Phil Harrison Warns Valve That 'Hardware is a Really Tough Business' - Prima Games

Phil Harrison Warns Valve That ‘Hardware is a Really Tough Business’

by Prima Games Staff

Valve confirmed that it is putting its toe into the water of hardware manufacturing by financing the Xi3 Piston.  Phil Harrison, former PlayStation veteran and current Microsoft Studios executive, has a warning for Valve and other “micro-consoles” looking to break into the market.

“Entering the hardware business is a really tough business,” he said. “You have to have great fortitude to be in the hardware business and you have to have deep pockets and a very strong balance sheet. It’s not possible for every new hardware entrant to get to scale.

“They can be successful at small scale. But it’s very rare for a new hardware entrant to get to scale, and I mean tens or hundreds of millions of units. There are a very small number of companies that can make that happen,” he continued. “And it’s not just having a great brand or a great software experience. It’s about having a supply chain and a distribution model and a manufacturing capacity and all the things that go with it. It’s a non-trivial problem to solve and it takes thousands of people to make reality.

“I admire Valve as a company and what they’ve achieved with Steam. So I wouldn’t in any way criticize what they’ve achieved and the role they’ve played in the industry. But I’m not sure we would choose Steam as a benchmark of success. We would always seek to innovate and push beyond. Xbox Live as a foundation, the reach we have and the experience we deliver is a great place to build on,” Harrison concluded.

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