, this seems like Not Great news:

The company just purchased Desura OS, which is potentially a competitor with Steam, for one thing. For another, Linden Lab was supposed to be publishing Second Life on Steam, but that announcement was over a year ago, and it's still not there. (Which makes me think the Desura deal put the kibosh on putting SL on Steam, but I may be wrong there; I just asked Linden Lab WTF is up with SL not being on Steam.) In any case, this is great news for interactive content and consumers of it, as a company that's been doing online content delivery for well over a decade gets into a very stagnant sector in need of disruption.

Comments

[Ezra]

"For that reason, I think it's safe to say PS4 and Xbox One are dead on arrival. There's now little or no reason for dedicated Steam users (and there are roughly 50 million of them) to upgrade their console to One/PS4."

What about all the reasons that've existed before, like console exclusives? Grand Theft Auto 5 broke sales records just this past week. I can't recall a Steam game launch raking in a billion dollars in 3 days. Quite odd to hear someone declare the next-gen of consoles dead on arrival when that just happened, and so many more console exclusives are in the pipeline.

Factor in Steam OS is built on Linux, which very few games run on, and news of new consoles' demises seems even more dubious.

"On the other side of the ledger, I'd say this is very good news for the Oculus Rift. Valve CEO Gabe Newell is a longtime supporter of the VR system, and the ability to stream games and content through Steam OS should help nullify the PC hardware hurdles."

Most definitely not. This streaming has already existed in the form of Big Picture. You still need a PC to stream to your TV; whether that PC is running Windows or Steam OS. The only difference this announcement makes is that now you'll able to do it from an OS with 1% or less the amount of available games.

Steam OS might mean more games will be released for Linux in the future, but I somehow doubt Linux gaming is going to topple Windows gaming anytime soon, and definitely not topple consoles.

"In any case, this is great news for interactive content and consumers of it, as a company that's been doing online content delivery for well over a decade gets into a very stagnant sector in need of disruption."

That I agree with. More options and more competition is better. Steam OS provides a lot of good incentive to provide games and content for Linux, but by no means is this anything close to any sort of instant victory. This is the furthest thing from.

[Wagner James Au]

"What about all the reasons that've existed before, like console exclusives? Grand Theft Auto 5 broke sales records just this past week. I can't recall a Steam game launch raking in a billion dollars in 3 days. Quite odd to hear someone declare the next-gen of consoles dead on arrival when that just happened, and so many more console exclusives are in the pipeline."

Actually, hits on Steam generally make more money for the game developer, because then they don't lose 50% of their revenue to the retailer. GTA 5 *grossed* a lot of money, but because it's retail-driven, the profit margin is a lot smaller for Rockstar/Take2. That's one big reason developers will actually prefer to give their exclusives to Steam OS, not the consoles. And next gen consoles are bought by hardcore gamers. But now Steam OS is going to undercut that sales driver bigtime. So the reasons that existed before are quickly about to go bye bye.

[Ezra]

Profit margins are meaningless compared to total profit. For example, Skyrim released on Steam and consoles at the same time and total PC sales, which account for more than just Steam, only added up to 14% with Xbox 360 and PS3 making up the rest (http://www.statisticbrain.com/skyrim-the-elder-scrolls-v-statistics/).

I highly doubt any game developer is making more money on Steam than they are consoles. I'd love to see some examples of any game developer simultaneously releasing on Steam and consoles that is making more money on Steam. Total profits, not just profit margin. Profit margins can be amazing on 1 copy sold, but that means nothing.

Also, game developers don't tend to just "give" exclusives. Microsoft and Sony tend to purchase exclusives or make exclusives first-party. Unless Valve is going to go that route, the only guaranteed exclusives they're likely to have is what they make themselves.

I think you really need to look into the state of Linux gaming before declaring next-gen consoles dead on arrival. even if the millions of Windows gaming PCs were running SteamOS tomorrow, how would that kill consoles where Windows gaming hasn't? Windows has Steam and Big Picture mode too, you know, so far consoles still seem to be doing fine.

[zzpearlbottom]

Can only add to the picture that due to recent Nsa case, more and moe are leaving any OS then Linux!

[Masami]

Ezra wrote:

even if the millions of Windows gaming PCs were running SteamOS tomorrow, how would that kill consoles where Windows gaming hasn't?

SteamOS will run on consoles too. That's the whole point.

The problem with existing consoles is that you can't mod an Xbox, PS4 or Wii game. Several of Valve's most successful titles started as modifications of earlier games, so Valve obviously recognizes the value of modding. They want SteamOS to become a platform to bring modding communities (who use desktops/laptops) and console gamers (who play in their living rooms) together. And they want MS out of the picture. Linux is the natural choice here because it is mature enough to host both the games and the creativity tools (Blender, GIMP etc.).

[CronoCloud Creeggan]

Hamlet, the streaming thing refers to streaming Windows only STeam games from a Windows machine YOU own on your own network to a STeamOS machine in the living room, not a OnLive or Gaikai thing.

The cloud thing is only preferences/saves, that sort of thing....you know, like the PS3 does already.

I think it's safe to say PS4 and Xbox One are dead on arrival. There's now little or no reason for dedicated Steam users (and there are roughly 50 million of them) to upgrade their console to One/PS4. And without a hardcore gamer audience to build off of, consoles from Microsoft and Sony will be left flailing.

That's silly, if they're dedicated Steam users, they're PC gamers, not console gamers and wouldn't buy a console anyway. Sony and Microsoft aren't selling their machines to Steam owners...but to people who don't use Steam. You know....people who aren't PC gamers. Separate markets.

[2103]

I'm starting to think this blog has some kind of financial future in Oculus Rift, they sure do pimp it enough.

[Adeon Writer]

While I've never owned any of them, as GTA 1, 2, 3, and 4 are available on Steam, I have zero doubt 5 will be as well, with time.

Anyway.

Good news for me. This and Wii U (I'm a Nintendo fan in the same way some are Disney fans) and I'll be set. Wasn't interested in Xbox or Sony anyway.

[Arcadia Codesmith]

Safe to say?

I would be enormously surprised if the next-gen consoles were dead on arrival. You can't discount the impact of brick-and-mortar retail yet, and that entire distribution infrastructure has significant inertia.

I don't expect the Xbox and Playstation to live forever, but I'm not seeing anything here that's going to change the game overnight. Five or ten years from now, maybe.

[Ezra]

@Masami

When dedicated hardware for SteamOS arrives, then we get to talk about all the other possible issues.

One of the obvious ones is, how well will the dedicated hardware for SteamOS price vs. consoles? That Piston box that previewed last year was $1,000 dollars. If the first generation of SteamOS hardware prices similarly, then SteamOS hardware loses on the pricing front.

Also, it will be awesome that we can swap out pieces of hardware in something such as the Piston, but an advantage of consoles vs. PCs and keys to their longevity and appeal to developers has always been the hardware immutability. Console developers are able to build towards the metal rather than abstractions that try to account for hundreds of different sorts of hardware configurations, which has meant less bugs, less need for patches, and way better graphics and sound out of a 400 dollar console vs. a 400 dollar PC.

SteamOS isn't a console OS in the same way Sony and Microsoft build their console operating systems. Just because there'll eventually be dedicated hardware meant to be placed in a home entertainment system doesn't make those pieces of hardware any less desktop systems in disguise in all the ways that matter, much the same way dedicated hardware for Windows Media Center has existed.

On the software front, the status quo of those pros and cons perpetuate too. Open operating system and likely lack of hardware DRM does equate to more freedom to customize and mod the system and games. But that also leads to much more freedom in piracy which the levels of on PC has been a big reason consoles have been largely preferred by developers.

SteamOS will be interesting, but it really doesn't change the status quo of anything.

[Metacam Oh]

"I think it's safe to say PS4 and Xbox One are dead on arrival."

I think it's safe to say that this prediction is dead on arrival. Gamers are going to throw their years of loyalty and familiarity to XBOX and PS out the window because Steam will stream from the web? Maybe you missed the outrage from the gaming community that XBOX 1 was going to require you to be connected to the internet to play. Outrage was so loud, Playstation decided to reverse course and not pursue this route also. People are not going to be happy when their internet is out or is running slow and they can't even play a single player video game because it's streamed from the web.

[Ezra]

@Metacam

You stream Big Picture mode from your PC, not from the web. I think Hamlet is confused about that. You very much still need a PC regardless of what OS its running.

[Iggy]

Something like the Rift will catch fire one day. Right now, as with so many of Hamlet's other hobby horses, it seems more like techno-fetishism than paid product placement.

Most of us under Gibson's and Stephenson's spells in the 80s and 90s kept wishing for the better parts of those Cyberpunk futures.

[Frans Charming]

This might be somewhat related. http://arstechnica.com/information-technology/2013/09/nvidia-seeks-peace-with-linux-pledges-help-on-open-source-driver/

[Masami]

@Ezra

When dedicated hardware for SteamOS arrives, then we get to talk about all the other possible issues. One of the obvious ones is, how well will the dedicated hardware for SteamOS price vs. consoles?

There will be no dedicated hardware. What we will likely see is several manufacturers offering small form factor gaming PCs with preloaded SteamOS. Some of them will be cheap, others will be expensive.

an advantage of consoles vs. PCs and keys to their longevity and appeal to developers has always been the hardware immutability.

Hardware immutability of consoles is one of the reasons why PC gaming always had an edge in visual quality and performance. Did you know that many "full HD" console games are actually rendered in 720p and then upscaled to 1080p?

If hardware immutability was appealing to developers, the Mac would be the number one gaming PC. Software immutability is actually more useful, and Valve as the distributor has maximum control over what goes into SteamOS. The fact that Linux won't get destabilized by crappy and/or outdated OEM drivers is another plus. All the drivers are either part of the kernel or come straight from Nvidia/AMD.

Console developers are able to build towards the metal rather than abstractions that try to account for hundreds of different sorts of hardware configurations, which has meant less bugs, less need for patches, and way better graphics and sound out of a 400 dollar console vs. a 400 dollar PC.

The $400 console is only competitive because it is sold at a loss. Its hardware is heavily subsidized from game sales but at the same time offers no upgrade path for those hardcore gamers who WANT an $800 console with all the bells and whistles.

SteamOS won't instantly kill PS4 and XBox, but it has a good chance to become the Android OS of gaming.

[Ezra]

@Masami

"There will be no dedicated hardware. What we will likely see is several manufacturers offering small form factor gaming PCs with preloaded SteamOS. Some of them will be cheap, others will be expensive."

Dedicated in the sense Valve's likely to certify preconfigured hardware that will brandish their logo, akin to how Microsoft does with Windows.

The smaller more living-room appropriate form factors is a direction Microsoft is moving PCs towards anyway via hardware like the Surface. We can set Windows 8 hardware in our entertainment systems right now, HDMI out to TV, and play Steam games through Big Picture mode along with every other competing service like Desura, Origin and every other Windows game period.

I'm sure that hardware put together for Steam OS will be honed towards gaming, but this too has already existed for many years via brands like Alienware.

Still, I understand Valve is putting an emphasis on swappable hardware via things like the Piston. And unlike hardware like the Surface or Alienware laptops, there won't be the luxury tax of a screen, keyboards and drive bays for hardware purposed solely to feed big screen TVs, like SteamOS hardware presumably. So any SteamOS hardware will definitely have those advantages, but it still won't be achieving anything not already achievable, and there's other pros and cons at play like you know...abandoning all of ones' Windows games for a more dedicated living room experience.

"Hardware immutability of consoles is one of the reasons why PC gaming always had an edge in visual quality and performance. Did you know that many "full HD" console games are actually rendered in 720p and then upscaled to 1080p?"

The value propositions of unchanging consoles, for both consumers and developers, have mattered more than the fact that of course ever-changing PC hardware becomes more powerful over time.

Buy a console and nearly a decade later it's still supported by the latest releases for good reasons.

There's no shortage of information on the net about the advantages developers have in targeting a handful of consoles vs. thousands of different configurations of PC hardware.

"If hardware immutability was appealing to developers, the Mac would be the number one gaming PC."

Basic considerations like market size and potential sales is still king. In that regard mentioning Mac doesn't make sense, since Macs aren't sold as gaming platforms. That isn't a proper analog to consoles.

There's pros and cons to hardware immutability. It isn't all wins, it's just proven to be mostly wins or console gaming wouldn't be so big.

"Software immutability is actually more useful, and Valve as the distributor has maximum control over what goes into SteamOS. The fact that Linux won't get destabilized by crappy and/or outdated OEM drivers is another plus. All the drivers are either part of the kernel or come straight from Nvidia/AMD."

Have you seen what manufacturers have done to Android, a similarly Linux-based, freely-licensable OS? It defines fragmentation and unpredictable quality, versioning and featureset in hardware and software.

The only control Valve will have in preventing a lot of Android-esque issues with SteamOS is certifying hardware, or like Google, try to mitigate it by releasing flagship hardware themselves. But that does nothing to stop the user from downloading some modded version of SteamOS.

Windows on the other hand, closed-source and through certifying is able to limit what OEM's do. The OEM crapware fest of prior Windows days has already been addressed by Windows 8 era certification.

I think Windows will have the most predictable software environment. But who cares? My mentioning of hardware immutability was about why a $400 console is a much better value than a $400 PC. I doubt anyone has a PC they built or bought for $400 7 years ago that will run GTA5 as well as a current-gen console when it comes out on PC. There's reasons for that.

"The $400 console is only competitive because it is sold at a loss. Its hardware is heavily subsidized from game sales but at the same time offers no upgrade path for those hardcore gamers who WANT an $800 console with all the bells and whistles."

SteamOS doesn't figure into any of that, since Valve isn't building any console. Whatever SteamOS-branded boxes come out in the future will still accomplish nothing that we can't do with Windows and present hardware today. So again, not sure what status quo SteamOS changes except we're being asked to give up 99% of our games and use Linux.

Options are good and I'm excited about SteamOS. But I myself won't be adopting Gabe's "Linux is the future of gaming" ideology just yet. I get that Valve fears Microsoft's moves in making Windows devices a lot more like Xbox, and Xbox a lot more like Windows devices, but exactly what's the huge advantage for me in choosing one corporation that wants all my money and coerces it by limiting my options vs. another company that uses the exact same tactics? Valve will have to come up with that answer in order to compete at all let alone kill anything.

[Masami]

@Ezra

Have you seen what manufacturers have done to Android, a similarly Linux-based, freely-licensable OS? It defines fragmentation and unpredictable quality, versioning and featureset in hardware and software.

Android's fragmentation problem has been solved.

Windows on the other hand, closed-source and through certifying is able to limit what OEM's do. The OEM crapware fest of prior Windows days has already been addressed by Windows 8 era certification.

With the result that some hardware stopped working. Previously, users would install outdated drivers; now they're stuck with no driver at all.

Linux addressed that problem long ago by merging drivers into the kernel source tree. This way Linux driver modules remain available and compatible with the latest kernel version long after OEMs stop maintaining them. Which is why Linux now supports more hardware than any other OS and driver installation is fully automatic.

Windows is much more fragmented, largely due to its ever-changing driver ABI that requires OEMs to rebuild, retest and re-release Windows drivers about every two years.

My mentioning of hardware immutability was about why a $400 console is a much better value than a $400 PC. I doubt anyone has a PC they built or bought for $400 7 years ago that will run GTA5 as well as a current-gen console when it comes out on PC.

The PS3 sold for $500 and was subsidized to the tune of $300 per unit. You were effectively buying an $800 computer and given a discount for granting Sony the privilege to lock you into their platform. Today, the hardware value of a PS3 is around $240, and GTA5 will look no better on it than it will look on an $800 PC from seven years ago.

Developers in fact hated the PS3 architecture, which is why the PS4 has a regular x86_64 CPU, a BSD kernel and no backwards compatibility. I don't think it's necessary to explain what this means for PS3 games that you buy today.

On a modern PC I can still play all the games that I bought since 1997, and I don't even need Windows for that. To play PS3 games on a PS4, you will depend on Gaikai streaming. Good luck with that.

But I myself won't be adopting Gabe's "Linux is the future of gaming" ideology just yet.

Isn't it funny how people attach the ideology tag to everything involving Linux? You think Gabe Newell is prone to ideology? You think Google was guided by ideology? You think people prefer Android phones for ideological reasons?

[Ezra]

@Masami

"Android's fragmentation problem has been solved."

For software anyway, and only within Google land. It does nothing for say, Kindles, or devices that may become popular in the future like OUYA that use Android but don't include Google Play.

My point was SteamOS is likely to have greater software fragmentation than Windows, and definitely consoles. Amazon can't release a Kindle Windows 8 and fragment developers and users of Windows. Amazon will however be able to remove the Steam from SteamOS and say, make a GameConnectOS. So long as this possibility exists it doesn't make sense to say "Software immutability is actually more useful, and Valve as the distributor has maximum control over what goes into SteamOS." as you did. It's just not true, they're building on and releasing open source, GPL-licensed software. That means all the same pluses and minuses of targeting Linux before, and other Linux-based systems like Android, will exist.

Again though, most important of all when comparing to consoles is hardware fragmentation. There's pros and cons to thousands of different configurations of PCs regardless of what OS they run, but the status quo is that the hardware immutability of consoles has been more preferred by developers and gamers alike, or else consoles wouldn't receive top-rate support and sales of multiplatform games wouldn't dominate on consoles. People like the predictable, less expensive experience vs. the more expensive, customized one.

"With the result that some hardware stopped working. Previously, users would install outdated drivers; now they're stuck with no driver at all."

Hadn't heard of any widespread crisis of Windows gamers removing their drivers. What I do know is Nvidia supports Windows a whole lot more than they support Linux; along with the rest of the gaming industry.

"The PS3 sold for $500 and was subsidized to the tune of $300 per unit. You were effectively buying an $800 computer and given a discount for granting Sony the privilege to lock you into their platform. Today, the hardware value of a PS3 is around $240, and GTA5 will look no better on it than it will look on an $800 PC from seven years ago."

And what is SteamOS doing to compete with that? Lock-in to the Steam store away from Origin, Desura, and the entirety of Windows-anything and pay full price for hardware not guaranteed to be supported a decade down the line like consoles?

Still not seeing the console-killingness of SteamOS, just a laundry list of cons and very few pros vs. the status quo of Windows gaming and console gaming.

"On a modern PC I can still play all the games that I bought since 1997, and I don't even need Windows for that. To play PS3 games on a PS4, you will depend on Gaikai streaming. Good luck with that."

Or you can play PS3 games on your PS3, just like you can play your 1997 PS1 games on your PS1.

It's not like for PC ancient games don't depend on software like DOSBox, which GOG depends on for example. Consoles and PCs alike depend on emulation, or re-releases due to both being evolving things that break backwards compatibility. Consoles just do so in much more accountable for, predictable intervals.

"Isn't it funny how people attach the ideology tag to everything involving Linux? You think Gabe Newell is prone to ideology? You think Google was guided by ideology? You think people prefer Android phones for ideological reasons?"

Gabe actually said what I quoted:

'Newell made his comments while delivering a keynote at LinuxCon in New Orleans. "It feels a little bit funny coming here and telling you guys that Linux and open source are the future of gaming," Newell said. "It's sort of like going to Rome and teaching Catholicism to the pope."'

http://arstechnica.com/gaming/2013/09/gabe-newell-linux-is-the-future-of-gaming-new-hardware-coming-soon/

That's him being heavy on the ideology which some choose to accept. I'm just saying I don't accept the ideology. I haven't adopted any extreme opinions myself like say, "SteamOS is definitely going to fail!", I just don't see the point in extreme opinions like new consoles "are dead on arrival". If you asked me, SteamOS is just 1 more option, which is always good, and the majority of gamers won't care about any war idealists rage. Wherever the majority's favorite games are, what's least expensive, what's most impressive, that's what they'll buy and have been buying.

[Masami]

@Ezra

Hadn't heard of any widespread crisis of Windows gamers removing their drivers.

Search Google for "windows 8 driver old hardware". The web is full of tutorials teaching how to disable the certification checks of Windows 8 in order to install those outdated Win7 or Vista drivers. XP display drivers don't work at all since Win8 completed the switch from XDDM to WDDM.

I have an older laptop built by Acer which has an ATI GPU with an OEM device ID. Due to that ID, the official ATI driver for Windows would refuse to install; only a special OEM driver issued by Acer would work.

The only modern OS still capable to run hardware-accelerated graphics on that laptop is Linux. With Win8 my only option would be the Microsoft Basic Display Driver, i.e. software rendering. I bought a new laptop in the meantime, but I won't forget the experience. You can't trust OEMs to issue updated drivers for new operating systems. They have no incentive to do so. Fragmentation is inherent to the Windows ecosystem. It is by design, not by accident.

What I do know is Nvidia supports Windows a whole lot more than they support Linux

Not sure what kind of support you're missing. There has been feature and performance parity between their Linux and Windows drivers for quite a while. What many people in the Linux camp dislike about Nvidia is the fact that they refuse to release the main driver sources. But then again, they don't do that for Windows either. I have Nvidia/Intel hybrid graphics in my current Linux laptop and wouldn't trade it for anything else.

[Darien Caldwell]

"Isn't it funny how people attach the ideology tag to everything involving Linux? You think Gabe Newell is prone to ideology? You think Google was guided by ideology? You think people prefer Android phones for ideological reasons?"

Yes, Yes, and Yes.

[Masami]

Quoting myself here:

There has been feature and performance parity between their Linux and Windows drivers for quite a while.

Just so you know how serious they are about feature parity, read this.