Apple Is The Biggest Threat To Steam Box, Not Console Makers: Valve’s Gabe Newell

Newell cited Apple's "huge" market share and "relatively obvious pathway toward entering the living room with their platform"

 @YannickLeJacq
on January 31 2013 12:08 PM

Valve Corporation, the video game developer and software company that brought you the Steam platform and the popular gaming franchise “Half-Life,” made its first step into hardware earlier this month at the Consumer Electronics Show, or CES, in Las Vegas when it officially unveiled its much-rumored Steam Box device.

Coming shortly after the company unveiled its new Big Picture Mode feature for Steam, many video game critics assumed that the legendary PC gaming company was finally taking a stab at the console market. But it turns out that Valve Co-founder Gabe Newell isn’t all too worried about the major console developers. Really, what Newell sees as the greatest threat to the Steam Box is Apple (NASDAQ:AAPL).

According to a report from gaming site Polygon, Newell spoke to a class at the University of Texas’ LBJ School of Public Affairs this week and admitted that he sees Apple TV, Apple's living room offering for media streaming, as the biggest source of competition for his company's latest venture, the Steam Box.

"The threat right now is that Apple has gained a huge amount of market share and has a relatively obvious pathway toward entering the living room with their platform," Newell said during the lecture.

"I think that there's a scenario where we see sort of a dumbed-down living room platform emerging -- I think Apple rolls the console guys really easily,” Newell added. “The question is can we make enough progress in the PC space to establish ourselves there and also figure out better ways of addressing mobile before Apple takes over the living room?"

Newell did not shy away from the fact that he sees the living room will be a fierce battleground for tech companies jockeying for market share in the coming months and years.  

"There are going to be a huge set of products that say, 'If you want something that's incredibly cheap, at a price point well below anything that consoles will be able to reach, you're going to take advantage of the PC that's running somewhere in your house,'" Newell said.

The current console generation, as a Sterne Agee analyst said recently when discussing Electronic Arts (Nasdaq: EA), is “at the tail end of its life cycle.” While major console developers like Microsoft (Nasdaq: MSFT), Sony (NYSE:SNE) and Nintendo (PINK:NTDOY) all scramble to retain their position on top of the gaming hardware food chain, the newfound vulnerability of the market has made room for a host of prospective competitors to swoop in with their own offerings. Everything from small enterprising startups and Kickstarter success stories like OUYA and GameStick to entrenched game industry veterans like Nvdia (Nasdaq: NVDA) have revealed their own market plays in recent months. And that’s not even mentioning all the different smart TVs and other cloud gaming options that other companies are toying with.

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