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Alienware State Their Steam Machine Won't Be Very Profitable

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Alienware's general manager spoke to another site about his thoughts on Steam Machines and how he feels theirs will sell. The news comes from Wall Street Journal although unless you subscribe to them you won't be able to read the full article.

Frank Azor the general manager at Alienware stated this:
QuoteThis will absolutely be the least profitable system we ever sell.


It looks like Alienware are being realistic, Steam Machines will be a gradual build up and not an instant success in my eyes. I imagine other companies doing Steam Machines feel exactly the same about them.

It's a financial risk for a company to put out Steam Machines that much is obvious as if it flops they have a bunch of customized PC's they have to get rid of somehow. With Steam's massive user base it could sell better than a lot of companies think it will if Valve can push it enough, this is most likely why Alienware and other companies got involved since it has massive potential.

We have seen massive influx of Linux games in the past year and it looks to continue all the way through this year. The amount of articles we put up here is proof of that.

I will be buying a Steam Machine + Steam Controller myself to hook up to my living room TV even though I already have a pretty damn good PC since it opens up game streaming too. I do wonder how many other people will be looking to do the same.

What will you be doing about SteamOS and Steam Machines? Will you buy one to show your support or roll your own? Article taken from GamingOnLinux.com.
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25 comments
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Sslaxx 20 May 2014 at 12:29 pm UTC
Sounds like this might be Dell's first and last Steam Machine. Ah well, that's what you get for being an early adopter.
Imants 20 May 2014 at 12:38 pm UTC
I think I will use my current PC and dual boot Steam OS
FTW 20 May 2014 at 12:47 pm UTC
"This will absolutely be the least profitable system we ever sell."

Because Alienware can't sell it for 2x the price as they would with the rest of their computers.
Xpander 20 May 2014 at 1:06 pm UTC
yeah probably the statement is about the price they sell.. not that how many units they sell or how popular it is or gonna be.

its probably the competition that the build parts cost pretty much for such a small factor PC and the price they can ask for it isnt enough for them.
gemini 20 May 2014 at 1:34 pm UTC
Well I would probably have bought one if I would not have had two computers that are less then a year old. One running LM13 I already have connected to my TV with Steam big picture mode on + XMBC for some media though. I hope Valve will add some media features before official release.

When it comes to the fact about Steam machine vs PS4/Xbox One I don´t think they can compete in price for performance, but considering the price for games on console vs price on PC one may save some money in the long run. And I would not be surprised if Valve would include some of their own games with Steam machines.
Anonymous 20 May 2014 at 2:23 pm UTC
SslaxxSounds like this might be Dell's first and last Steam Machine. Ah well, that's what you get for being an early adopter.

i wouldn't say so. least profitable is probably meant with the fact they won't earn as much per unit as they usually do due to the fact they stated it will be sold for "competitive price with current gen", which is around $500.

2nd factor is that any machine is more expensive in early days than in later. for one you need to cover R&D costs, your Q&A warrants more work and you can squeeze extra part discounts with every next larger order, beside the fact that hw it self gets cheaper.

all hardware is conditioned to same rules. but, lower earning can be battled with quantity, which is probably what alienware is aiming for with low price
Cheeseness 20 May 2014 at 2:25 pm UTC
Xpanderyeah probably the statement is about the price they sell.. not that how many units they sell or how popular it is or gonna be.
I think you've hit the nail on the head there. This is an acknowledgement from Alienware that the type of premium they put on their more traditional range of machines won't fly in the Steam Machine marketplace.

There's still value in it for them though - having brand presence early in the Steam Machine ecosystem should firmly establish them there, and I expect that they'll be recommending Alienware branded peripherals to go with it (which they probably have a hefty markup on).
Anonymous 20 May 2014 at 2:31 pm UTC
Steam Machines IMO are going to be very price sensitive. Since most Linux Steam games could be served with a low end i3 with intel graphics & 2 GB Ram, in other words a sub $300 machine, Alienware with their premium hardware focus & traditionally less cost conscious customer could have a tough go of it.
Anonymous 20 May 2014 at 2:32 pm UTC
geminiWhen it comes to the fact about Steam machine vs PS4/Xbox One I don´t think they can compete in price for performance

lol, you have grand flaw in your comment. you shouldn't look today, look at the future. steam machines are yearly releases with years current hardware, ps4 and xbone are 7-10 with the same.

it is not even important if first incarnation beats ps4/xbone, all it needs is to start traction of adopters. even ps4 or xbone won't sell 50million in this year only. it is a process where early adopters start traction which is later followed by other gamers

but, here is the catch... either prices of ps4/xbone will drop to $100 in next 2 years, or they simply won't be competitive since their hw will be obsolete anyway. especially since this is 1st console gen that started with more or less mediocre hw unlike previous.
Shmerl 20 May 2014 at 3:10 pm UTC
I see no point in buying a Steam Machine when one has a regular PC with Linux already (if you want to attach it to the living room - just get some long cables for the video and wireless controllers). The new controller from Valve however is something I'll consider, if they indeed will make drivers open and push them into the upstream kernel. "Streaming" is useless for those who don't have Windows installed elsewhere, so it's not something that interests me.
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