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.
