My Thoughts on SteamOS

SteamOS is here. Let’s expand on some of the features Valve announced. What are they actually saying?

In-home Streaming

You can play all your Windows and Mac games on your SteamOS machine, too. Just turn on your existing computer and run Steam as you always have – then your SteamOS machine can stream those games over your home network straight to your TV!

Let’s be honest here, both the biggest feature and the biggest problem SteamOS has is that it’s based on Linux. More on Linux later this post. This brings a lot of good things to the gaming spectrum, however it also means a rather limited catalog at this point. Valve has definitely been planning this ever since they started working on Steam for Linux and Big Picture.

Streaming games over LAN works pretty damn well for the Nvidia SHIELD, but Valve will definitely be pushing developers to develop their games for Linux (if they aren’t already). Developers would be pretty stupid if they don’t support Linux now.

Music, TV, Movies

We’re working with many of the media services you know and love. Soon we will begin bringing them online, allowing you to access your favorite music and video with Steam and SteamOS.

What does this really mean? Here are two things that have already been spotted in the current Steam Beta client, but are currently disabled.

  • Playing local music, making playlists, all from Steam. Import your iTunes music, or play music from a network share.
  • Built-in Spotify support. Already mostly implemented in Steam beta, but disabled.

We haven’t seen the next bit in the Steam client yet, but we can pretty much assume this is a given. Netflix. What’s the best way to get TV and Movies on a PC? Netflix? Maybe Hulu.

Linux

SteamOS will primarily be based off Ubuntu, as it has been Valve’s focus ever since they started testing Steam for Linux. They already have a repository for Ubuntu 12.04 LTS users designated “hometest”, which is obviously short for SteamOS being tested in people’s homes. This hometest repository has been around since April. Check out our previous blog post for more on that repository.

I’m secretly hoping Valve will ship with a lighter version of Ubuntu (or not Ubuntu at all), but seeing all their testing has been done on Ubuntu so far, and they only have a repository for Ubuntu at the moment it’s looking like Ubuntu will be the thing they ship SteamOS with. Please prove me wrong, Valve.

A problem with Linux is that not a lot of games are supported right now. Valve obviously “fixed” this by introducing in-home streaming, but this is only a temporary solution for developers that want their games played on SteamOS/the SteamBox. Valve WILL be pushing developers to develop for Linux, and will help them out in doing this. How, you ask?

Last week, Gabe mentioned in his LinuxCon keynote that Valve is working with another company on developing a Linux debugger. In previous talks, Valve has shown that debugging and improving graphics performance is much much easier on Linux, since you have deeper access into the operating system and the hardware. With Valve’s ‘debugger’ coming up, developers will have a much easier time developing for Linux than they are having now on Windows.

In-home streaming is basically Valve’s answer to people wanting to play games that are not on Linux yet. It won’t be optimal, there will be latency and quality issues (it is Steam after all) but in the end it’ll push more and more developers to develop natively for Linux as their games aren’t being played the way they want them to be played if they’re being streamed.

PC enthusiasts are taking over

Dig far enough under all the news about the tussles over mandatory Kinects and indie support for either the Xbox One and the PS4, and you’ll find a shocking bit of info: PC gaming is at its best since the 1990s. Were it John Lennon, PC gaming would be making haughty claims about how it’s “bigger than Mario” and scoffing at the petty squabbles of its box-bound competitors. And with good reason. Provided you’re not wild about jumping into exclusives like Forza 5 or Infamous: Second Son, it’s looking more and more like you won’t be left too far behind if you decide to skip the upcoming console generation altogether. PC gaming is on the rise, and while it’d be easy to claim that these successes lie in the superior processing and graphical potential of the PC caused by such a lengthy console cycle, the truth is that keys of the platform’s resurgence may ultimately lie in much more mundane roots.

It wasn’t long ago, of course, that PCs were hounded by the usual premature proclamations of demise heaped on the platform since its first heyday ended sometime around 2001. As early as 2005, Cnet was arguing that the Xbox 360 and the PS3 would mark the end of the PC as a gaming platform; more recently, we’ve heard similar claims centered around the sudden rise of social games (which often count as PC games in their own weird way) or the advent of smartphones and tablets. It wasn’t as though such proclamations packed much weight; even during its darkest hours, the PC witnessed the staggering rise of World of Warcraft’s millions, while millions of other players also flocked to games like League of Legends, EVE Online, and Mojang’s indie wunderkind Minecraft.

 

It’s not hard to see why folks less invested in gaming news would think otherwise, as endless piles of doom and gloom piled (and continue to pile) in with reports on the PC itself. As recently as last Thursday, research from IDC Insights added another dose through its revelation that PC shipments were expected to drop by 9.7 percent worldwide this year, marking another grim milestone in a steady slide that the firm expects to last through at least 2015. And yet, while sales of actual PCs might be lagging, revenues from games sold for the platform have shot up at almost an equal rate.

Way back in April, the PC Gaming Alliance revealed that the PC gaming market had brought in a total of 20 billion dollars in 2012, marking a full eight percent gain over the figures from the last year. Some of that number has to do with the release of hits like Diablo III, which sold more than 3.5 million copies within 24 hours of its PC release, but that’s but a piece of a larger puzzle that saw widespread interest across games from countless genres and from multiple publishers.

The console as we know it… has become somewhat redundant.

The long life of the current console generation is more responsible for this shift than it tends to get credit for. When the Xbox 360 and PS3 first made their appearances back in 2005 and 2006 respectively, it was perfectly possible to claim that it was simpler and cheaper to pick up one of the ready-made gaming boxes than it was to fork out cash and time to build a competent PC. Thanks to advances in PC development over the recent years, that’s no longer the case. While flashy upcoming PC games like ARMA 3 still need beastly (and costly) video cards to run well, an owner of one of today’s standard laptops or desktop units with at least an Intel Core 2 Duo chip and 512 MB of memory can run the majority of games just fine with adjusted settings.

Additional barriers to operating a gaming PC have slipped away over time. Thanks to advances in download speeds and the general maturity of the Internet itself, it’s no longer necessary to hunt down a “professional” to fix many of the little annoying problems platform’s subject to. Equipped with a decent grasp of Google, it’s possible for even the most technologically challenged gaming enthusiast to maintain the rig on his or her own. Couple that with the fact that the PC (and related devices like smartphones and tablets) has taken over the role television once played in our lives, and it seems only natural that so many would gravitate toward interacting with work and play through the same device. The console as we know it, in other words, has become somewhat redundant.

 

All that may account for the reasons why players who aren’t concerned about owning the best graphics card or processors might nevertheless gravitate toward PC gaming, but it does little to explain the explosive numbers mention above. For that, we have to turn to digital distribution services of the likes of GOG, Origin, and most importantly, Steam. Set aside the blessed convenience of being able to access almost any game you want at any time, digital distribution services also tend to trump out their retail and console cousins by price alone. It’s usually even enough to justify the purchase of new hardware since the savings you receive from the sales still result in smaller expenditures than you’d witness with boxed console games.

At times, the deals are staggering. During July’s Steam summer sale, quality games like Portal 2 and Rayman Origins were available for under seven bucks. Last month’s Humble Bundle offered by EA via its Origin service, for instance, allowed downloads of the hits Dead Space, Dead Space 3, Crysis 2 Maximum Edition, Burnout Paradise: The Ultimate Box, Medal of Honor and Mirror’s Edge in one package for as little as five bucks, with the whole project bringing in more than $10.5 million for charity from 2.1 million bundles.

Stripped of the need to worry about production costs and excessive middleman fees, digital distribution allows both consumers and developers to benefit, particularly since sales often result in more copies sold and thus more revenue. As Runic Games CEO Max Schaefer once said in an interview with  Gamasutra,”We find that we get several thousand percent increases in units and revenue on the days of the Steam sales [for Torchlight], and unit sales are usually about double the normal for a few weeks after the sales are over.”

A curious side benefit of PC gaming’s reliance on digital distribution is that it allows us to have a hand in the creation in the type of games we want to play. Some of the most standout games from the last year, such as Faster Than Light (FTL), saw their start as Kickstarter-funded projects. With crowdfunding, developers are free to make the kinds of games they want without fears of a publisher rejecting the pitch or that the concept’s too specialized to warrant widespread attention.

 

There are other factors at play here, sure, such as the emergence of multiple quality MMORPGs and fun free-to-play games like Planetside 2, but I believe these are the broad strokes responsible for the resurgence. The question remains as to whether the upcoming releases of the Xbox One and PS4 consoles could reverse this trend. For my part, I believe the PC will be fine. In fact, it may be more than fine. One of the big shifts in the new console generation is the reliance on AMD’s x86 architecture, making it easier than ever for developers to port their games to the PC.

In the words of AMD senior product marketing manager Marc Diana in an interview withThe Verge in June, “We’re struggling to find a name for what used to be called porting, because there’s not really a problem with that anymore.” (In fact, several developers showed demos of their Xbox One and PS4 games on the PC at E3 rather than on the devices themselves.) It’s so easy, in fact, that some of the next generation titles may actually come to the PC first as a result, and so this happy arrangement begs the question: why get a console at all?

Mircrosoft has decided to kill themselves, Get ready for the move to Linux

As I’ve been saying since the Windows 8 launch (hell, when it was announced) Windows is dead. Let’s all salute it—pour out a glass for it, burn a CD for it, reboot your PC one last time. Windows had a good run. For a time, it powered the world. But that era is over. It was killed by the unlikeliest of collaborations—Microsoft’s ancient enemies working over decades, in concert: Steve Jobs, Linus Torvalds, and most of all, two guys named Larry and Sergey.

Late on Monday, Microsoft announced its unsurprising, $7.2 billion plan to buy Nokia’s smartphone division. Nokia is the world’s largest manufacturer of phones that run Microsoft’s Windows Phone operating system (which is a bit like pointing out that, at 6-feet, I’m the tallest member of my immediate family). Microsoft is buying Nokia in order to control both the hardware and software in its devices; this move, Microsoft promises, will improve the phones themselves and make them easier to sell.

But this is the antithesis of the company’s Windows strategy. Though Microsoft insists otherwise, when this deal is done, the thing sold as Windows won’t be what it’s always been—it won’t be software that that runs on lots of companies’ hardware, a platform to unite disparate manufacturers’ devices. Instead, Windows will be much like Apple’s operating systems, iOS and Mac OS. Windows will be proprietary software attached to proprietary hardware—Microsoft’s code running on Microsoft’s devices.

In a document that lays out the “strategic rationale” for the deal, Microsoft makes a stirring case for vertical integration: for a single company that makes both mobile software and hardware together. By purchasing Nokia, Microsoft says it will be able to create better phones by reducing “friction” between hardware and software teams that now reside in separate companies. Combining the companies also improves marketing “efficiency” and “clarity”—Microsoft can sell a single Microsoft device that bakes in the best services from both firms (Skype, Office, Nokia’s mapping systems).

Finally, vertical integration helps Microsoft’s bottom line. Today, for every Windows-powered phone that Nokia sells, Microsoft gets less than $10 in software licensing fees. When it owns Nokia, Microsoft will be able to book profits on hardware, too. Rather than make less than $10 per phone, it will make more than $40.

Steve Jobs long pushed against Bill Gates’ idea that hardware and software should be made by different firms. And back in the PC era, Gates was right. Gates recognized that most computer users didn’t understand hardware. We couldn’t tell the difference—and didn’t really care much about—the processors, drives, displays, and other physical components that made up one PC versus another. As a result, making PC hardware was destined to be a bruising commodity business, with low brand recognition, constant price battles, and dwindling profits.

But software, Gates saw, was a different story. Software had a face. Software imprinted itself on users—once you learned one Windows PC, you understood every Windows PC. Unlike hardware, software enabled network effects: The more people who used Windows, the more attractive it became to developers, which meant more apps to make Windows computers more useful, which led to more users, and on and on. Finally, software was wildly, almost unimaginably profitable. After writing code once, you could copy it endlessly, at no marginal cost, for years to come—and make money on every single copy you sold.

But mobile devices altered that calculation. Today, hardware matters. Unlike in a PC that you kept hidden under your desk, the design of your mobile device affects its usefulness. Things like your phone’s weight or the way your tablet feels in your hand are all important considerations when you’re buying a device; you won’t choose a phone based on software alone, and you might pay a premium for a device that’s particularly well-designed. In the mobile world, as Apple has proved, hardware can command just as much of a profit as software.

You might argue that once the basic design of a good phone or tablet becomes well-known, lots of companies will copy it, and that hardware will again become a commodity. That’s the tide Apple is now battling against. At some point mobile components will become good enough and cheap enough that a $50 phone might function just as well as a $100 or $200 phone. When that happens, people will again start choosing devices by price, and hardware profits will dwindle to nothing. And, as happened with PCs, software, not hardware, will become the industry’s dominant business.

All that may well occur. (The fear of commoditized hardware explains Apple’s languishing share price.) But if mobile hardware does become a commodity and software once again becomes the determining factor in your choice of phone, we won’t see Microsoft profit from the shift. That’s because, in the last five years, a brutal, profit-destroying force has emerged in the tech world: Android.

Google’s mobile operating system—which is based on Linux, the open-source OS whose fans had long dreamed would destroy Windows—is free. Any mobile phone manufacturer can use and alter Android however it pleases. This accounts for Android’s stunning market share—close to 80 percent, according to IDC—and that market share gives Android the benefit of the network effects that once worked so well for Microsoft. Nokia was paying Microsoft $10 for every phone it sold, and in return it got an OS that can’t even run Instagram. Microsoft says that it wants to keep licensing Windows Phone to other manufacturers even after it purchases Nokia, but because they can always choose Android (which runs Instagram and everything else), few phone-makers are likely to take it up on that deal.

That’s why the Nokia purchase signals the end of Windows as a standalone business. There are now only two ways to sell software. Like Apple, you can make devices that integrate software and hardware together and hope to sell a single, unified, highly profitable product. Or, like Google, you can make software that you give away in the hopes of creating a huge platform from which you can make money in some other way (through ads, in Google’s case).

But you can’t do what Windows did—you can’t make profitable software on other companies’ commodity hardware. Thanks to Android, code is now a commodity, and Windows is dead.