Can everyone please stop claiming and speculating that Valve’s new hardware will be loss leaders? If you watch LTT and Gamers Nexus’s first videos on the announcement, they actually spoke with Valve’s engineers. And the Valve representatives already said that the new hardware WILL NOT BE LOSS LEADERS.
There isn’t even evidence that the Steam Deck was a loss leader. All GabeN said was that the lowest cost launch model was priced “painfully”, which doesn’t necessarily mean it was sold at a loss, it could easily have been sold at a very tight margin.
And no, low margins does not meet the definition of a loss leader. A loss leader is a product sold below cost, in that every unit sold actually costs the seller money.
I get the desire to speculate on new hardware. It’s fun and it helps pass the time until we hear more info from Valve. But there’s limits to what is reasonable. Valve has already stated that the new hardware won’t be loss leaders, so hoping and/or claiming they are isn’t reasonable.
Sorry for the rant, but all of the comments that seem to have only skimmed headlines are quickly getting to me
Since they’ve said it’s basically an entry level gaming PC that will cost more than a console, I think the >700, <$1000 speculation is most likely.
Is that part of the quote? Because I just saw “priced like an entry level PC, not like a console”, which was more ambiguous than saying “priced like a console”. One man’s entry level PC is $300, and another’s is $1000. I have a mini PC with the power of a PS4 Pro, which I’d easily consider entry level, and it cost me $530 about a year and a half ago.
I’m right now in the process of building an “entry level PC” from components, here defining it as new currently produced off the rack parts, no used, no refurbished, and with a Ryzen 7500F and a Radeon RX7600 “AMD can’t decide whether their cards get an XT or not, so why should I?” I price it out right at $900. To go much below that, I’m gonna have to resort to some jank.
Dumpster dive a core i5 10400F Optiplex, stick a GTX-980 in it, install Linux Mint and you’re making 120FPS in CS:GO for the price of a foot pic.
Your entry level PC is what I would have called high end as little as four years ago. I built a machine in 2021 with a Ryzen 5 5600x and an RX 6800 XT; it still runs the latest UE5 games at high settings. I would call that above and beyond entry level.
It’s possible I’m just interpreting the quote wrong. I figured they were making the distinction between “console” and “entry level PC” as a way to say “The price isn’t set yet, but don’t expect this to be $400-500”
Yeah, leaving it ambiguous like this leads to wild speculation, and I think you misquoted that with your own assumptions. You might be right, but Digital Foundry seems to think $400-$500 is possible. Given the cost of my own mini PC, which is older and requires higher margins than Valve can get away with, I would even believe $400-$500. But we just don’t know. Everyone’s best guess for the price of this thing has a low floor and a high ceiling, which will make this all really funny once we know the actual price.
I will be so impressed if they manage that. It would be a day 1 buy for me at that price.
I know they don’t have the same supply chain at all but Apple sells an entry Mac Mini for $600. That makes me feel like a similarly priced Steam Machine is possible.
Apple mini is a hard comparison to make because the cheapest mini is a loss leader. Add a bit of extra ram or extra storage, which you have to do since the base model is very limited and the only way to get it is through Apple because everything is soldered together, then it is suddenly more than a $1k PC. They make the profits up with those upgrades which are practically mandatory and grossly overpriced.
The cheapest mini ain’t a loss leader if no one buys it
I wouldn’t be sure the mini is a loss leader…
Let me show the math:
The base M4 model is 16GB ram and 256 GB of storare and it costs $600, “cheapest minipc ever with such performance”.
The 512GB storage model costs $800.
May I point out that 256GB of ssd storage does not cost $200.
The 24 GB model costs exactly $1000.
No matter how much ram prices are ramping up right now, 8GB of sodimm ram does not cost $200…yet.
Anything else above those specs throws the Mac mini into $1k+ territory. It can go all the way up to $2600.
Now, Apple rarely publishes manufacturing numbers to the public. But historically this has always been their strategy. A base product that seems too good to be true (because it is) that leaves buyers wanting a bit more. For which they get skinned alive, price wise. Of course, I can’t be 100% certain that the base Mac mini is sold at a loss. But evidence suggests the $600 mark is priced exactly to act as a loss leader.
That’s just pointing out upgrades carry a large price, not that the base model is at a loss.
Which is a super common strategy in pre built, especially in systems that can’t in theory take third party upgrades. Commonly a mobile platform will charge a hundred dollar premium for like 20 dollars worth of UFS storage. At least at some points PC vendors have done DIMM SPD lockouts to force customers to first party so they can charge a significant multiple of market rate for their parts.
I doubt anything in Apple’s lineup is sold at a loss. They might tolerate slimmer margins on entry, but I just don’t think they go negative.
You didn’t present one piece of evidence that $600 is a losing price point for the base model (and you even stated that explicitly). All you’ve done is shown that Apple is known for their outrageous markups; something we all can see with our own eyes.
Given they’re greedy enough to markup storage and ram so much; I’m willing to bet they won’t bother with techniques like “loss leaders”. I bet the margins are just extremely tight but that profit is above zero.
Not like a console says not a loss leader to me.