Building a Dirt Cheap Steam Machine

I may end up waiting to see what Valve's first party steam machines look like, but I think it's relatively safe to assume that a custom rig will be a better value. Any way I'm thinking about building a lower end rig, possibly built around the aging nvidia 8800GT ($30 on ebay). Basically I'm looking to build a dirt cheap box that can play low spec steam games and run the steam os. I have a beefy custom desktop for serious gaming and am really just looking for a way to play older/indie steam games on my tv. I will likely dual boot steam os with windows xp so I can play gog games as well (and do so with fewer compatibility issues). $300 or less would be amazing. Any tips?

Pretty much the most graphically intensive game I would want to play on this thing would be something like X3 Albion Prelude which supports Big Picture Mode and has the following rec specs:

• • Recommended:

• • OS: Windows 7, Vista SP1, XP SP2
  • Processor: Intel® Core™ 2 Duo or AMD® equivalent at 2.0 GHz
  • Memory: 3 GB RAM
  • Graphics: 256 MB 3D DirectX 9 Compatible video card (not onboard) with Pixel Shader 3.0 support
  • Hard Drive: 10GB of free space
  • Sound: Soundcard (Surround Sound support recommended)

Right now I'm thinking:

http://www.amazon.com/Intel-i3-3220-Dual-Core-Processor-Cache/dp/B0093H8HXS/ref=sr_1_1?ie=UTF8&qid=1384820055&sr=8-1&keywords=i3+processor ($130)

http://www.amazon.com/Gigabyte-Intel-Micro-Motherboards-GA-B75M-D3H/dp/B007R9CRGW/ref=sr_1_1?ie=UTF8&qid=1384820093&sr=8-1&keywords=i3+motherboard ($65)

http://www.ebay.com/itm/XFX-GeForce-8800GT-512MB-DDR3-PCI-E-x16-Alpha-Dog-Edition-Video-Card-PVT88PYDF4-/251379459254?pt=PCC_Video_TV_Cards&hash=item3a876224b6 ($35)

http://www.amazon.com/Cooler-Master-Elite-Power-RS460-PSARI3-US/dp/B002G1YPHK/ref=sr_1_1?ie=UTF8&qid=1384820341&sr=8-1&keywords=400+w+psu ($30)

http://www.amazon.com/Kingston-1600MHz-Non-ECC-KHX1600C9D3B1-4G/dp/B0057Q4AGW/ref=sr_1_1?ie=UTF8&qid=1384820383&sr=8-1&keywords=ddr3+4gb ($36)

http://www.amazon.com/Western-Digital-AV-GP-WD5000AVDS-Drive/dp/B003DN39R2/ref=sr_1_5?ie=UTF8&qid=1384820924&sr=8-5&keywords=300gb+hdd ($65)

http://www.amazon.com/Corsair-Carbide-Series-Compact-CC-9011023-WW/dp/B009GXZ8MM/ref=sr_1_4?ie=UTF8&qid=1384820544&sr=8-4&keywords=atx+case ($52)

The total comes to about $400. Any way I could cut this down?

You might want to look at amd apus. They can run most modern games at lower settings and you wouldn't need to worry about a video card.

A good APU would be a good option. Even for $30 an 8800GT isn't a great buy, it's pretty old so failure would be likely. You good probably get a more recent used card with twice the performance for $50 or less

I think kraken's idea is a great one. The APUs are awesome not only do they have a beefy intergerated GPU, but room saver for a smaller case if you wanted.