Valve has learned to count to three—Xbox is in trouble. Why the Steam Machine and Steam Frame announcements are more important than they seem.

On the evening of November 12, Gabe Newell quietly unveiled a new line of gaming devices: the Steam Machine mini-PC, the Steam Frame VR headset, and the Steam Controller. At first glance, nothing out of the ordinary. However, these new products from Valve actually open a second front in the console wars, as this time the company intends to seriously compete for a place in the home entertainment ecosystem. How exactly it plans to do this and why these announcements are far more significant than they seem at first glance—we’ll explore in this article.

Steam Machine: Xbox Next Died Before It Was Born

The first and most talked-about new product is the Steam Machine. Essentially, it’s a compact, cube-shaped gaming PC, which, according to Valve, is small enough to hide behind a banana on a shelf. This is a joke, of course, but the point is that Valve is openly targeting a segment where Xbox, PlayStation, and Nintendo have been vying for power for years, and against this backdrop, the Steam Machine looks like a bold contender, attacking all of its competitors’ weak points simultaneously. But first things first.

Inside the Steam Machine is a relatively modern piece of hardware, comparable to current-generation consoles. Hidden within the 16×16-centimeter cube are a six-core AMD Zen 4 processor, 16 GB of RAM, and a discrete semi-custom RDNA 3 graphics card on a Navi 33 chip with 8 GB of memory and twenty-eight compute units.

In terms of power, it sits roughly between the Radeon RX 7400 and RX 7600. It doesn’t sound particularly hyped—I understand. However, it’s precisely this relatively modest configuration that allows Valve to keep the price low and make the device truly mainstream. After all, Gabe knows better than anyone that the majority of gamers still play at 1080p, and for that purpose, this configuration is more than sufficient.

While the marketers certainly couldn’t resist promising 4K gaming at 60 FPS with FSR, that’s more of a benchmark. I’d immediately cool my expectations to 1440p maximum. However, there are a number of nuances that explain why things are designed this way, and to understand them, it’s worth looking at the Steam Machine primarily as an idea.

The concept of a Steam Machine isn’t new to Valve—in 2015, the company tried to conquer the living room with its devices, but failed miserably: fewer than 500,000 units were sold worldwide, which is a statistical margin of error for the market. So why didn’t it take off?

The first Steam Machines had a crude software ecosystem and lacked a clear direction for development and positioning. The decade-old SteamOS could only run games with Linux versions, of which there were very few. Proton and device verification were nonexistent, so buyers of this “PC console” received a limited game library and a host of workarounds.

Relying on third-party manufacturers created additional confusion: marketing was blurred, configurations varied wildly, and prices ranged from several hundred to several thousand dollars. Now the situation has changed radically.

Over the past few years, Valve has consistently developed SteamOS and Proton, achieving something that was hard to believe in 2015: most PC games run on Linux without developer intervention. Moreover, SteamOS often demonstrates better performance on the same hardware compared to Windows 11, allowing users to squeeze the most out of relatively inexpensive components.

The success of the Steam Deck is proof that a portable gaming PC can be affordable and still comfortable to use. Over the past ten years, SteamOS has matured and is ready to take revenge, and Valve has learned from its past mistakes and is now manufacturing its own devices, eliminating the need for users to guess which Steam Machine is the right one.

It’s not the most obvious, but it’s a crucial step toward console convenience, where seeing the Valve brand immediately makes you realize what you’re buying, much like with Sony, Xbox, and Nintendo.

But why does the subtitle specifically focus on the Xbox Next? It’s simple: it’s becoming the Steam Machine’s main future competitor. Microsoft is “officially rumored” to be developing a device that will further blur the line between PC and console, turning the Xbox into a universal gaming station. It’s an ambitious plan, but there’s a catch.

It’s a year or two, if not longer, before the next Xbox launches, and users are already being prepared for it to be an expensive, “premium” device. The only question is, does the public really need an expensive, all-in-one console when current-generation sales clearly indicate otherwise?

The most sold unit wasn’t the powerful Series X, but the affordable Series S. Most players simply want the ability to play modern games affordably, and with Game Pass, that worked. But with subscriptions and consoles constantly rising in price, the main selling point of Xbox as a “value” platform is disappearing.

Against this backdrop, Valve is already offering a device that fills the very need that made the Series S the driving force of the generation. Steam Machine provides access to the vast Steam library with regional pricing, no online fees, runs games in a familiar console format, and remains a fully functional PC.

If you want to go beyond console use, you can switch to the classic SteamOS desktop mode (which runs full-fledged Linux) or install Windows for maximum compatibility. Users are free to choose their software; you can install the Epic Games Store or emulators for older consoles. Steam Machine remains, at its core, a gaming PC masquerading as a console. And that’s precisely why it poses a threat to the next Xbox. While Microsoft is only talking about the future, Valve is already living it.

Sony and Nintendo are relatively safe for now. Regardless of your feelings about platform exclusives and their modest numbers in recent years, they remain the reason why avid gamers need to keep multiple devices at home.

But the Xbox Next has nothing to offer the Steam Machine: there are no exclusives, Game Pass can still be installed on the “Gaben machine” if desired, and the promised premium nature of the future Xbox is questionable. Enthusiasts who can afford a truly “premium” device are more likely to opt for a full-fledged gaming PC or, for example, a PlayStation 5/6 Pro.

Ultimately, the most important thing remains the Steam Machine’s price. It will determine whether everything discussed above makes sense. If, for some reason, the device launches at an exorbitant price, it will be a self-inflicted blow. But in recent years, Valve has been far more sensible than the rest of the industry giants combined.

The Steam Deck was sold at near-cost, the company didn’t raise prices amid the overall rise in electronics prices, and Valve’s philosophy is built on making money not on hardware, but on the platform—as befits a confident platform holder.

And if the Steam Machine truly becomes affordable, even “reasonably affordable,” it will change the market far more than it initially appears. For the first time, Valve isn’t just making a device; it’s launching a full-scale offensive with its own ecosystem. A portable here, a home PC console there, and then… then things get even more interesting.

Steam Frame: A Steam Deck You Can Wear on Your Face

The second-best device (though, frankly, the first in terms of interest to me) is the Steam Frame. While it’s easy to mistake the device for just another VR headset, it would be a mistake to judge it so one-sidedly. Valve deliberately doesn’t call it the Index 2, because it’s actually a Steam Deck that you wear on your face. Why? I’ll tell you.

The Steam Frame combines several approaches that we’ve seen individually from other companies, but for the first time, they’ve been assembled under a single casing.

The device is equipped with relatively high-end hardware for a VR headset. Two 2160×2160 LCD displays per eye with modern custom pancake optics—”pancakes” that provide a wide field of view of approximately 110 degrees and a refresh rate of 72 to 144 Hz—are roughly on par with competitors like the Quest 3, but the hardware is more powerful.

Inside is a Qualcomm Snapdragon 8 Gen 3 mobile chip with 16 GB of RAM and 256 GB or 1 TB of storage, plus a microSD slot. At just 435 grams, the device is approximately 20% lighter than most competitors.

Valve’s design was clearly inspired by the premium Apple Vision Pro, but it was tailored to its own needs. The Steam Frame is modular: the main body housing the displays, processor, and optics is separate from the mount and battery. This separation allows for better weight distribution and reduces pressure on the face during extended gaming sessions, while also simplifying maintenance and future upgrades—a feature designed into the design from the start.

Valve has made no secret of its desire to develop upgrades: from interchangeable straps and headbands to possible modules with additional cameras, which could eventually take the device into the mixed reality segment. While this isn’t part of the official announcement yet, the information comes from journalists who visited Valve headquarters and spoke with engineers.

The overall idea is to turn the Steam Frame into “the last VR headset you’ll ever need.” A device that doesn’t become obsolete every two or three years, but rather can be updated thanks to its modular design. Potentially, the company could release a new front-end computing unit entirely if it decides to go that route: not a separate new device, but a replaceable module that provides a performance boost without the need to buy a new headset. This would, albeit slightly, reduce the cost of upgrading for the end user. For now, this is just a bold claim; how it plays out in practice remains to be seen.

However, Valve is already offering something truly exciting. It’s not just about modularity, but the fact that the Steam Frame was designed from the ground up as a device with two equally powerful operating modes, and this is its main difference from all current VR headsets.

On the one hand, it’s a fully-fledged standalone VR headset that runs games and apps on its own chipset running SteamOS for ARM. It has its own compatibility profile—Frame Verified—its own settings, its own limitations. It can operate as a standalone device, wirelessly and without a PC, and not just in VR games.

Valve officially emphasizes that the Steam Frame is a PC, and this is evident in its standalone design. The device can run regular “flat” games from your Steam library in virtual display mode, transforming the space before your eyes into a giant digital monitor.

The user doesn’t need to worry about the game’s architecture—x86, ARM, Linux, or Windows—because SteamOS automatically decides which compatibility layer to run it through. The combination of emulation, internal libraries, and Proton technology makes the process as convenient as possible: you choose which game to run—VR or non-VR—and the system decides what to do with it.

Ultimately, the Steam Frame can install and run any game from Steam (which will soon support Android games), but the question is whether it can handle it. Most likely, the library will have to be filtered to the capabilities of ARM graphics, which is similar in quality to, say, the Quest 3.

As I mentioned above, Valve introduced the concept of Frame Verified—games that its headset can handle on its own, similar to Deck Verified. For example, journalists played Hades 2 on the Steam Frame at 1440p/90Hz, but how many games will realistically deliver acceptable performance on its own? It’s an open question, but it’s clear that the Steam Frame’s greatest potential is unlocked when connected to a powerful PC, and here Valve has come up with a number of features that make wireless streaming a primary use case.

The headset comes with a special wireless adapter that plugs into your PC and serves as a direct transmitter to the headset. A private wireless channel is established between the dongle and the Steam Frame, bypassing the router and other intermediaries—essentially a private “tunnel” free of external traffic.

This eliminates the latency issues that inevitably arise when streaming over regular Wi-Fi, where the signal goes through a router. All other traffic is transmitted via standard Wi-Fi, and this “dual-channel mode” is a true revolution in VR streaming.

Additionally, to reduce the load on the device, Valve has implemented support for foveated streaming technology. The headset is equipped with internal eye-tracking cameras, and the system transmits the highest-quality image only to the area you’re currently looking at, reducing the resolution at the edges of your field of view. This is similar to foveated rendering, but at the video streaming level—universal for all games, without the need for developer intervention.

Incidentally, the Steam Frame also supports foveated rendering, similar to PSVR2. Thanks to internal eye-tracking cameras, the headset can increase resolution and detail in the field of view and decrease it in the periphery, reducing the load on the processor and GPU. Moreover, according to journalists, it operates so quickly that it literally anticipates the player’s movements, making the experience as smooth as possible.

The combination of these two technologies could be a useful addition when running games on the Steam Frame’s Snapdragon processor, which is a powerful mobile chip but noticeably weaker than a gaming PC with a high-end graphics card.

Steam Frame controllers also build on the idea of ​​versatility and the ability to play any game, so they’re a hybrid of a regular gamepad and traditional VR “hands.”

Each Steam Frame Controller is literally half of a full-fledged gamepad: with thumbsticks, a D-pad, ABXY buttons, triggers, and bumpers positioned exactly where the player expects them. They’re also fully functional VR controllers, tracked through headset cameras and equipped with capacitive sensors that detect finger positioning. In practice, this means one set of controllers works for your entire Steam library, whether you’re playing Half-Life: Alyx or Hades 2 in VR Cinema mode.

However, as with the Steam Machine, the main question remains: how much will the Steam Frame cost? The VR market is more fragmented than ever, and Valve is betting exclusively on gaming.

Moreover, the gaming experience is as unified and open as possible, with access to your entire Steam library and even to some content that was previously closed on other platforms (ARM will simplify porting games from Quest and other standalone systems).

The Steam Frame, in terms of its features and capabilities, feels like the perfect “golden mean”: it occupies the spot where the Vision Pro is excessive and unnecessarily expensive for gamers, and the Quest is not powerful enough and flexible enough.

The Steam Frame seems like the perfect “facehugger” that could, in theory, replace a Steam Deck on the go. Why not? You could easily put on the helmet on a plane and spend your flight rolling dice in Baldur’s Gate 3 on a virtual screen.

The only serious limitation is battery life. It’s still modest: the built-in 21 Wh battery lasts about an hour of active gaming, as the Snapdragon consumes up to 20 W under load. But this issue can be addressed if desired.

The design already includes an external battery for the holder, and nothing prevents Valve or third-party manufacturers from offering higher-capacity options. At the very least, the idea of ​​this gaming format has been around for a while, and Valve now appears to be the best candidate to fully implement it.

Steam Controller: One gamepad to rule them all

To conclude this article, it’s worth mentioning the updated Steam Controller. This time, Valve didn’t reinvent the wheel, but built on what’s already proven itself in the Steam Deck. The new Steam Controller is a classic pro-level gamepad in form and logic, with additional rear buttons familiar to any gamer, but with a signature Valve twist: dual trackpads that simulate mouse-like precision where traditional thumbsticks fall short. The only difference from the Steam Deck is that the trackpads are slightly angled inward for improved ergonomics.

While this design may surprise those who’ve never held a Steam Deck, it’s much more comfortable in practice than it seems. And I’m genuinely glad I’ll be able to use this gamepad in everyday gaming, because as a console gamer through and through, I don’t view a mouse and keyboard as gaming devices—I simply hate it when a game forces me to abandon a gamepad for the sake of convenience, like in card games or strategy games.

And to top it all off, the new Steam Controller seamlessly switches between all Valve devices, including the Steam Frame. Combined with the ability to store games on a single microSD card and easily move it between Steam Deck, Steam Machine, and Steam Frame, you can switch between devices in minutes, without redownloading or lengthy setup.

All of this together no longer resembles a collection of disparate gadgets, but a fully-fledged, well-designed ecosystem in which devices function as a single entity. And for the first time in many years, we can seriously consider Valve a full-fledged platform holder, no longer limited to the role of “Uncle Gaben’s shop,” but building its own infrastructure for all gaming formats.

Diagnosis

Valve announced three devices in one fell swoop—an unprecedented event. Previously, Gabe Newell’s company had been releasing hardware hesitantly and in small batches, but it seems the Steam Deck marked a turning point for the company, when it became clear it was time for a paradigm shift.

Today, in November 2025, we speak of Valve in a completely different light. The company no longer appears to be a cautious experimenter, trying something on the fringes of the market and then quietly winding down the initiative. The company declares its ambition to become a mature platform provider with its own ecosystem, philosophy, and standards, building the SteamOS infrastructure with the same confidence that Sony and Nintendo once built their console businesses.

The Steam Machine is set to bring freedom and openness to the closed world of home gaming systems, the Steam Frame reimagines VR as a natural extension of PC gaming rather than a niche hobby, and the Steam Controller complements this vision.

One key question remains: price. It will determine whether the Steam Machine becomes the “people’s PC console,” and whether the Steam Frame can expand beyond the enthusiast crowd. I’d like to believe that’s what will happen.

In recent years, Valve has never looked so focused, ambitious, and ready to take a major step forward. Now, for the first time, it has it all: a platform, an ecosystem, devices, a software base, and an audience that doesn’t need an explanation of SteamOS.

And since Gabe Newell seems to have finally learned to count to three, I don’t want to ignore another question that’s been floating around and attracting even more attention than the announcement of new devices.

So what’s Valve preparing for November 19th? A suspicious window from November 18th to December 9th has been floating around on the Steam schedule, and Valve claims there’s a “compelling reason” for it. A Half-Life VR exclusive can be ruled out—the employees themselves have confirmed there’s no dedicated VR content. If a new Half-Life exists, it will be released everywhere Steam is available: PC, Steam Deck, Steam Machine, and even Steam Frame.

So, if Gabe Newell has finally decided to hit the 3 button, there’s no better time than now.