Valve co-founder Gabe Newell didn't drop any major announcement bombs during his DICE keynote address, but he did provide insight into Valve's current, internal approach to the gaming industry. Newell discussed the evolution of Steam software within the context of future hardware, notably Valve's Steam Box, and stressed the continued importance of the PC.
As for the Steam Box's in-home PC streaming system, Newell said it would be a cheap addition to any TV, starting at $100 and eventually hitting $0. "The price point that's going to be hit is going to be much, much lower than things we've traditionally seen in living room devices. Better, it's basically a PC in the console form factor and at the console price point. There's nothing really magical about the hardware – this is the great thing about PC, is that it's been evolving so quickly."
Businesswise, make the in-home streaming experience a great one and it could serve as a gateway to high-end PC gaming, Newell said: "A user who has a great experience using in-home streaming is going to be much more likely to upgrade to a PC in a console form factor and then continue to invest."
The Steam Box will hinge on in-home streaming rather than cloud gaming, and Newell explained that he was a long-standing skeptic of cloud gaming. As he saw it, the cloud incurred a huge network cost that could collapse the system upon its own success, and it put latency compensation in the wrong place, at the center of the network rather than the edge.
"One thing we believe is latency sensitivity is going to increase in the future," Newell said. "The ability to do local, high-speed processing will become more important than it is right now."
Steam, of course, was founded on principles of cloud gaming, so it couldn't be completely written off. "I think there's a place for cloud gaming, but much more as a feature for things like demos and spectation, and not as a core architecture for delivering value to consumers," Newell said.
In terms of software, Valve's largest competitor and boon was the community itself. "In TF2, just to be really clear, the community itself makes 10 times as much content as we do," Newell said. "We can't compete with our own customers. Our customers have defeated us. Like, not by a little; by a lot."
Maximizing the economy of user generated content was the way to go, with stores as collections of this content, Newell said. "It's like we're this bottleneck on the system. When you think about the direction that our industry is going, there's nothing that says we should have any curation at all in our stores. Consumers should pull content through distribution frameworks, but this notion that somebody is acting as a global gatekeeper is sort of a pre-internet way of thinking of that." Huh – sounds familiar.
Even if all of Valve's instincts turned out to be wrong and the Steam Box tanked, Newell was confident that at least it would put on a great show.
"If we're wrong, at least it will be spectacularly entertaining as a failure," he said.