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Comment on Valve's new hardware will NOT be loss leaders

Console manufacturers sell at a loss because they need to sell the console first before they can sell anything else. They can expect to make that money back on software the user could not have bought without the console.

Valve doesn't need people to buy Steam Machines to get them to start using Steam. In fact, I suspect most units sold will be to users who are already invested in the ecosystem. Selling at a loss would just be a straight loss to them.

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pory@lemmy.world ⁨4⁩ ⁨months⁩ ago
On the other hand, even if they don’t “make back” the loss, you can look at it as: how much money is Valve willing to pay to become a “mainstream” living room console competitor? Lose a couple billion dollars on Machine, but get 400k “give valve money, probably” machines plugged into TVs. Sony and MS have other divisions and they AND Nintendo have shareholder responsibilities. Those conpanies cannot tank a single year of number go down. Valve can, and surely there’s a price that Valve would be willing to play to be “the xbox”.

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Cethin@lemmy.zip ⁨4⁩ ⁨months⁩ ago
Console manufacturers haven’t sold at a loss in a long time.

I agree, it won’t be huge gains directly for them, but even moving people off of Windows benefits them by removing control a competitor (Microsoft) has. I somewhat agree that it won’t be sold at (much of) a loss, but maybe at cost. I’m sure they expect manufacturing prices to go down over time, and engineering was a one-time investment, so sold just below cost doesn’t seem unreasonable to me at launch, which then becomes at cost or above in the future.

This all depends on if their goals for it are short-term or long. Historically, they seem to target long-term. That’s why I think it’ll be as low as they can make it, which they also said they’re doing by only having 8GB VRAM as cost savings. They want to drop the price as low as they can to compete. They won’t compete at $1k. I doubt they’d compete at $600-700. I suspect they’re targeting $400-500, which seems like a reasonable cost for the hardware too.

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- sugar_in_your_tea@sh.itjust.works ⁨4⁩ ⁨months⁩ ago
  
  Console manufacturers haven’t sold at a loss in a long time.
  
  They tend to at first launch. This article says it took 6 months for the PS4 and a bit longer for the PS5 to stop selling at a loss. It’s no longer the whole product lifecycle, but they are still sold at a loss at least at the start. I think that implies that hardware sales aren’t a major profit center.
  
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- crmsnbleyd@sopuli.xyz ⁨4⁩ ⁨months⁩ ago
  Does Nintendo not sell at a loss?
  
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turdcollector69@lemmy.world ⁨4⁩ ⁨months⁩ ago
They may be trying to muscle in on traditional console territory.

Steam has a well tenured reputation for having inexpensive games. They may be leveraging this to appeal to the console players turned off by the all recent price hikes.

I suspect the gabecube may be close to if not, at cost. I don’t think it’ll be at a loss.

Gabe has previously claimed that they developed the index because they didn’t want VR to die and even gave grants the game developers who made VR titles.

So it’s established that Steam is big enough and secure enough to risk cultivating new or disrupting old markets.

Operationally steam has low overhead and insane profit margin. Unless they fuck up the steam store they’re guaranteed massive profit.

If the new hardware flops and they lose a bit of money; Gabe just buys one less yacht and steam ticks on as normal.

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- echodot@feddit.uk ⁨4⁩ ⁨months⁩ ago
  As you say valve are incentivised to do this because it will move more people over to Linux. I suspect that they want that more than they’re really bothered about hardware sales so while I don’t think it’ll be sold at a loss, because frankly that would be stupid even if they could afford to do it, but I don’t think it’ll be anywhere near as expensive as some people seem to be claiming.
  
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jj4211@lemmy.world ⁨4⁩ ⁨months⁩ ago
Probably true, but there is a chance they might convert some console gamers…

But not enough to bet on it with a loss leader probably.

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- Korhaka@sopuli.xyz ⁨4⁩ ⁨months⁩ ago
  If it was a loss leader then non gamers would also look to buy it and never touch steam. Doing that at a loss isn’t a great idea.
  
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