History inevitably repeats itself. Outcomes can be determined by analyzing past decisions and consequences. If the past 50+ years of computer science trends have taught us anything, it has shown that open platforms have a far easier time of gaining traction than closed ones do. Furthermore, the less proprietary your environment is, the easier it is to be adopted by the mass market.
IBM first two attempts at creating microcomputers had flopped and failed to garner significant market share from the likes of Commodore and Apple. However in 1981, IBM found its first success in a design known as the Personal Computer or PC. The basic concept was to build a non-propitiatory design that employed the use of “off the shelf” parts.
Even though IBM is no longer the leader in computer manufacturing, its design has become industry standard. PCs can be configured using parts from a wide array of vendors and manufactures; allowing for millions of different configurations and specifications. The underlying structure intrinsic to all PC still allows these different configurations to communicate, process, and share information and data.
In order to understand why this concept is key to the inevitable domination of Valve’s Steam Box, we will briefly look at contemporary models and the constraints they create on the platform holders. A game console (such as the PlayStation 4, or Nintendo Wii U) are specialty computing devices developed specifically for delivering game content from developers to the consumer. These machines are developed with parts that will determine the maximum utility of the platform for years to come. Because they are not upgradable, special attention must be paid to make sure that the selected parts are both cost efficient, and capable of providing the power that future enhancements in rendering technologies will demand in the future. In some cases, such as with Microsoft’s Xbox One, the console may be released with obsolete specifications that fail to meet even modern PC standards.
Valve Will Dominate Because They Wont Reset Their User Base
In addition, the console platform holders are usually responsible for costs associated with manufacturing and design of their propitiatory formats. Because consumers are forced to upgrade to entirely new devices each generation, the effective market share of each console maker resets to 0%. Valve co-founder Gabe Newell recently remarked about having a 65 million user base compared to Microsoft’s 3 million at CES 2014 earlier this week. It was funny, it was witty; but most importantly it was true. The introduction of the new Steam Box is not intended to replace the Steam’s PC platform in the same way that the Xbox One is intended to replace the Xbox 360. If you game on the PC, you can continue to do so without missing any content that is released on the platform in the future.
Valve Will Dominate Because Platform Trumps Hardware
IBM enduring legacy is the idea that one company doesn’t have to produce every component of a system. The Steam Box is a higher order of this concept. This week 14 different Steam Boxes were unveiled at this years CES in Las Vegas. Established computer manufactures such as Alienware, Alternate, Cyberpowerpc, Digital Storm, Gigabyte, iBuyerpower, Falcon Northwest, Materiel.net, Next Spa, Origin PC, Scan, Webhallen and Zotac have all signed on to produce the hardware for Valve’s platform. Without the need to invest large capital into R&D and manufacturing , Valve can pour its resources into refining its already first class content distribution model.
The consumer will see the benefits of competition as different manufactures compete for you business. The benefits are far greater than those produced from console makers battling with their propitiatory formats. Ranging from $500 to $6000 your gaming machine can be as cost efficient or as outrageous powerful as you see fit while maintaining access to all the content offered on Steam. Even the lowest end variant of Steam Box will categorically outperform the similarly priced Xbox One console. The consumer also benefits from being able to upgrade their hardware’s performance for a fraction of the cost of purchasing a new machine. Ten years from now when the current consoles have reached their peak performance, a Steam Box owner will simple pop out their outdated video card and continue gaming for another ten years.
Valve Will Dominate Because They Are Bringing the Best “Off the Shelf” Components Together
And that is basically it. The value is there. The technology is there. The digital distribution model is there. A model that allows for other vendors to benefit from each other’s strengths and mitigates the risk of going all alone. A model that maximizes the benefits to consumers while providing products that will outperform any console on the market today.
Has Valve’s well structured platform convinced you to invest in a Steam Box or will you stick with PC or console?
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