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| NotAPC: The Steam Deck is a dedicated gaming device limited to Valve content distribution. (Source: Valve) |
Before we get into Valve’s new handheld Steam Deck we need to address their claim that it is a “PC”. The definition of a PC is not universal. But at JPR we look at a few elements to define a device as a PC especially as it relates to gaming. The PC gaming market has thrived due to people who like freedom, customization, and control. When PC gamers on Windows or MacOS or even Linux want to buy a game they can choose from a significant array of distribution sources. Steam, UPlay, Origin, Microsoft, Apple, and many other distributors globally. They can also use the PC for all the myriad uses that software had been developed to support: from Adobe to Autodesk to Intuit to Microsoft Office.
The Steam Deck is not a “Handheld Gaming PC”.
Currently, the Steam Deck is a “closed garden” meaning that customers may only buy their software from Valve. Because of this, we define the Steam Deck as a handheld gaming console.
With that out of the way we can focus on what this device brings to the market which at least appears to be a potential challenge to Nintendo. It is a competitor to the Switch and based on our conversations, informal polling, and observations, at least 20 million Switch owners are PC gamers. And we believe this is a conservative estimate.
The Steam Deck is a “Handheld Gaming Console”.
The reason Switch is so popular is of course due to the quality of games that Nintendo publishes. The significant challenge for Valve is to convince PC gamers to play “PC games” on a handheld device. We are not so sure that there is a significant market for this.
Or, is there more up the sleeve of Valve on this front? Based on our analysis, over 60% of Nintendo Switches are sitting in their docking stations, connected to TVs, and rarely, if ever, removed to be used as a handheld. (One exception to this is in Japan where students can be seen using it in handheld mode on the train to and from school) Switch owners know that the superior experience is to play their games on a big screen and convert the controller to a lightweight traditional layout.
Does Valve intend to support TV Gaming with the Steam Deck?
Yes because the deck is capable of up to 8K video output but there is a serious difference compared to Nintendo Switch. The Steam Deck does not have a removable control interface that transforms into a traditional controller. Could Valve release a separate controller for the Steam Deck to enable this? Absolutely. Will they? Possibly. Valve already offers a Steam controller ($235). Could you buy a third-party controller? Probably. Will it make a difference in sales to PC gamers? We don’t think so. This goes back to why PC gamers embrace their platform. Freedom, customization, and control.
What is Steam Deck’s Destiny?
I’d love to share our forecast in this article but that’s reserved for subscribers to the JPR TV, Cloud and Handheld Gaming Market Study product which is available here. We will say this though. It has a chance. We cannot forget the failure of the Steam Box, but we can imagine that the creative and dedicated employees at Valve can pull many rabbits out of their hats. Perhaps Steam Decks best addressable market is not PC Gamers…..