Speaking with Eurogamer, corporate vice president Phil Harrison said Microsoft will keep a close eye on Valve as the Portal studio pushes into the living room with its new technology.
"The announcement was only made last night so I'm still studying all the facts Valve has released. But Valve is a very impressive company, and obviously we're going to be watching what they do with great interest," Harrison said.
For Harrison, Valve's eagerness to move into the living room with Steam Machines speaks to an interest gamers continue to have in console-based experiences.
"But it actually goes back to an earlier question. I think the death of the video game console was prematurely announced," Harrison said. "Clearly there is a lot of excitement around gaming in the living room on the biggest screen in the house, often times connected to a great sound system and creating that real intensely high quality game experience with a very powerful CPU and a very powerful GPU."
"Our point of view, clearly, is that Xbox One is the best incarnation of that, but competition is good!," he added.
Valve has a third announcement for this week planned for Friday, September 27 at 1 p.m. EDT. The developer has teased that this announcement may be related to a proprietary controller.