news\ Jan 10, 2013 at 2:45 pm

Microsoft's Phil Harrison warns Steam Box creator Valve about console business


Apparently, the console business is not an easy one. Of course, that may be a bit deceiving judging by the recent influx of console announcements we've received the past few months. Dating back a few months we've heard of the Ouya, the GameStick, and perhaps the most intriguing of them all, Valve's mysterious Steam Box.

Valve has been long-rumored to be working on some sort of home console based on the company's PC game service, but we haven't yet seen anything official. At CES, we got a look at something many thought was the Steam Box (or at least very close to it) in XI3's Piston, but Valve's Gabe Newell reaffirmed the company is still working on its own console -- putting to rest those speculations.

We don't know when or what Valve's plans are for the Steam Box, but Microsoft Studios executive Phil Harrison has issued a word of warning to Valve and other companies looking to delve into the console market: "Entering the hardware business a really tough business."

Speaking to Eurogamer, the ex-Sony PlayStation development boss and console business veteran explained, "You have to have great fortitude to be in the hardware business and you have to have deep pockets and a very strong balance sheet. It's not possible for every new hardware entrant to get to scale."

"They can be successful at small scale. But it's very rare for a new hardware entrant to get to scale, and I mean tens or hundreds of millions of units. There are a very small number of companies that can make that happen." Sony, Nintendo, and Microsoft, of course, are the three successful ones that come to mind.

"And it's not just having a great brand or a great software experience. It's about having a supply chain and a distribution model and a manufacturing capacity and all the things that go with it. It's a non-trivial problem to solve and it takes thousands of people to make reality," he said.  

Harrison went on to say that while he "admires" Valve as a company and what they've achieved with Steam, he wouldn't consider it to be the "benchmark of success."

"We would always seek to innovate and push beyond," he said of Microsoft's ability to grow its own cloud gaming service. "Xbox Live as a foundation, the reach we have and the experience we deliver is a great place to build on."

As it stands right now, Xbox LIVE currently has 40 million users from over 70 million Xbox 360 units sold; Steam boasts an even more impressive 50 million active users. Who knows, maybe Valve can pull off its own console -- I'm sure there are plenty of gamers that want to see them succeed. Even Harrison welcomes the Steam Box.

"Any new entrant, without being specific to any company or brand or product, to the games industry is ultimately a good thing, because it helps validate, grow and enhance consumer excitement and consumer interest in our category," Harrison concluded. "So, ultimately, it's a win for everybody."

Keep in mind, Harrison's comments come at a time when speculation of a new Xbox console from Microsoft is at an all time high. Many expect a new Xbox system will be revealed sometime this year.

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