Touring the Bellevue, Wash. headquarters of video game company Valve can feel like stepping into the lair of a mad scientist. That's especially true in the Steam Machine project areas, where there is a graveyard of cast-off designs strewn between 3-D printers and designer stations. But the results of this chaos are Valve's first two major steps into the hardware business: The prototype Steam Machine and its controller.

The most noticeable things about these devices is the ability to pack a high power punch in modest form factor and the crowd-sourced programmable configurations. But the most important thing about the console is its underlying philosophy.

Conventional consoles from Microsoft, Sony and Nintendo lock users into closed platforms and demand that users pay high prices for games produced by big-name developers. Valve has built its gaming empire around the opposite philosophy: under-promise and over-deliver. Because it delivers its games electronically, it can constantly add new value to its games. And its open platform makes it more accessible to independent developers who chafe at the strict rules of conventional gaming platforms.

That sounds great in theory, but what does it feel like to actually play games on the radically open platform Valve announced in September? Late last month, I traveled to the company's Bellevue headquarters to find out. Read on for my impressions.

A new kind of controller

The steam controller went through many iterations before arriving at the finished product I viewed last month. The first prototype I was shown was a Frankenstein's monster of a creation. The development team took the housing of an Xbox controller and bolted new pieces onto it, some of them attached only by magnets. The team went through "hundreds" of designs before settling on the current version.

The final version had two touchpads where other controllers have analog joysticks. It features haptic feedback capabilities and a programmable screen sandwiched between the touchpads.

Using a mix of software and firmware, the controller presents itself to games as a traditional mouse and keyboard. "We have built this to accommodate every different kind of input requirement for all of the 3000 games on steam," says Greg Coomer, who works on the Steam Machine project and has been with Valve since leaving Microsoft with Valve co-founder and cult gaming icon Gabe Newell.

That's important because of the sheer diversity of games in Steam's existing gaming library. Because Steam games were designed for the PC, they aren't optimized to work on a console controller. But Valve plans to address this in a clever way: Steam users will crowdsource controller configurations, with the most popular rising to the top. That will allow people who play the game the most to suggest the best layout to newcomers.

That might sound a little bit crazy to you, and it did to me too. But it works surprisingly well. I managed to successfully navigate Civilization V, side-scrolling platformer Trine 2, and first-person shooter Metro: Last Light in a remarkably natural way. In fact, I had a more positive experience playing the shooter with this controller than, I think, I ever have playing similar games using an Xbox 360 controller because the edges of the touchscreens were programmed to scroll in a much cleaner way than an analog joystick can allow.

The controller is by no means perfect, and my time with the controller didn't give me a chance to truly get comfortable. But Super Meat Boy developer Tommy Refenes, who worked with Valve to test out the design, hit the nail on the head when he summarized it as "great start, needs some improvements, but I could play any game I wanted with it just fine."

A console you're not allowed to buy

The Steam Machine hardware relies on the same crowdsourced philosophy as its controller and software. Rather than releasing a finished box and demanding that partners conform, Valve has produced an early prototype and is now soliciting feedback from its hardware, developer and user communities.

The Steam Machine itself is a dainty, streamlined box designed to pack the punch of a PC gaming rig in a size that would look natural in your entertainment center. "We've basically taken what gamers on Steam typically love and put it in a form factor that is more appropriate for the living room," says Coomer. Key to that size was separating out the hottest components into heat shrouded compartments: The graphics card, motherboard, and power supply are in their own enclosures with separate fans -- although you wouldn't really notice it by the sound of the machine, which was quieter than the air conditioning in the room where I tested it.

The product is more of a retooled PC than a dedicated gaming device -- all of its parts can be swapped out like a modern gaming rig. And if you priced it out, it would likely cost as much to build it — several hundred dollars more than modern gaming consoles. "We've basically taken what gamers on Steam typically love and put it in a form factor that is more appropriate for the living room," says Coomer.

But you probably won't ever be able to buy it. Instead, Valve sees it as a testing rig to inform any manufacturing it might take on in the future. "There's lots of telemetry built in to a really granular level," in the prototypes Valve is delivering to select gamers who are competing for a beta-testing role and developers, Coomer said. That technology will send home information about how the machines are being used – like which buttons are being pushed, which games are being loaded, or if users swap out hardware.

Here, Valve is really looking to get input from the Steam community about what they want in Steam Machine hardware. "I think it's at odds with how hardware or consumer electronics gets done usually," notes Coomer. But Valve feels that bringing in the beta-testing model so common in software will help them design better hardware: "We don't want to start operating in a way that builds products without customer input or without watching how customers actually interact with our products, " Coomer said.

"We think that in a year from now, or two years from now we will have products and services like these that are far more valuable than we could have made them if we hadn't build this beta or conducted these tests."

For actual retail models, Valve is partnering with a number of PC manufacturers who will reveal their devices at the Consumer Electronics Show in January, and which should hit shelves in summer 2014, just as Valve expects to be shipping controllers.

Linux as a means for providing meaningful user-developer relationships 

The same open, user-driven philosophy has driven the development of the Steam OS, the software that will power Steam Machines. In many ways, the Linux based SteamOS is a natural progression of the open architecture Valve has been promoting for years on its Steam platform. Certainly, Newell has never been shy about his appreciation for Linux -- calling it the future of PC gaming at LinuxCon shortly before the Steam Machines announcements.

But still, Coomer says the jump to creating their own Linux-based operations system wasn't taken lightly. "We thought for a long time about whether our business was going to be able to continue as it had on the platforms that were available to us, and we started just worrying too often about if that was going to be possible," Coomer said. While Valve develops its own games for consoles and PCs, they were finding that it was hard to deliver the sort of experience they wanted for their players on closed systems. On Steam, they've actively promoted users making connections with each other and with the developers of their favorite games. And SteamOS will be launching some new features across Steam all-platforms, including Family Sharing and In-Home streaming.

"Steam has been advancing pretty quickly on those kinds of connections and when we try to make those connections happen on other platforms we often encounter too much friction, and it's made us worry more and more that if that trend continues we wouldn't be able to continue to build our business on the platforms that we had," Coomer said.

In entering the console business, Valve is crossing swords with better financed and more established competitors like Microsoft and Sony. Just last week, the company announced Steam had reached 65 million active players -- a 30 percent increase over the previous year. That's also more than Microsoft's 48 million accounts and creeping up on Sony's Playstation Network which claims 110 million users.

And feeling confident about the loyalty of that user base and concerned about the friction on other platforms, Coomer said, Valve decided "to start building almost from scratch on a new place for Steam to run."

"We began working in a much different way"

One reason Valve is confident in its strategy is that they've pulled off a similar trick before. The initial launch of Steam itself stemmed from a similar tension between the old launch model of release and move vs. the software as a service system that has developed as always-online has become the standard for most gamers.

"Around the time that Steam began to exist," Coomer explained, "we began working in a much different way with a different relationship with our customers. We used to put all of the bits that we had for a game onto a piece of optical media, put them in a box, and shipped them and that was sort of the fire and forget."

But now, he said, most Valve games are much different. For instance, Team Fortress 2 which originally launched in 2007 is sometimes updated four times a day in Steam. Instead of putting a lot of effort into launches and praying for a big spike with a long tail, the curve is inverted with the launch as a relatively minor event. The idea is that the service and add-ons provide extra value over time because there's an ongoing investment from each customer. But while they have the freedom to provide that experience for PC gamers, their console gamers often don't get the same treatment due to Valve's limited control over other platforms.

"In the space of a year and a half," Coomer said, "I think there were 339 updates that we did to Team Fortress [2], and in that same span of time we updated the non-PC customers like the Xbox 360 customers exactly twice."

And it wasn't because they didn't want to give them all the same updates or value that PC customers were getting. Instead, Coomer said, a variety of factors including the certification process and commerce rules enforced by Microsoft dictated the relationship they could have with their players. They didn't make it easy for Valve to provide users with updates, add-ons, and mods. "We wanted all of this stuff to be free. And that wasn't really kosher when we wanted to do it on that platform," Coomer said.

A big gamble

A significant proportion of Steam's 65 million active users will likely be quite eager to get their hands on the hardware and software I tested out. But as impressive as everything I saw at Valve was, there's still a question of how the products will perform among general consumers. It's not clear whether gamers in general will want to buy yet another set-top box for their living rooms, especially since they can already play their favorite Steam games on their PCs.

One big hurdle may be cost. Valve wasn't prepared to share specific price points for third-party Steam Machines, but they did say they expected them to range from close to current console prices up to the cost of pricey gaming rigs. In other words, users will have to be pretty devoted to the Steam platform to shell out hundreds of dollars for a Steam Machine -- although many may choose to boot up SteamOS on their current rigs.

But another barrier is that games developed on the Windows version of Steam may not necessarily work on SteamOS. Despite Valve's best efforts, only a fraction of Steam's 3000 plus games are currently Linux compatible. If users cannot play their favorite games on dedicated Steam Machines, it might be hard to justify the expense of yet another console type device.

Shortly after the initial Steam Machine announcement, Sony chief executive Kazuo Hirai told Bloomberg news he thought it would be harder than they expected to break into living rooms: “It’s really difficult to try and build a platform business,” Hirai said, adding “I’ve managed it personally, so I know it’s a gradual process, not an overnight thing.”

But Valve is not starting up a platform from scratch -- they're going into it with an aggressively loyal fanbase who are constantly theorizing about a possible HalfLife 3 and making digital birthday cards for Newell.

And they're going into it with a larger plan that envisions an all encompassing entertainment space that brings creators and consumers closer together. Right now, Coomer said, customers are limited by the "very nuts and bolts physical divisions" keeping entertainment into separate spaces -- be they living room, mobile, or what have you. But by breaking into the living room, Steam hopes to break down those barriers and redefine how users are able to interact with the community, both in terms of other players and with creators. And they have a pretty good track record of doing that, both in their own choices as a developer, and in the creation of the Steam Workshop where they claim there are people making six-figure incomes by selling their own add-ons and mods.

"Once those barriers get erased and all of those devices are compatible with each other and allow for that kind of participation," Coomer said, "that's when Steam actually succeeds even more because all of that entertainment and value is allowed to cross the borders."

It's a grandiose, ambitious vision that would be hard for any company to achieve. But if anyone is going to do it, it just might be Valve.

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