Linus Tech Tips recently shared details of a private meeting with Valve about the upcoming Steam Machine that suggests console-competitive pricing is off the table.
During the discussion, Valve asked Linus what he meant by “console pricing” for the device. He answered $500. According to Linus, no one at Valve challenged the number directly, but the energy in the room immediately shifted. He described the atmosphere as notably uncomfortable, interpreting the reaction as a clear sign that Valve’s internal price target sits well above that figure.
The Steam Machine is Valve’s second attempt at a living room gaming PC. It’s a compact cube-shaped device running SteamOS and designed to sit under a TV like a traditional console. Unlike the failed 2015 Steam Machines program that relied on third-party manufacturers, this is a first-party Valve product with standardized specs.
The hardware uses off-the-shelf x86 components with a soldered CPU and GPU on the mainboard. Early reports suggest it features an AMD GPU roughly comparable to or weaker than the PlayStation 5, paired with a stronger CPU than Sony’s console. It includes modern SSD storage and DDR5 memory, though final configurations remain unconfirmed.
The $500 benchmark matters because it’s where the PS5 launched. That price point has become synonymous with “console pricing” in the current generation. Valve’s awkward reaction to that number suggests they’re planning something significantly higher, with industry observers speculating a range between $600 and $800.
The economics explain why Valve can’t match console makers on price. Sony and Microsoft often sell hardware at thin margins or a loss, recouping costs through first-party games, platform fees, and paid online services. Their consoles are locked ecosystems where every game purchase feeds back to the manufacturer.
The Steam Machine is fundamentally different. It’s a full Linux PC that users can repurpose for anything. People can install Windows, use it for office work, or run it as a media server. If Valve sold it as an aggressive loss leader, buyers could purchase it purely as a cheap mini-PC and never launch Steam. The company would have no way to recoup those losses.
Linus ‘s reporting also suggests Valve told him they don’t plan to subsidize the hardware this time. This contrasts with the Steam Deck, where Valve priced the entry model close to cost. The Steam Machine appears designed as a margin-positive product from launch.
Component costs have risen sharply since the PS5’s 2020 debut. AI demand is consuming high-end chip production capacity. Tariffs on electronics imports have increased. Memory prices have trended upward. These factors make it nearly impossible to hit 2020 pricing targets in 2025.
The device’s technical positioning reinforces this reality. While it features a newer CPU architecture with better performance than PS5’s Zen 2 chip, the GPU reportedly falls short of Sony’s console. For gaming performance, the GPU typically matters more at TV resolutions. Steam Machine appears best suited for 1080p or 1440p gaming with upscaling to 4K output.
The prebuilt reality
Valve is positioning this as a niche enthusiast product rather than a mass-market console replacement. It’s sold directly through Steam’s store with limited retail distribution, similar to the Steam Deck. The target audience is people with existing Steam libraries who want a compact living room solution without a full tower PC.
That narrow focus allows Valve to accept higher pricing in exchange for better margins and lower risk. The device serves as both a product and a reference platform for SteamOS, advancing Valve’s long-term goal of reducing dependence on Windows.
