Valve’s CEO explains that the price of the Steam Deck is “painful” for the company. However, the new Steam console needs an aggressive pricing policy if it wants to establish itself in the market in the long term.
Who is speaking? Gabe Newell is the CEO of Valve, which also owns the Steam platform. On the occasion of the official presentation of the “Steam Deck”, he gave an interview to the online magazine IGN.
What does he say? In the English interview with IGN, Newell explains that the price is a painful thing for him and the company. He says (via IGN.com):
I want to take this in hand and say, oh, everything works. Everything is fast. Everything is … and then the price point was secondary and painful. But that was clearly a critical aspect. But the first thing was performance and experience, [that] was the biggest and most fundamental limitation that drove this.
Gabe Newell, CEO of Valve, via IGN.com
When it came to performance, one did not want to make compromises, and if you look at the specs of the “Steam Deck,” it certainly appears that way at first glance. Instead, one is clearly deviating from the pricing policy, which is likely to be “painful” for Valve.
Valve’s hardware director, Shreya Liu, confirmed Newell’s statement, saying that the price was crucial from the beginning. “We knew that the price point was very important, so […] we made sure from the beginning and worked very, very hard to reach the price point we are at now.”
In any case, the price seems to be working, as the pre-orders for the Steam Deck are already overwhelming the servers.
That’s why such a policy is not unusual: Such an aggressive price is not uncommon in the hardware industry. Manufacturers like Sony have also deliberately sold their consoles below their value to establish their consoles and then recoup revenues through subscriptions or digital sales.
With the PlayStation 4, Sony learned something from the problems with the PS3 and sold the PlayStation 4 at a significantly lower price:
Valve pursues an aggressive pricing policy with the Steam Deck
That’s why the price is so important: The price is “painful” for Valve but serves a clear goal, as they want to establish their new console in the long term and “establish a product category” with the Steam Deck that should function in the long term and offer various advantages.
And in order to establish the product and bring it to market quickly, Valve is willing to adopt an aggressive pricing policy. Newell says: “So we are definitely… our viewpoint is… we are doing this for the long term. And there are a lot of possibilities.”
With a starting price of around 400 Euros, it ranks under the next-gen consoles PS5 and Xbox Series X, which cost 499 Euros. For a current gaming PC, you currently need to spend at least 800 Euros or more if you want to game properly. Because graphics cards are still very expensive and hardly available, but at least the prices for graphics cards are currently dropping again.
And that is likely to become a problem that Valve might face: The question remains whether Valve can actually meet the high demand for the “Steam Deck”.
