Alienware's Steam Machine will be their "least profitable system" ever

Citing a need to compete with Microsoft and Sony, Alienware isn't expecting their Steam Machine to drive hardware profits.

After the glut of information about upcoming Steam Machines during this year's CES, new details have been hard to come by. But speaking with the Wall Street Journal, Frank Azor, general manager of Dell Inc.'s Alienware game-PC division, said that they don't expect the their Steam Machine to be a large profit driver.

"It's going to be very challenging. This will absolutely be the least profitable system we ever sell," Azor said.

While Alienware has yet to provide an official price for their upcoming system, they have said before that they plan on being competitive with current consoles. However, those statements were made before Microsoft introduced their Kinect-free $400 system, putting it at price parity with the PS4.

The article does not delve into why Alienware feels the need to take that risk outside of the "power of Valve," but Azor has said previously that updates to their hardware will come regularly. "We will be updating our Steam Machines every year. The platform will continue to evolve as the games become more resource intensive."

Valve showed off a reconfigured version of the Steam controller back in March, and that it will be available this fall, followed by the actual Steam Machines. Valve typically doesn't have a presence at E3, but we expect to hear some new details about Steam Machines from other developers during this year's conference.

Justin Haywald on Google+
Got a news tip or want to contact us directly? Email news@gamespot.com

Did you enjoy this article?

Sign In to Upvote

justinhaywald

Justin Haywald

Senior Editor, Earthbound fan, and snazzy dresser.
Heron: Steam Machine

Heron: Steam Machine

Follow
198 comments
deadpen
deadpen

Alienware LOL most pc gamers can build a system to match or out preform their product for half the cost.

Megavideogamer
Megavideogamer

Alienware Steam Machine to be the least profitable. Alienware gaming PC's are somewhat expensive to begin with. So an Alienware Steam machine will still be expensive compared to other Steam machines, Consoles and gaming PC's

Alienware is a decent enough gaming PC, But Expensive so most people just build their own PC for gaming. The Alienware Steam machine may not be as an appealing offer do to the expensive asking price. I guess their is no build your own steam machine option

FuzzyPancakes
FuzzyPancakes

@Megavideogamer  They are trying to compete with Microsoft and Sony with their product, so they are aiming for similar specs and a similar price, which is what a lot of other Steam Machine makers are going for as well, so if you think the new consoles by Sony and Microsoft are expensive then yeah I guess it will be expensive... even though neither Sony nor Microsoft has made a profit yet, and isn't expected to make a profit for quite a few more years.

onezerofive
onezerofive

Steam machines are never going to prosper in the gaming ecosystem...


Console gamers want games built around their system, which will not be the case for steam machines. PC gamers like a system that can be upgraded; the bulk of steam machines do not have this capability.


These devices do not appeal to either side of the market; they didn't build these with the consumer in mind.

grenadehh
grenadehh

@xantufrog @onezerofive @sexyragu Am with you. SteamOS has a long way to go to be even half as complete a package as Xbox or PS's OS though. I can't imagine these machines will be out any earlier than 2015. Unless SteamOS right now looks completely different than Steam or even Big Picture, they've got a lot of work to do - Big Picture right now is just a distraction, an overlay to the same Steam GUI that's been around for 11 years.

FuzzyPancakes
FuzzyPancakes

@xantufrog @onezerofive @sexyragu  No games will be optimized to run on the consoles (Steam Machine), or the OS, so I don;t see the benefits of owning a Steam Machine over a console or a PC... and I don't understand why a PC gamer would want to buy another PC/Steam Machine when they could just upgrade their own PC they already bought for less money then buying a Steam Machine.

sexyragu
sexyragu

@onezerofive  They can be upgraded, although I don't know about this particular model. The point is that Valve wants to bring in gaming PCs for the living room. 

onezerofive
onezerofive

@sexyragu @onezerofive  actually, only like half of the steam machines models are going to have upgrade capabilities. And many of those have limits on what can be upgraded. 


The reality is you can already connect a PC to a TV, and it's much cheaper to build a PC than buy a steam machine. Some of the designs are appealing from a vanity standpoint, and I believe that will be the driving factor for the few people who purchase the machines. But the bulk of PC gamers already own a bad @ss rig that can be upgraded... the bulk custom build their machines at a fraction of the cost... steam machines will not fair well in the market.

xantufrog
xantufrog moderator

@onezerofive @sexyraguI thin you are focusing on the wrong thing: any PC (provided it meets the minimum specs Valve imposes to help game development a la consoles)  can be a stea machine. The real magic of "steam machines" is the free streamlined OS. This is striving to give the benefits of console ownership to PC gamers on a free open platform.

tommynj
tommynj

Least profitable and yet the public has no idea of the specs or price range of this particular machine. Stupidity at its finest...

gix47
gix47

wow,this really told me nothing.

Verenti
Verenti

@gix47 Not true, it told you that the Xbox One had a price cut putting it on price parity with the PS4.

NetGod
NetGod

"This will absolutely be the least profitable system we ever sell," Azor said.


This should be your first clue. The first BIG clue that lets you know your company may not be best suited to build this specific product. Whatever happen to using common sense? 

grenadehh
grenadehh

@killjoi @tomservo51 @xantufrog Over 2000 dollars in labor/convenience bullshti costs is an extreme waste of money. You must think your time is quite valuable. In reality what you're going to do with that time is sit there, drink a beer, and piss around on the internet and accomplish nothing. 


Or you could just spend 2 hours putting together the same components you'd buy in a Dell gaming computer and have a good amount of money to start funding a vacation.

grenadehh
grenadehh

@meatz666 Alienware is nothing but pron. It's there for you to look at when you're bored and want to see just how expensive of a computer you can possibly put together, then imagine spending $20,000 if you were rich and too stupid to do it yourself. Even for people working full time, you have 2 to 3 hours to build a computer and screw with it. I know that for a fact (though I did purchase my last gaming computer for that very reason - but that was reason was I'm lazy, not "I don't have the time.")


Otherwise, you're not a PC gamer, a gamer, and you certainly aren't a "computing enthusiast" or computer nerd.

meatz666
meatz666

@xantufrog  That's a lot of prejudice right there. I build my own machine since 1998, but since I have no time to mess with hardware software because I'm WORKING most of my time, I bought a nice Alienware. Every PC gamer wanted an Alienware at some point.

Last thing I am is lazy. 

xantufrog
xantufrog moderator

@tomservo51 lazy gamers with lots of money?

killjoi
killjoi

@tomservo51 @xantufrog  I've built many computers over the years. My next gaming PC will likely be a Steam machine.  Paying the "extra" cost is effectively paying for labor.  Time now is more valuable to me and I'd rather do that than build my own.


There's nothing wrong with this, nor is there anything wrong with doing the opposite.

shadow580
shadow580

@killjoi @tomservo51 @xantufrog  I think he's referring to the premium price that you're paying for the Alienware brand with all the bells and whistles. Buying a pre-made PC doesn't have to be a bad choice at all.

xantufrog
xantufrog moderator

I don't get how some folks are so anti-steam machine. It's just a PC with a FREE gaming-optimized OS. You can build one yourself if you don't want to buy Alienware's overpriced hardware. FREE gaming-optimized OS. If it doesn't take off it doesn't take off, but I don't see why such a thing should be actively discouraged.


And if it does prove popular it means Sony and MS will just have to continue to step up their game. So we the gamer's continue to win.

McGregor
McGregor

@xantufrog  I think the problem with the Steam Machine is that it's a solution to a problem that doesn't exist.

xantufrog
xantufrog moderator

@McGregor @xantufrogI'm not sure it needs to be solving a "problem". But products continue to evolve and improve, and we currently have consoles that are not upgradeable or customizable, and are expensive to develop for. Similarly, we have gaming PCs that are in the clutches of MS and DX with an OS that due to its multipurpose design is poorly optimized for gaming. There is room for improvement

shadow580
shadow580

@McGregor @xantufrog  why do steam machines have to have a specific role? I look at them like any other pre-made gaming PC except that people who aren't tech savvy can buy those instead of the one from their nearest hardware shop. It's easier making comparisons between different steam machines that belong to the same lineup than some pre-made setups that differ quite a bit from one another, depending on the shop.


The PS4 and Xbox One kinda under delivered in terms of performance so I see steam machines having a shot since developing multiplatform games should be easier with everything having PC architecture. When the Xbox 360 launched, it was extremely powerful and blew most PCs out of the water when it came to gaming because it had been specifically developed for that role.

ggregd
ggregd

@McGregor @xantufrog  They're not solving a problem, they're creating another option.  iPods were made to sell music via iTunes, Steam Machines are made to sell games via Steam.  The successful precedent is there, the appeal is ease of use.

But like I said, the closed system is just one option.  iTunes and Steam work with other platforms as well.  Maybe not with the same ease of use and compatibility as their dedicated machines, but the options are there all the same.

McGregor
McGregor

Alienware is the Apple of the PC industry. Charging 6x the cost of building one on your own.

Hurvl
Hurvl

But that doesn't seem to have made them more (Alien)wary about making a Steam Machine in the first place. I don't know how these Steam machines will be treated by the public, but I'm fine with my gaming laptop and then I'll probably buy a regular desktop PC.

sonicblast19
sonicblast19

An overpriced POS not selling well,who would've had thought.

grenadehh
grenadehh

@russelsviper89 @collingtonuk @sonicblast19 No he's basing it on 2 decades of previous observations of Dell, most likely. Especially observations of Alienware, both before and after Dell bought them. They were even worse before Dell owned them.

G4mBi7
G4mBi7

There once was a time when alienware was a recognized manufacturer of high end gaming rigs, everyone wanted one, not everyone could afford one but it was not only the brand you were paying but, it was the quality of the parts, the assembly, the customer support, the peace of mind, i wonder what happened?


Oh wait, dell bought them. . . Oh dell, go F yourself!

grenadehh
grenadehh

@G4mBi7 You people do all realize, right, that "the parts" are literally the parts you would buy off tigerdirect, amazon, ebay, or in a store?


It's not Apple. They aren't paying "employees" in China/Taiwan 5 cents a day to stamp a generic Alienware flavor on standard parts that cost no money otherwise.


So there's no "quality of parts" concept with Dell. They use the same shit as any mom and pop store. Quality of build, maybe, and customer service, that is what you're paying for. Nothing else. Basically an assurance that people who are A+ certified built your computer, if you're too ignorant or inexperienced and don't trust yourself to do a better, more affordable job.

GSGuy321
GSGuy321

Steam just posted pre-orders for Gauntlet (the remake). I loved that game growing up as a kid.

McGregor
McGregor

@GSGuy321  I'm hoping to see it on a summer sale (I know, fat chance) and pick it up...even if it's only 10% off. It was one of the games that ate up my childhood, and it was great!

JimmeyBurrows
JimmeyBurrows

Ah, Alienware... The Wacom of the PC world... Thankfully there's enough competition to ignore them.

andrew_ribbons
andrew_ribbons

I don't actually see how Alienware are -so- expensive any more.  Take their normal gaming systems which range from $600-800 and you get a pretty reasonable machiine.  Yes it's not custom-build cheap...but....duh?!

Agentbling
Agentbling

Well now I can see Alienware is just as uninterested in their Steam Machine as everyone else.  People who want Steam Machines already have PC's.  People who want consoles already have one.  Please don't feel the need to compete on the gamers behalf.  I don't think anyone cares about the idea of a company so famous for ripping people off building their "least profitable" system.  Boo friggidy hoo.

themc_7
themc_7

slice the price in half and let's talk. The idea of the steam machine is cool, but they are way too expensive. Any self respecting PC player can build their own machine for way cheaper.

mkeezay22
mkeezay22

@LittleMac19 Maybe it's called Alienware because after you pay their crazy prices you feel like you've had an anal probe