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."

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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.

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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."

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