It's not looking good for the Steam Machine

Added: 2026-05-31

[00:00:00]Valve is a problem, and it just got a lot more expensive. Now, sometime this year they're supposed to launch the Steam Machine, their living room gaming PC. The thing that a lot of us have been looking forward to since they announced it back in November. Now, there's still no price, and this week Valve gave us probably our clearest hint we've gotten about what the price is going to look like, and it's not it's not looking good. They jacked up the price of the Steam Deck, the 512 gig OLED went from 549 to 789.

[00:00:28]The 1 TB went from 649 to 949. That's $300 more, almost 50%, and the Deck itself, it didn't change. There's the same chip, the same screen, same everything. Valve said it directly that the hardware has not changed. So, if Valve will add $300 to a Steam Deck that didn't change, what do you think that means for the Steam Machine that they haven't even publicly announced the price for yet. Valve's reason for the Deck's price hike is straightforward, and we've seen it across the industry at this point, rising memory and storage costs. If you saw my last video, you know that the force behind that is the AI build-outs. That's what's eating the world's memory supply. Prices for RAM and storage have been climbing for months. That cost has been hitting gaming hardware this year very hard.

[00:01:10]Here's where the Steam Machine plays into all of this specifically. Valve already told us how they plan to price it. They plan to price it like a comparable PC. So, they're not subsidizing it, and they're not taking a loss the way that Sony and Microsoft do to sell their consoles. Now, you could argue Valve doesn't need to do it that way. They do take up to a 30% cut on games sold through Steam, and the Steam Machine uses Steam OS. So, they're going to make that money back on software either way. They could eat the hardware costs like Sony and Nintendo do, but they've decided not to. A Valve engineer was asked this directly whether they'd subsidize it.

[00:01:43]>> But, it's not going to be a sort of sub- subsidized device. Like, Valve is not going into this thinking we're going to eat a big loss on this so that we can grow market like share or category or anything like that, correct?

[00:01:53]>> No, it's more in line with with what you might expect from the current PC market.

[00:01:57]>> Yeah.

[00:01:57]>> Okay. So, that cushion that a lot of consoles use to keep the prices down, Valve is choosing not to use it. So, every dollar that the memory crisis adds to the Steam Machine is a dollar that lands on you if you buy it. Now, in Valve's defense, even if they want to subsidize the Steam Machine, they couldn't really do it the same way that Nintendo or Sony can. Nintendo has sold roughly 20 million Switch 2 units in its first year. The Steam Deck has sold around 4 million total in 4 years. Now, that kind of volume gap means that Nintendo can negotiate component deals that Valve just can't match. They're not playing in the same league as Nintendo, and that's that's a real problem for them right now. And they've already warned us about this. Back in February, Valve said these same shortages were forcing them to rethink pricing and timing of the Steam Machine and the Steam Frame. The Deck's price hike is just the first time that we get to see what that rethink does to the actual price tag. And here's the wild part. It sold out again within hours. The new prices, the $300 jump, none of that mattered. People bought it anyway. So, demand for affordable PC handhelds is so pent-up that even a 50% price hike couldn't slow it down. Like, think about what that means for the Steam Machine launch. And Valve isn't alone in it. The Switch 2 is going up $50 in September from $449 to $499, and Nintendo blamed the same exact memory shortage. Sony's raised PS5 prices more than once this year. The entire industry is repricing at the same time for the same reason.

[00:03:30]Valve's Steam Machine is about to launch into the worst hardware pricing environment in years. Now, when it was announced, I saw a lot of people guessing at the pricing of the Steam Machine. They were hoping that it would land around console prices, $550, $650.

[00:03:43]I didn't buy it then because Valve already said that they weren't going to subsidize it, but after this week, that optimism just looks like impossible. My honest guess here is that $799 is the absolute floor and even that feels way too good to be true. Now I'm thinking we're realistically looking at something closer to like $999, like $1,000, especially if it's bundled with a controller. And that's the disappointing part because the Steam Machine specs were never going to be like high-end to begin with. But a mid-spec box around the $1,000 price is a lot less exciting than the value machine a lot of us were hoping for. And my read is that this thing is going to launch two or $300 more expensive than Valve was aiming for before the memory crisis hit.

[00:04:28]So, through no fault of their own, but uh it doesn't make it any easier. The Steam Controller came out this month at $100, more than first-party PS5 or Xbox controllers are. And a lot of people felt that one, too. But within the first 30 minutes it was sold out. There's now a reservation queue Valve is still working through. I'm waiting in it right now. So, just like the Deck this week, people complained about the price, but then they bought it anyway. For years the Steam Deck was a category of its own, the affordable handheld PC, the thing that let you try this hobby for $400 without committing all of your savings. At $949, at least for the 1 TB, it's just not that anymore. The 1 TB is $50 less than the ROG Ally X, which is a more powerful handheld. And the cheapest alternative is the base Ally, which is around $500 on sale. And that runs Windows, which gives you like Game Pass and the full PC library, but that that comes at the cost of battery life and other things. And honestly, just for a lot of people who want a portable to recommend, the Switch 2 at $449 today before it's September hike and often bundled with a game has become the easiest answer, even though it's a closed Nintendo console and not a PC handheld at all. And you know, that's the part that gets me. It's that the category that the Steam Deck has created, the cheap, friction-free like doorway into PC gaming on the go, it just basically doesn't exist anymore.

[00:05:49]The $400 entry point is gone. The cheapest real option starts around $600 now. The good ones run around $1,000, and the easiest answer for a lot of people isn't even a PC at all. It's the Switch.