Microsoft leaders have so far warmly welcomed the new Steam Machine, despite the PC-console black box looking worryingly like competition to its recent "this is an Xbox, everything's an Xbox" strategy. But analysts aren't sure that the publisher should feel so unruffled. They tell GamesRadar+ the Steam Machine might be "Microsoft's worst nightmare."
"Steam Machine basically turns Microsoft's worst nightmare into a shipping product," explains Joost van Dreunen, NYU Stern School of Business professor and games industry analyst. "It pushes Microsoft further down the path it's already walking, where Game Pass and cloud access matter more than plastic boxes."
To its credit, Microsoft seems to know this. Microsoft Gaming CEO Phil Spencer recently implied the importance of games over hardware while praising the Steam Machine, saying, "Expanding access across PC, console, and handheld devices reflects a future built on choice, core values that have guided Xbox's vision from the start."
"As one of the largest publishers on Steam," Spencer continued, "we welcome new options for players to access games everywhere."
Former Blizzard president Mike Ybarra echoed the sentiment, saying in reaction to the Steam Machine, "Xbox should simply make great games. Cost model, focus, morale – all will go in the right direction."
"Xbox console sales have really struggled," says David Cole, DFC Intelligence founder and industry analyst, to GamesRadar+. "Steam Machine is just another sign that there may not be room in the market for a dedicated Xbox console system."
But van Dreunen suggests there's something more anxious under Microsoft's peace, love, and smiles. "The strategic risk," he says, "is that Valve becomes the preferred PC-console hybrid, meaning Xbox games strengthen Steam's ecosystem more than Microsoft's own."
