Phil Harrison warns Valve, Nvidia of hardware dangers

Microsoft corporate vice president and ex-Sony veteran welcomes new companies making hardware, but warns competitors it's a "really tough business."

In the week that Valve finally confirmed a long-running rumour that it would attempt to enter the hardware business, Microsoft corporate vice president and ex-Sony veteran Phil Harrison has issued a cautionary tale for the Half-Life and Steam creators.

Speaking about the raft of new microconsole announcements that came out of CES 2013, including Nvidia's Project Shield and the Xi3 Piston, Harrison said any company getting involved in the games industry is a good thing. "I think that any new entrant, without being specific to any company or brand or product, any new entrant into the games industry is ultimately a good a thing."

But Harrison was also quick to remind of the problems facing any potential hardware manufacturer. "Entering the hardware business is a really tough business, and 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, hundreds of millions of units. There are a very small number of companies that can make that happen.

"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."

Written By

Hi! I'm Martin, for some reason or another I have managed to convince the people who run GameSpot that I am actually wor

Want the latest news about Dota 2?

Dota 2

Dota 2

Discussion

229 comments
ilagas88
ilagas88

I wonder if they consider buying AMD since that company is on hard times right now. With the losses the company is experiencing, I doubt they have a high net value. They would be able to provide better hardware and prevent NVIDIA monopoly.

x-TwilighT-x
x-TwilighT-x

I think Nvidia has quite a bit of experience in the hardware industry. Albeit a different monster, concepts are similar, and while 3rd parties produce most of their hardware, I believe in them. Do I think they will take down Sony or M$... No, not right now, nobody will, not right now.

blaznwiipspman1
blaznwiipspman1

The nvidia shield is going to be a huge flop quote me on it. The steam box has potential

Shenstar75
Shenstar75

3rd party will be the hard ones to get on board with valve, linux/pc is just to easy and open to hack. People will buy the valve hardware but wont buy the games like they do currently for xbox. Despite xbox being jtag'd etc. it is quite difficult to do whereas pc/linux would be relitively easy to hack/mod i would think

VarietyMage
VarietyMage

And so the heavyweights send the message, "If you try to outdo us, we will outspend you".  As far as I'm concerned, get rid of all the consoles.  Computers are much faster and more adaptable.

RPG_Fan_I_Am
RPG_Fan_I_Am

I'm still waiting for Sega to return..... *waits*

wcwj26
wcwj26

 In other words "we don't know if Xbox is going to get lucky twice, so please don't eat into our user base"

OllieBrown
OllieBrown

Oh come on Martin!!  This is your second blatently misleading headine in three days!  You're own articles says it:

"I think that any new entrant, without being specific to any company or brand or product, any new entrant ..."

He's PROBABLY alluding to Valve and Nvidia but he is absolutely not warning them directly which your headline says without reservation.  The difference between the two (in my opinion) is huge.

MidnightMeteor
MidnightMeteor

So if I understand Phil right, I need to have people in China make all of my hardware. *Looks at checklist* Okay, check.

N4o7A
N4o7A

I certainly hope steam can prove otherwise AND stay humble... power corrupts

Nkosistryder
Nkosistryder

I'm all for the Nvidia Shield. I've always wanted to play my Steam games from my bed or in my living room. I love Steam especially because I've come across the best Indie games through it. Some Indie's I never bought because I didn't feel I could really enjoy them as much as I would if they were on a handheld. Now there's no excuse. Can't wait!

Trishan007
Trishan007

"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, hundreds of millions of units. There are a very small number of companies that can make that happen." Valve CAN :)

christosmage
christosmage

For me Nvidia poses a big problem for both Sony and Microsoft. As a leading GPU manufacturer they can really do damage to both companies. They can hog GPUs and licenses for there own consoles. At the moment as Shield is a portable system Sony is the one that should be worried because Microsoft has no portable system yet.

tightwad34
tightwad34

It's really nice to see someone looking out for others, but at the same time you sometimes have to let people learn from their mistakes. If they don't take heed and end up failing, then that's all on them.

jurk182
jurk182

thanks, phil. any more crazy truth-bombs you want to drop?!

WolfGrey
WolfGrey

Certainly is when your with microsoft....did so well on the 360 in the beginning right...?

PS3 yellow lights are at least for the most part user error from not keeping it clean and free of dust(i am serious if it yellow lights, open it up, you will be hugely surprised).

Wedge55
Wedge55

I am actually very curious about how Nvidia plans to distribute their upcoming system.  Nvidia as a company is heavily focused on R&D and licensing which leaves most manufacturing, marketing, and distribution to partners such as Asus and EVGA.  So the question is will one of their existing partners or multiple partners distribute the system?  Though Harrison's question about manufacturing is silly.  It'll probably be made by Foxconn like most consumer electronics and Nvidia products.

HellWolfHun
HellWolfHun

Interesting. So a representative from the least experienced gaming console manufacturer warns a company with more than a decade of hardware manufacturing experience and an other one yet to release a bad game or develop a bad business model. I own an Xbox 360, but facts are facts.

jarheadalex
jarheadalex

Valve and Nvidia have some great ideas, and both companies have massive respect from their customers, I really hope they both can pull it off. If the steam box allows you to take parts out and send them back (similar to the xi3 piston thing they invested in) for improved parts at a small cost and they market it with half life 3, I reckon it will do really well. 

onixevil
onixevil

In two years you should expect 8th gen consoles could gets beated by Tegra 6 . 

onixevil
onixevil

Like extended console life .

ItchyIsVegeta
ItchyIsVegeta

"warns competitors it's a "really tough business."......" Yeah so is PC software sales due to 'piracy', but that isn't a problem for Valve now, is it.  Great companies will innovate in great ways, and Valve is a great company. 

Sikrion
Sikrion

Valve should target people who are scared of pc gaming. make a base console with all the hardware parts EASILY (i am talking something like a cube with slots for various hardware parts) that can be easily slid in and out without dealing with the wires and screws etc. They will continue to sell hardware this way at the rate the people are ready to upgrade meanwhile us much more involved gaming crowd can use our custom desktops.

x-TwilighT-x
x-TwilighT-x

@VarietyMage Agreed. Except, more pricey for the same games a console can run. However, I really enjoy my pricey pc.

Devil_wings00
Devil_wings00

@Trishan007 Ya it was pretty dark days until a few years ago for PC gaming and Valve managed to turn that around and make PC gaming more profitable then it's ever been in the past. That said I am still very very skeptical about this stuff. This many consoles and handhelds is ripe for failure. It would be hard to imagine a world where so many different competitors can live in harmony. It's just bringing flashbacks to the 90's when every company under the sun tried and failed miserably to make a console. 

risako9
risako9

@christosmage 

If they hog their Hardware to themselves then how will the sales go? Of course, the demand will go down. and it's worse for Nvidia if both consoles developed their own hardwares then hogged developers to themselves. 

Amster_G
Amster_G

@WolfGrey No, YLOD is not user error... We are not the ones who are supposed to be cracking our PS3s open to manually clean it (warranty voiding galore). And you're talking about the original consoles too, not the slim models (and later ones), which do not seem to get YLOD, probably because Sony realized their design flaw (heating problems) and revamped their system.

emgesp
emgesp

@WolfGrey 

Still rocking my fat 60GB PS3 I bought in 2007. Never had to take it in for repairs.  Hopefully it lasts me until the PS4 arrives. 

WolfGrey
WolfGrey

@HellWolfHun Exactly mate.

Its like going up to Bethesda and saying hey, making a big game is hard man, you should be careful.

flyingdutchdog3
flyingdutchdog3

@Sikrion why would anyone be afraid of pc gaming ... my grandmother can put a pc together and she has no tech knowledge whatsover. I gamed on a PC from the 90's to 2005 ... then I bought a console and never looked back. And you know what? I don't miss it one bit.

eriktkire
eriktkire

@risako9 it could happen though.  I mean look at how indestructible everyone thought the original trinity was?

 Nintendo, Sega, Atari

The Playstation in particular is a perfect example of a company new to the console world making a huge splash.  The PS1 was the final big nail in the coffin of Sega's hardware department... Sony SHOULD be concerned this could happen to them.

christosmage
christosmage

@risako9 @christosmage They will hog tech for lets say a year for console manufacturers. Nvidia licenses tech to other manufacturers their sales in console components its very small its logical for them to move in as its a market they can exploit

oflow
oflow

@emgesp I still have my original ps3 from launch day as well.  Changed the HDD to a 500gb never had any problems with it.

Aragorn823
Aragorn823

@emgesp @WolfGrey My "fat" or Generation 1 PS3 (Changed to 500GB HDD) is still rocking from the very first day it was released in March 2007 lol.. I only just started learning what YLOD is hours ago as obviously it never happened to me (luckily)~ I also paid extra 2 years warranty for it haha...

tightwad34
tightwad34

@emgesp My 40 GBPS3 fatty I got in 08 just stopped running games about 3 weeks ago. It still does everything else, just won't read the disc I put in. I can still play downloadable games. I had to get a slim with 4 times the GB so it wasn't all that bad.

Ayato_Kamina_1
Ayato_Kamina_1

@WolfGrey @HellWolfHun Look at the steam store and then think of how it compares to playstation store and xbox. They've got the majority of the hard stuff already in place! I think they stand to do really well so long as they can get enough support from the 3rd parties and hopefully get themselves in on some exclusives.

Ayato_Kamina_1
Ayato_Kamina_1

@flyingdutchdog3 @Sikrion Truth be told, I've faded away from PC gaming quite a bit myself. But then I've faded from console gaming even more. As you get older I think you just lose the incentive and time you used to have to devote to games. Most of the games I buy for my PS3 I barely play to completion. 

eriktkire
eriktkire

@RPG_Fan_I_Am Nah the PS1 survived through the Saturn and the Dreamcast eras.  It's success was the marketing of games and gaming to the 20-something crowd.  I remember it had been around a year maybe and then it really just became THE console everyone that wasn't a little kid... that's what they people played.  Alone or at parties, it became a hugely acceptable thing..

 PS1 was what opened the gaming door to a mainstream audience too.  That was when people that considered themselves non-gamers were playing games.


The Dreamcast may have been better in terms of hardware and certain key game titles, totally agree with you on that... but the PS1 was the new golden era of next-gen fanboy marketing and new mega franchises.  Hell, it's the reason why NFS became such a power house (or maybe the other way around).

RPG_Fan_I_Am
RPG_Fan_I_Am

@eriktkire @risako9 Actually the PS2 was. Granted the PS1 did hurt Sega, the Saturn actually sold really well before it came out. Then the Dreamcast was simply ahead of it's time. I mean everyone talks about how MS created online, but they never think about how the Dreamcast had a built in modem at the time, better graphics, faster processor. Real shame.

Ayato_Kamina_1
Ayato_Kamina_1

@Aragorn823 @emgesp @WolfGrey I'm also still rocking the fatty from 07. Bought it the day it came out. Never been dusted or anything, hell i've dropped the 6-axis controller more times than i'd care to admit and even that still works fine. It's also nice to have the backwards compatibility. 


The 60gb HD has been a problem at times with downloading demos that can run in excess of 8gb, so hopefully they'll pay attention with the PS4 and give a serious storage capacity. Unlike the Wii U.

DiaTheSwede
DiaTheSwede

@tightwad34 @cinerius This happened a year or so back for me as well, was playing AC Brotherhood. Finally got a new ps3 this summer, but I was pretty annoyed by the fact that it broke down two weeks after my three year warranty expired. 

tightwad34
tightwad34

@cinerius I was playing Dark Souls when  it happened. I was at the bonfire right above the first blacksmith and right next to the path to Sen's Fortress. It glitched out very badly, so I turned off the system as carefully as I could and when I turned it back on, it wouldn't read the disc or any others.

cinerius
cinerius

@tightwad34  Out of curiosity... where you playing BLOPSII near the time your PS3 broke? I heard of quite a few PS3s not reading discs anymore after running that game.

Devil_wings00
Devil_wings00

@Ayato_Kamina_1 @WolfGrey @HellWolfHun Well if it plays PC games then it already has the majority of third party support. Very few third party games skip PC these days and it has more exclusive content then all other machines combined (Mostly Indie titles but a lot of them are great). Not to mention the growing FTP model which is now getting many great near AAA titles released using the business model. I'm skeptical but if it can actually do what they say and they market it correctly, it could work.

Phazevariance
Phazevariance

@Ayato_Kamina_1 @WolfGrey @HellWolfHun Except steam will be cross platform from steambox to PC to Mac and Linux.

flyingdutchdog3
flyingdutchdog3

@Ayato_Kamina_1 

Actually I haven't lost my love for gaming and I'd be ashamed to tell you what my age is lol. I think you go through high points and low points in gaming ... there are a few years I just didn't play much of anything cause family, work and other commitments had priorites. I am not a fanatic gamer or even a good gamer by any means, but I do love to play. I'm a senior who just didn't grow up lol.

bjornborgue
bjornborgue

@Ayato_Kamina_1 Good for you buddy, there's much more productive activities out there. I'd like to do the same but then the likes of Dota 2 and Dark Souls pull me right back in.