Fair pricing means a reasonable profit on the base cost. Trying to gauge what people are willing to pay means that you want to maximise your profit at all costs, consumers be damned.
I understand that’s what Americans consider “fair”, but I don’t fully agree.
In most cases, yes. But you have to remember, this is Valve and not some ordinary company. They have extremely deep wallets and a lot of responsibility and expectations on their shoulders (importantly, not the stock market!). If they charged what it cost for hardware and what it cost them to do r&d, it would likely not be in consumers favor.
Like even just get off the American-bad thing for one second: pricing it as a standalone pc basically just means “the cost of the parts”. They’ve put a lot of time and effort into this across their core employees and likely outsourced stuff because they couldn’t, in-house. Actually listening to people and charging relative to that is actually a great way to be fair and make people happy, guaranteeing positive impact of your product. I guarantee they’re paying attention to what people say ALL over the place. Like… Why do you think “it’s done when it’s done” is their pace?
Research and development is probably very high when you consider Proton, SteamOS, and the semi-custom CPU and GPU. Something between $50 to $100 million would be typical. Silicone is famously expensive in R&D, Proton has continuous costs (and has for quite a while now) that rack up, and SteamOS is literally an operating system. That’s a lot of salaries to pay.
I reckon they’re taking advantage of being private and playing the long game. Very, very long game. They’re not really in danger as long as Steam is successful, but I can’t blame them for wanting a decent gross margin so they can at least cover hardware costs. Especially with memory prices right now, I wouldn’t be surprised at 1000€ here in Germany, though I wouldn’t be happy about it. I would happily buy at 900€ (≈$1040), and be ecstatic at 800€ (≈$920).
Personally, I wouldn’t include Proton in the costs of the Steam Machine. The Deck already is benefiting from it immensely, and I would consider it to be a cost of expanding into Linux gaming in general - especially with the Lenovo handheld and other devices starting to jump on the bandwagon as Microsoft continues to take repeated dumps on their userbase. Its R&D costs are being won back by the market % Steam takes on any games bought and played in Linux, which means that it can benefit from that continued revenue stream rather than the one-off hardware sale.
The hardware has to break even. The software already has.
Fair pricing means a reasonable profit on the base cost.
Under many circumstances, this is true. However, console makers have historically sold consoles either at or slightly below cost, expecting to make their real profits on game sales, online store sales, etc… In the business world, it’s called a loss leader. Meaning it’s something popular that the company takes a loss on, while expecting it to encourage more sales elsewhere.
The classic grocery store example is a rotisserie chicken. You can go get a whole rotisserie chicken from the grocery store deli for like $3. It’s so cheap because the store is selling it at a loss. It’s a loss leader. Very few people will simply buy the chicken by itself. Instead, they’ll buy a tub of potato salad, some roasted corn, a can of green beans, and a gallon jug of sweet tea to go along with it. By selling that chicken at a slight loss, they were able to get the customer to buy all of those other things at a profit.
That being said, Valve has already stated that they’re not planning on having the Machine be a loss leader. Which is why people expect it to cost as much as a prebuilt with similar specs.
If it is priced higher than $600 they won’t sell enough to justify their existence. It will just be a repeat of last time.
This is perfect for people wanting a new console with a large games library, but Valve seems to be trying to force the square block in the round hole by placing it in the PC market space.
Why? Look at how many people here say they want Steam OS, and Lemmy skews heavy toward Linux users. This is that, but OOTB.
I don’t think it’ll sell anywhere near as well as the Steam Deck, but it’s also a less exciting form factor. I do think it’ll sell a fair number of units though.
The cheapest equivalent prebuilt I can find with similar specs (RX 7600 is slightly better than the Steam Machine) is $850, and a DIY build is more like $900 (lots of corners cut), so there’s probably not much margin on the prebuilt. Valve is probably saving some cash with their custom CPU, and they’re probably shipping it with a Steam Controller, hence the $800 target. If component prices rise significantly before launch, I could see $1k.
They’re letting us discuss this ad nauseam just to understand what prices people consider acceptable for these devices
100%
But that’s not a terrible thing, I suppose.
Absolutely. I think 80$ for the full package seems fair.
$60? why do they want $50 for something that’s clearly $10?
$70 if you hand deliver it to me. It’s my final offer.
Fair pricing means a reasonable profit on the base cost. Trying to gauge what people are willing to pay means that you want to maximise your profit at all costs, consumers be damned.
I understand that’s what Americans consider “fair”, but I don’t fully agree.
In most cases, yes. But you have to remember, this is Valve and not some ordinary company. They have extremely deep wallets and a lot of responsibility and expectations on their shoulders (importantly, not the stock market!). If they charged what it cost for hardware and what it cost them to do r&d, it would likely not be in consumers favor.
Like even just get off the American-bad thing for one second: pricing it as a standalone pc basically just means “the cost of the parts”. They’ve put a lot of time and effort into this across their core employees and likely outsourced stuff because they couldn’t, in-house. Actually listening to people and charging relative to that is actually a great way to be fair and make people happy, guaranteeing positive impact of your product. I guarantee they’re paying attention to what people say ALL over the place. Like… Why do you think “it’s done when it’s done” is their pace?
They’re buying the parts directly from the manufacturers though, so cutting out the retailer middle-man could offset the R&D costs.
Research and development is probably very high when you consider Proton, SteamOS, and the semi-custom CPU and GPU. Something between $50 to $100 million would be typical. Silicone is famously expensive in R&D, Proton has continuous costs (and has for quite a while now) that rack up, and SteamOS is literally an operating system. That’s a lot of salaries to pay.
I reckon they’re taking advantage of being private and playing the long game. Very, very long game. They’re not really in danger as long as Steam is successful, but I can’t blame them for wanting a decent gross margin so they can at least cover hardware costs. Especially with memory prices right now, I wouldn’t be surprised at 1000€ here in Germany, though I wouldn’t be happy about it. I would happily buy at 900€ (≈$1040), and be ecstatic at 800€ (≈$920).
Personally, I wouldn’t include Proton in the costs of the Steam Machine. The Deck already is benefiting from it immensely, and I would consider it to be a cost of expanding into Linux gaming in general - especially with the Lenovo handheld and other devices starting to jump on the bandwagon as Microsoft continues to take repeated dumps on their userbase. Its R&D costs are being won back by the market % Steam takes on any games bought and played in Linux, which means that it can benefit from that continued revenue stream rather than the one-off hardware sale.
The hardware has to break even. The software already has.
Under many circumstances, this is true. However, console makers have historically sold consoles either at or slightly below cost, expecting to make their real profits on game sales, online store sales, etc… In the business world, it’s called a loss leader. Meaning it’s something popular that the company takes a loss on, while expecting it to encourage more sales elsewhere.
The classic grocery store example is a rotisserie chicken. You can go get a whole rotisserie chicken from the grocery store deli for like $3. It’s so cheap because the store is selling it at a loss. It’s a loss leader. Very few people will simply buy the chicken by itself. Instead, they’ll buy a tub of potato salad, some roasted corn, a can of green beans, and a gallon jug of sweet tea to go along with it. By selling that chicken at a slight loss, they were able to get the customer to buy all of those other things at a profit.
That being said, Valve has already stated that they’re not planning on having the Machine be a loss leader. Which is why people expect it to cost as much as a prebuilt with similar specs.
Anything more than $500 and we riot!
Get ready to riot because there’s no way it’s that cheap. My money is on $800-1000.
If it is priced higher than $600 they won’t sell enough to justify their existence. It will just be a repeat of last time.
This is perfect for people wanting a new console with a large games library, but Valve seems to be trying to force the square block in the round hole by placing it in the PC market space.
Why? Look at how many people here say they want Steam OS, and Lemmy skews heavy toward Linux users. This is that, but OOTB.
I don’t think it’ll sell anywhere near as well as the Steam Deck, but it’s also a less exciting form factor. I do think it’ll sell a fair number of units though.
The cheapest equivalent prebuilt I can find with similar specs (RX 7600 is slightly better than the Steam Machine) is $850, and a DIY build is more like $900 (lots of corners cut), so there’s probably not much margin on the prebuilt. Valve is probably saving some cash with their custom CPU, and they’re probably shipping it with a Steam Controller, hence the $800 target. If component prices rise significantly before launch, I could see $1k.
I doubt it. I think they understand that the hardware market is volatile and what might cost $800 now might be $1000 in a few months.
It’s a good idea, tout the market before doing anything controversial