SteamMachine (A presentation on a new form of video game distribution) By Megan Reardon

● Valve Corporation is a video game development & digital distribution company based in Bellevue, Washington ● Founded in 1996 by former Microsoft employees Gabe Newell and Mike Harrington ● Creator of multiple award-winning games ● Developer of leading-edge technology like Source, the game engine, and Steam, social-media based video game distributor

GAME CREATORS ● Team Fortress (1999) originally for Windows (Mac OS/Linux: 2013) adapted from Quake modification ● Portal (2007) created for Windows/XBOX/PS3 physics based puzzle game Portal 2, the sequel, was the first Valve game developed for PS3 ● Left 4 Dead (2008) created for Windows/XBOX 360 (Mac: 2010) co-operative zombie shooter Half-Life (November 1998) first video game created by Valve first in the Half-Life series originally for Windows (PS2: 2001; Mac/Linux: 2013)

WHAT IS ● digital distribution platform for PC/Video gaming ● includes a social-media/communications platform ● initially developed for Microsoft Windows in 2003 (has since expanded into Mac OS X and Linux; limited availability on PS3, iOS and android) ● “Running the iTunes of computer games” (Slate, 2013)

BY JANUARY 2013: ● over 2,000 games available ● 54 million active user accounts ● 6.6 million concurrent players ● estimated % share of the digital distribution market for downloadable PC games ($18 billion industry) ● “expanding from production to distribution, Steam is now the key player in computer game sales” (Slate, 2013)

SO STEAMMACHINE? ● “Valve’s first step in broader plan to erase Windows from PC gaming entirely” (Forbes, 2013) ● 3 separate pieces that utilized together will bring “PC gaming from computer room to the living room” 1. SteamMachine 2. SteamOS 3. Steam Controller NOT ACTUAL STEAMMACHINE

● “new category of gaming machine” (TIME, 2013) ● hackable, upgrade-able, open source hardware ● several 3rd party vendors will offer machines however Valve’s machine will offer “the most control possible over the hardware” ● will allow users to build their own machine if they want ● set to be available at three price points depending on performance level STEAMMACHINE

OS STEAM ● Linux based operating system ● FREE operating system ● stream music, media and Steam video games ● no internet browser ● improved graphic performance & audio enhancement ● designed specifically for big screen TV’s ● must have linux version of games to play them

● 2 touchpads instead of traditional joysticks ● 16 buttons all over the controller ● touchscreen in the center of controller ● better relay of information from in-game to player and back using haptic feedback STEAMCONTROLLER

TRIP DOWN MARKETING FUNNEL ● released information on the SteamMachine in a series of 3 press releases on 3 separate days ● running contest through the month of October for current Steam users who want to become beta testers for the SteamMachine/SteamOS ● 300 people running as beta testers who are to provide word- of-mouth feedback on the console and the OS as they play

STILL FALLING THROUGH ● all the marketing falls under awareness marketing as there is no product for anyone to be converted to yet ● multiple press releases on multiple days allows for greater control over the news media and more time spent on your product ● contest running all month provides source of awareness during the run ● beta testers provide source of word-of-mouth advocacy & marketing awareness throughout beta testing process

● customizable & buildable ● cheaper than Windows OS ● stream music, movies, games ● most control over hardware ● available for all regions, worldwide ● provide greater knowledge from inputs via controller STRENGTHS ALSO NOT STEAMMACHINE

● brings worst part of PC gaming to living room-- continual arms race ● BioShock, Grand Theft Auto, Call of Duty (some of the bigger name games on Steam) have no Linux support and won’t work on SteamMachine ● Linux is not a familiar platform for most users ● Linux itself only currently has 200 games available ● that controller is insane, let’s be real ● will do exactly what the Playstation and XBox already do WEAKNESS

● shift the power of PC gaming to the living room ● take power of PC gaming away from Windows & Microsoft completely ● grow Linux as computer operating system ● control bigger market share in video game industry OPPORTUNITIES

● current industry rivals: XBox One, Playstation 4 ○potential threats: Apple, Google, and Amazon all making their own consoles THREATS ● substitutions: Apple TV, Roku, ChromeCast, other streaming media device ● new start-up coming in to create a better interface ● new game coming out only available on existing platforms ● product isn’t a necessity for buyers, they don’t demand it

Valve is placing a lot on the success on their SteamMachine to bring their software from the computer room into the living room and make them central to the interactive media experience. They’ve spent a lot of money developing their OS and especially into the new controller. PERSONAL REACTION BUT...

As Slate mentioned, the future of PC gaming is… a console? How is that different from current consoles? There are already multiple consoles in the marketplace and apparently by the end of the year, there will be even more. SteamMachine’s release for early-mid 2014 puts it behind all the others. THAT SAID...

Linux is not a familiar OS for most people and the curve to learn it will be high. The controller comes with a high learning curve as well and is fairly intimidating to people who would be new to gaming. AND! There are only 200 games! AND! STILL NOT A STEAMMACHINE

If you really want to build users for SteamMachine and the SteamOS best case would be to make the next Half-Life game, Half-Life 3, only available to download through SteamOS. MY RECOMMENDATION?

Overall, I don’t think it will work as well as Valve hopes it will. While it definitely will appeal to a niche market, it won’t be the game-changer that Valve wants it to be. FINAL THOUGHT NOPE NOT STEAMMACHINE

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