3 ms·

If these prices don't return back to normal I just don't see how Valves steam machine is less than $1,000 USD.

by wnevets 11mo ago

teaearlgraycold 11mo ago
They would already have contracts in place.
- wkat4242 11mo ago
  For a while, yes. But I'm sure they will want to sell it for longer than a year or so. Even Samsung is running into this issue now: their own internal foundry is refusing to give them a long term contract now so the S26 series will become more expensive. If this happens to Samsung, what leverage will a player like Valve have?
  - pixelfarmer 11mo ago
    > Even Samsung is running into this issue now [...] These large corpos are so greedy to the point they harm themselves. I remember something similar with Amazon, where the Amazon shop had to redo the whole architecture from some microservice setup back to a monolithic approach because they used AWS and paid these weirdly structured prices like everyone else. Which made running a monolithic architecture under such constraints inherently cheaper. Not sure what the resulting compounded business cost for this "endeavor" was, but more often that not such things are never accounted for, so they don't show up as an issue.
- energy123 11mo ago
  That's their costs, not our costs. Regular PCs will cost more, which means Valve can price their consoles higher and collect margin, because there's no other competition/substitutes.
  - swatcoder 11mo ago
    Maybe, but from a platform and brand development perspective, there may be smarter strategies. Their interest isn't necessarily in squeezing out the most margin on each unit. If unexpected market conditions let them more or less hit their original margin targets but get far more units installed in homes, that could be much better for them in the long term. There's a lot we can't know as outsiders, at the moment.
    - chii 11mo ago
      > that could be much better for them in the long term. i agree. Valve's money machine is with the steam platform, rather than any hardware sales - breaking even on hardware is sufficient imho. Valve's existential threat is from microsoft closing off windows somehow (or extracting rent...like a store!). Therefore, pushing steam machines which can be run without windows, is both business expansion as well as an insurance policy.
      - wnevets 11mo ago
        > i agree. Valve's money machine is with the steam platform, rather than any hardware sales - breaking even on hardware is sufficient imho. Wasn't that true with the previous incarnation of the steam machine, the valve index, steam controller, etc.? IIRC their VR gear was some of the most expensive consumer level gear on the market.
        chii 11mo ago
        Those controllers are first gen stuff - for the enthusiasts. They're expensive but not unduly so, not to mention that VR is still a niche, and is unlikely to expand the steam store. The first steam machine (steam box iirc) had both production issues and also not had much enthusiast success. Likely due to low hardware specs and not targeting the console market. The steam deck, and now the (newer) steam machine is looking to push into the mass market of consoles, and i reckon it would be more successful. Not to mention the more mature steamOS and compatibility layer now (compared to before). I have high hopes for it. I want PC gaming to break free of microsoft windows.
      - 11mo ago
- jmb99 11mo ago
  As someone currently dealing with pricing changes for DDR5 volume contracts (admittedly, only ~30k DIMMs, but still), those contracts are a lot less rigidly priced than we (engineering) realized at the time - “agreed price” is a lot more... flexible... until the pallet is delivered. Especially because our contract is with our manufacturer who has their own contract with a DIMM manufacturer who has their own contract with the DRAM manufacturer. DRAM is substantially more like a spot market than the average consumer would expect (at least at my volumes). The same is true for my HDDs (~100k unit/year contract) and my CPUs (10k unit/year contract). At least for HDDs our contract quantities are getting honoured (and we actually still have Seagate and WD fighting for our business), which I’ve heard hasn’t been the case for smaller orders.
  - Panzer04 11mo ago
    Yep. It's a bit like some gas projects when prices spiked due to Russia's attack on Ukraine. Companies had supply agreements in place but they will find essentially any excuse to "delay" delivery. You might eventually get your product but fat lot of good it does for you while you're mired in court and not getting anything anyway. The particularly amusing example is a project continuously selling spot LNG while saying it's not yet operational, stiffing the companies with which they'd signed long term contracts with on a technicality.
smallmancontrov 11mo ago
When Gaben's 11 organize a heist to steal the RAM wafers from the high-security vault in Sam Altman's basement, the price of the steam machine will drop below $1000 USD.
delfinom 11mo ago
In before Valve releases a video of their own DRAM manufacturing plant because "they always wanted to have one"

If these prices don't return back to normal I just don't see how Valves steam machine is less than $1,000 USD.

by wnevets 11mo ago

If these prices don't return back to normal I just don't see how Valves steam machine is less than $1,000 USD.

teaearlgraycold 11mo ago

They would already have contracts in place.

wkat4242 11mo ago
For a while, yes. But I'm sure they will want to sell it for longer than a year or so. Even Samsung is running into this issue now: their own internal foundry is refusing to give them a long term contract now so the S26 series will become more expensive. If this happens to Samsung, what leverage will a player like Valve have?
- pixelfarmer 11mo ago
  > Even Samsung is running into this issue now [...] These large corpos are so greedy to the point they harm themselves. I remember something similar with Amazon, where the Amazon shop had to redo the whole architecture from some microservice setup back to a monolithic approach because they used AWS and paid these weirdly structured prices like everyone else. Which made running a monolithic architecture under such constraints inherently cheaper. Not sure what the resulting compounded business cost for this "endeavor" was, but more often that not such things are never accounted for, so they don't show up as an issue.
energy123 11mo ago
That's their costs, not our costs. Regular PCs will cost more, which means Valve can price their consoles higher and collect margin, because there's no other competition/substitutes.
- swatcoder 11mo ago
  Maybe, but from a platform and brand development perspective, there may be smarter strategies. Their interest isn't necessarily in squeezing out the most margin on each unit. If unexpected market conditions let them more or less hit their original margin targets but get far more units installed in homes, that could be much better for them in the long term. There's a lot we can't know as outsiders, at the moment.
  - chii 11mo ago
    > that could be much better for them in the long term. i agree. Valve's money machine is with the steam platform, rather than any hardware sales - breaking even on hardware is sufficient imho. Valve's existential threat is from microsoft closing off windows somehow (or extracting rent...like a store!). Therefore, pushing steam machines which can be run without windows, is both business expansion as well as an insurance policy.
    - wnevets 11mo ago
      > i agree. Valve's money machine is with the steam platform, rather than any hardware sales - breaking even on hardware is sufficient imho. Wasn't that true with the previous incarnation of the steam machine, the valve index, steam controller, etc.? IIRC their VR gear was some of the most expensive consumer level gear on the market.
      - chii 11mo ago
        Those controllers are first gen stuff - for the enthusiasts. They're expensive but not unduly so, not to mention that VR is still a niche, and is unlikely to expand the steam store. The first steam machine (steam box iirc) had both production issues and also not had much enthusiast success. Likely due to low hardware specs and not targeting the console market. The steam deck, and now the (newer) steam machine is looking to push into the mass market of consoles, and i reckon it would be more successful. Not to mention the more mature steamOS and compatibility layer now (compared to before). I have high hopes for it. I want PC gaming to break free of microsoft windows.
    - 11mo ago
jmb99 11mo ago
As someone currently dealing with pricing changes for DDR5 volume contracts (admittedly, only ~30k DIMMs, but still), those contracts are a lot less rigidly priced than we (engineering) realized at the time - “agreed price” is a lot more... flexible... until the pallet is delivered. Especially because our contract is with our manufacturer who has their own contract with a DIMM manufacturer who has their own contract with the DRAM manufacturer. DRAM is substantially more like a spot market than the average consumer would expect (at least at my volumes). The same is true for my HDDs (~100k unit/year contract) and my CPUs (10k unit/year contract). At least for HDDs our contract quantities are getting honoured (and we actually still have Seagate and WD fighting for our business), which I’ve heard hasn’t been the case for smaller orders.
- Panzer04 11mo ago
  Yep. It's a bit like some gas projects when prices spiked due to Russia's attack on Ukraine. Companies had supply agreements in place but they will find essentially any excuse to "delay" delivery. You might eventually get your product but fat lot of good it does for you while you're mired in court and not getting anything anyway. The particularly amusing example is a project continuously selling spot LNG while saying it's not yet operational, stiffing the companies with which they'd signed long term contracts with on a technicality.

smallmancontrov 11mo ago

When Gaben's 11 organize a heist to steal the RAM wafers from the high-security vault in Sam Altman's basement, the price of the steam machine will drop below $1000 USD.

delfinom 11mo ago

In before Valve releases a video of their own DRAM manufacturing plant because "they always wanted to have one"