The idea of being able to play games on the couch from arguably the best gaming platform on the market sounds great. In fact many people are already do just that. But instead of the plug & play usability of a gaming console, serious PC gamers for years have setup their computers in the living room and ran an HDMI or other, more elaborate setups out to their TVs in order to get the lean back experience. Valve made that experience more user-friendly last year by releasing a version of Steam with tweaked UI to better suit couch surfers and controllers. The release of "Big Picture Mode" was an obvious signal that Steam was vying for a more permanent spot in the living room.
The "Steam Box" was supposed to be Valve's big push to get the Steam platform away from the desk and monitor and into the mainstream TV & living room area. It was to be small, attractive, and quiet, like a gaming console. The opposite of the stereotypical loud, glowing beast PC gaming rigs have looked like for years. And while on paper this sounds like a great idea, in practice it's a pricing, engineering, and logistical nightmare.
The CEO of Valve, Gabe Newell has said in interviews that he envisions "Good", "Better", and "Best" models of "Steam Boxes". The "Better" models being a mid-range unit using specific hardware that he's hoping to be priced around $300, while the "Best" models will be open-ended with any type of hardware on the market.
This is where we run into problems. We're entering into a new generation for home consoles which now dictate the direction of game development for a majority of games in the industry. That means there will be new game engines that will not be able to run on last generation hardware. The "Better" hardware Newell is speaking of seems to be targeting the current console specs. A $300 "Steam Box" will not be able to run most if any of the new games that come out after this year. Meanwhile the new Xbox and the PS4 will be around $400 (or less) and will play all of the latest games without sacrificing on performance.
In order to get a "Steam Box" capable of running all of the games that come out in the next few years the price of the machine will start at least at $500 - $700 and up from there.
Even if money was no object and customers didn't mind spending hundreds of dollars more for a "Steam Box" instead of a console, size and noise is still an issue. Consoles are engineered to be as energy efficient as possible, as quiet and possible and to run as cool as possible. Valve plans on having 3rd-party vendors manufacture most of the "Steam Boxes" which will come with off the shelf parts making hard to not compromise on either size or cooling. The more powerful the unit, the more heat it produces, the more space it needs for cooling.
Because of how much optimization is typically done to console hardware and its operating system, developers are able to get more from the hardware than a comparable PC. Which is why a consoles, which were released in 2005 & 2006, are able to create games that look almost as good as games running on modern PC hardware. Even though both new consoles will be using the same X-86 architecture that PC's are using this generation the optimization still gives them the edge to comparable hardware running on a PC, especially if its running Windows.
The "Steam Boxes" are said to be running on the Linux operating system which for now has a very limited catalog of games. Most of the games on Steam were developed to run on Windows with about a third of those capable of running on Mac. Linux by comparison has around 10% of the amount of games the PC has and most are of the independent variety and not blockbusters like Call of Duty or Bioshock.
Gabe Newell has been an outspoken critic of Windows 8 but said "Steam Box" will not restrict the installation of Windows. Though installing and running Windows will definitely eat into system resources. While Newell seems to want to trumpet the openness of Linux, it's going to take more than that to convince developers and publishers to create separate versions of their games for Linux in time for the release of the "Steam Box".
I'm not sure who the "Steam Box" is being targeted to. Serious gamers are able to build their own "Steam Boxes" and aren't waiting around to see what Valve is doing in the meantime. As soon a game comes out that isn't playable on their current machines they will update the part(s) that need to be updated, not buy an entire, already made computer. If Valve is trying to target the casual or console gamer they're missing that mark as well. The hardcore console gamer is used to buying subsidized hardware. At launch, most console makers sale typically sale their consoles at a loss, expecting to make back the money and more with game purchases. Even though Sony and Microsoft aren't expected to lose much money, if any at launch on consoles, they will still be a lot cheaper and just as powerful as Valves' "Best" option.
So if most serious PC gamers won't buy a ready made "Steam Box", serious console players won't buy one and casual gamers won't buy one, who the hell are they for? With the coming onslaught of marketing for two major consoles being released this holiday season, there will be no oxygen left in the room for Valve to get it's message across about the benefits of owning a "Steam Box". So either the mythical "Steam Box" is delayed until next year or it simply will never happen. PC gamers will be forced to do what they were going to do anyway. Build their own PC, install Big Picture Mode on their computer and run an HDMI to their TV.