Valve unveiled the new Steam Machine earlier this week, and it's cute (if you're into cubes, anyway). But it's not exactly a powerhouse machine: PC Gamer hardware editor Jacob Ridley, who understands this stuff far better than I ever will, called it "fairly underpowered," noting that it rocks just a 200 watt power supply—a fraction of the PSUs in most gaming rigs. A good friend of mine, a longtime PC gamer, asked me, "Why the hell would I ever want something like this?" My answer, simply, was, "You wouldn't."
But that, according to Larian director of publishing Michael Douse (and I agree wholeheartedly on this) is entirely the point. Valve isn't coming for committed PC gamers who know what they're doing and want the lights to dim when they fire up their tabletop fusion reactors. It's gunning for people who want Steam games on the TV without any dicking around.
"Valve are probably betting on the fact that anyone who wants more demanding PC hardware on their TV is part of the audience who know how to turn any PC into a Steam Machine," Douse, always quick with a well-considered opinion, wrote on X. "Genuinely no point making a high-spec Steam Machine
I think Valve never had intentions of making profit with its hardware division (Probably why they have a 2-year warranty and don't mind hardware returns that much). They just don't want total loss leaders ala Costco Hot Dog, so are trying to find a good balance.
"We don't want people to think we're getting into hardware because we want to make a ton of money, because hardware is traditionally a low-margin, crappy business. We believe that in order to push the company's platforms forward we need to design hardware that brings better experiences for people."
(paraphrased) Gabe Newell, from Bringus Studios' video "Valve's Secret Computer that I'm not supposed to have" , with interview footage provided by Tyler McVicker.