Valve’s Steam Machine Is Beating Xbox at Its Own Game

Imagine a compact box, and inside is a jumble of PC parts: a CPU, RAM, SSD, and a cleverly engineered thermal apparatus to keep everything cool under pressure. This box is meant for running demanding games at a fair clip. It’s designed to allow developers to create games around the system without any difficulty working with non-standardized hardware. Right now, I’m describing Valve’s newly revealed Steam Machine. Five years ago, I could have been describing an Xbox. But not so much anymore.

After years of attempts at making Steam Machines viable, Valve understands the benefits of consoles in today’s gaming landscape. The Steam Machine fits a niche of people who can’t afford a high-end PC but still want to play their PC game library while lounging on the couch. Valve promises that it will take the best of the Steam Deck and bring it to the console. This includes everything from the Linux-based SteamOS with its easy game navigation to the handheld’s sleep and wake functions that let you jump back into your games without needing to fight against Windows.

Valve Deckard and Roy, Steam Controller 2, and this new Fremont device all at once…

It reminds me of when Valve shown off the crazy “Steam Universe†of hardware products at GDC 2015

10 year anniversary of that is next year 🤯 https://t.co/oRby3fGaVj pic.twitter.com/rihkUQL9RW

— Brad Lynch (@SadlyItsBradley) December 6, 2024

Microsoft seemingly intends to bring PC and Xbox together. If you’ve tried to navigate Windows recently—between all the popups, the focus on Copilot AI, and the awkward bugs that hamper PC gaming—migrating to SteamOS sounds like an enticing proposition. It’s not as if you will be completely blocked from accessing your full game library. An active developer scene has enabled players to play their Epic Games library through the SteamOS interface. You can also get emulation running on Linux-based systems very easily. The only thing missing is Xbox Game Pass.

New hardware isn’t nearly as important as a rock-solid OS

Valve’s roughly 6 x 6-inch console is just about half the size of the Xbox Series X, yet it promises to offer power equivalent to just below the PlayStation 5, according to Digital Foundry. While the Xbox Series X and PS5 were designed based on AMD’s Zen 2 microarchitecture, the Steam Machine is using the more recent Zen 4 CPU and RDNA 3 GPU architectures. That’s still not the cutting edge of AMD’s latest graphics architecture. The Steam Machine won’t run AMD’s FidelityFX Super Resolution 4 technology, which is hardware dependent on RDNA 4 found in its most recent Radeon RX 90-series GPUs.

What matters more than the latest chip architecture is if Valve’s console can feel seamless. Console gamers don’t want to fiddle with graphics settings. They don’t want to adjust controls and download new controller profiles. They just want to turn on their console and get right into gaming. Valve has promised to introduce a Steam Machine Verified badge to supported games along with another badge for its new Steam Frame VR headset. We just need to see how Valve calculates what makes games a good fit for Steam Machine. If it can enforce a minimum of 60 fps at 4K resolution, then most gamers will be satisfied. At the bare minimum, Valve says that if a game is already Steam Deck Verified, it’ll automatically be verified for the Steam Machine.

Chief of Microsoft’s gaming arm, Phil Spencer, went as far as to congratulate Valve on its new hardware, hinting that it plans to release something similar in the future. Whatever Microsoft eventually debuts will now have to compete directly against the Steam Machine, as well as potentially new PCs running SteamOS instead of Windows.

Gaming moves forward when players and developers have more ways to play and create, especially across open platforms. 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… https://t.co/Z9lDCZz1my

— Phil Spencer (@XboxP3) November 12, 2025

PC gaming has long been hardware agnostic. Those developing for PCs today need to ensure their games work with a massive variety of component vendors to squash any incompatibilities or bugs. With the Steam Machine, developers can focus their efforts on making their games run well on a specific platform, so long as it seems worth the hassle. Valve may have enough pull in the games industry to ensure those partnerships. Developers like Owlcat, the creators of Warhammer 40,000: Rogue Trader, and Larian Studios of Baldur’s Gate 3 fame, recently launched patches that made their RPGs run much better on Valve’s handheld. Meanwhile, the Asus ROG Xbox Ally X handheld running a version of Windows called the “full screen experience†uses “Handheld Optimized†or “Mostly Compatible†badges on some games. Even with the badge, you still have to go into the graphics settings to ensure each game runs properly.

Just needs a price

There’s still a question of price. Valve says the Steam Machine, along with its Steam Frame VR headset and new Steam Controller, will arrive sometime in early 2026. The highest-cost Steam Deck OLED with a 1TB SSD is $650. With the Steam Machine promising six times the performance of a Steam Deck, shouldn’t it cost more as well? That depends on how much Valve plans to subsidize its hardware.

Steam is such a dominant force in PC gaming that a recent survey of industry executives found that most felt Valve’s game platform is a monopoly. The entire reason Valve’s hardware exists is to keep players buying games on Steam, giving Valve that sweet, sweet 30% cut on purchases.

What matters more than the Steam Machine’s price is ease of access. There’s a reason the Switch 2 has sold so damn well this year. Nintendo’s handheld promises exclusive games and a seamless experience. Valve, which owns the most dominant gaming platform on PC, has the opportunity to shift its legion of players away from their desks and onto the couch. At that point, Windows will have a harder time making room for any new device on players’ TV stands.