Summary
Steam Machine launched at $1,049+, far above Valve’s $750 target due to RAM price spikes.
Valve says memory suppliers set monthly prices and can cut Valve off if it refuses.
That forced Valve to accept high RAM costs or risk losing access to future memory supplies.
So, the Steam Machine made its grand debut in the gaming market, and it ended up costing at least $1,049. It’s a far cry from the $750 price tag Valve initially wanted to sell the Steam Machine for, but given how the RAM market is, the company felt it had to bump the price up to cover for the volatile market.
But what does the RAM market look like for manufacturers, specifically? Do they have bargaining power, or are they at the whim or the market pricing? Well, as it turns out, Valve claims that its hands were very much tied when it came to purchasing RAM, and if it declined the new prices at any time, it would essentially lose access to RAM from that seller from then on.
“If we say no, then they never talk to us again,” says Valve
Sounds like a brutal market
As spotted by IGN, Valve recently had an interview with Gamer’s Nexus about the Steam Machine. One of the questions covered what comes to everybody’s mind when they think of the Steam Machine: the huge price increase triggered by an unstable RAM market. Fortunately, Pierre-Loup Griffais of Valve stood up to the plate and gave us a peek behind the curtain as to how it struggled to purchase memory:
Gamer’s Nexus: “Were you able to lock in, kinda, contracts from memory with the suppliers directly? Or did you have to jump through a bunch of hoops, or…?”
Griffais: “Look, there’s no, there’s no contract, there’s nothing. Like…those guys, they, they are…you know, they give us a price, every…month, or something. And they say, ‘You can buy that many,’ and it’s yes or no. And if we say no, then they never talk to us again, right?”
It really sounds like Valve’s only options were to stomach the increased prices or run the risk of essentially never getting the hardware to make another Steam Machine or Steam Deck ever again. Sounds like a really rough scene to make computing devices in right now.
Related
Can’t afford a Steam Machine? Just build your own, says Valve
“We have the Steam Machine at home.”