Valve made Microsoft's dream console

Summary of Valve made Microsoft's dream console

by The Verge

1h 40m•November 14, 2025
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Overview of Valve made Microsoft's dream console (The Verge)

This Vergecast episode explores Valve’s new Steam hardware (a compact Steam Machine, a next‑gen controller, and the Steam Frame headset), and uses those products to debate a bigger theme: is Microsoft abandoning consumer Windows/gaming in favor of cloud/AI infrastructure? Hosts (Joanna Stern, Sean Hollister, Jake Castranakis) review Valve’s designs and specs, contrast Valve’s Linux-first approach with Microsoft’s Windows/Xbox strategy, and dig into AI and robotics hype versus current capability.

Key topics covered

  • Hands‑on impressions of Valve’s Steam Machine (small TV console), new controller, and Steam Frame headset.
  • How Valve’s Linux/SteamOS approach can run Windows games (Proton) — sometimes better than Windows in constrained hardware.
  • Price/spec estimates and expected availability (early 2026).
  • Microsoft’s consumer strategy and Satya Nadella’s claim that models/agents will “use computers as well as a human.”
  • Skepticism about AI timelines and robotics: Joanna’s reporting on the humanoid robot Neo (remote‑operated, limited autonomy).
  • Short news/lightning round: Fire TV piracy crackdown, YouTube TV–Disney blackout, Apple’s iPhone Pocket (Issey Miyake), Apple app‑store mini‑apps, Waymo highway expansion, Toy Story 5 teaser, and FCC controversy over Brendan Carr’s “news distortion” policy.

Steam hardware: Steam Machine, controller, and Steam Frame (VR)

Steam Machine (the console)

  • Form factor: ~6‑inch cube designed to sit under a TV (about the size of a Kleenex box).
  • Performance: Roughly PS5 Pro territory (low‑laptop CPU variant + beefy GPU silicon); Valve wouldn’t give an MSRP.
  • Price estimates from reporting: roughly $800–$1,200 (speculation: Valve might target ~$800).
  • Software: SteamOS (Linux) with Proton translation to run Windows games. Anti‑cheat remains a blocker for some multiplayer titles (e.g., Fortnite decisions by publishers).
  • Positioning: A “PC under the TV” that targets console simplicity for PC gaming.

Steam controller

  • Design: More conventional gamepad than the old awkward Steam Controller, but with dual large touchpads (mouse emulation), gyro, and rich customizability.
  • Software: Cloud‑based community controller profiles that auto‑download per game (maps controller to older PC games, etc.).
  • Reception: Praised for blending normal controller feel with powerful mouse/precision inputs for legacy/PC titles.
  • Expected price (speculation): ~$60–$70.

Steam Frame (headset)

  • Hybrid headset that runs SteamOS on ARM and supports:
    • Local ARM apps (Android/Quest content).
    • Local VR content on the headset.
    • Wireless PC streaming via a 6GHz dongle (low latency, foveated streaming) to run PC VR and flat PC games wirelessly.
  • Four “modes”: local flat games, local VR (Android/Quest), streamed PC VR, streamed flat PC.
  • Market positioning: higher‑end than Meta Quest in build/comfort; could compete in both big‑screen PC experiences and Quest‑style standalone VR.
  • Release: Early 2026 (Valve).

Microsoft, Windows, Xbox, and the AI pivot

  • Panel argument: Microsoft appears to be deprioritizing consumer Windows and hardware, focusing more on cloud and AI infrastructure (Azure, enterprise/agents).
  • Sean’s blunt take: “Linux runs Windows games better than Windows now” in some handheld/TV form factors thanks to Valve’s customization.
  • Nadella quote discussed: imagining models/agents that “can use a computer as well as a human” — Microsoft’s future as “infrastructure for agents” (build platforms/tools so agents use software rather than humans).
  • Hosts are skeptical about the timeline and feasibility of that shift for consumers — many AI consumer features (CoPilot, Gemini Home, Google Photos edits/search) still perform inconsistently.

AI and robotics: Neo robot, expectations vs. reality

  • Joanna’s Neo reporting: the humanoid “butler” is mostly remote‑operated; tasks (fetching water, loading dishwasher) are slow and error‑prone. Founder positions this as data collection strategy (remote ops train autonomy).
  • Price: ~ $20,000 or lease (~$500/month); argument: you could hire a person instead.
  • Host takeaway: Robotics hardware and autonomous software remain far from the “robot butler” promise; the gap between hype and real capability is large and widening.
  • Broader AI skepticism: AI demos (robot fails, flaky Google Photos search, Gemini Home rollout problems) highlight brittle systems that often require human in the loop or careful prompting.

Other news & lightning round highlights

  • Brendan Carr / FCC: Bipartisan letter from multiple past FCC commissioners criticizes the “news distortion” policy as unconstitutional and warns against partisan weaponization.
  • Amazon Fire TV: Amazon to crack down on sideloaded pirated IPTV apps on Fire TV — could reduce piracy-driven Fire Stick adoption.
  • YouTube TV vs Disney/ABC/ESPN blackout: Ongoing carriage dispute (millions lost per day); YouTube/Google flexing leverage, negotiations critical for sports subscribers.
  • Apple news: iPhone Pocket (Issey Miyake) accessory — a high‑price fashion “phone sock” that generated mockery; Apple will allow “mini apps” inside apps with a 15% cut (regulatory/backlash context).
  • Waymo: Expanding limited highway rides to users in SF, LA, Phoenix — highways are a risky but essential step for practical AVs.
  • Toy Story 5 teaser: Villain is a tablet called “Lilypad” (release June 19, 2026).

Notable quotes and positions

  • “Linux runs Windows games better than Windows now.” — summary of how Valve’s SteamOS + Proton can outperform Windows in constrained consoles/handhelds.
  • Satya Nadella (paraphrase): “Imagine the model can use a computer as well as a human — our business will become infrastructure to support agents doing work.”
  • Hosts’ thesis: Valve is executing on the long‑dreamt idea of a PC in the living room better than Microsoft has managed; Microsoft is betting on AI/cloud infra over consumer OS/hardware.

Main takeaways

  • Valve’s hardware lineup (console, controller, headset) is ambitious and designed to make PC gaming more accessible to living‑room audiences; the controller’s configurability and SteamOS community profiles are immediate strengths.
  • Anti‑cheat and publisher choices remain the biggest compatibility/availability risk for Linux‑based PC gaming consoles.
  • Microsoft’s shift toward AI, cloud infrastructure, and “agents” suggests enterprise/cloud is its priority; consumer Windows/Xbox hardware is getting deprioritized, opening space for Valve and Linux.
  • The hype around AI and robotics continues to outpace practical consumer deployment; many demos still rely on human intervention or brittle models.
  • Watch for early 2026 for Valve hardware launches and for the evolving outcomes of carriage disputes (YouTube TV/Disney), Fire TV policy enforcement, and Apple/store policy changes.

What to watch next / recommended follow‑ups

  • Valve hardware release details and official pricing (early 2026).
  • Compatibility/anti‑cheat progress for SteamOS/Proton on competitive multiplayer titles.
  • Microsoft’s consumer roadmap after Nadella’s agent/infrastructure comments — any concrete product pivots for Xbox/Windows.
  • Broader AI product rollouts (Google Photos/Gemini Home, Microsoft CoPilot) to judge whether “agent” workflows work reliably for consumers.
  • Robotics milestones (autonomy vs remote‑ops) and business models for home robots (leasing, data collection).

If you want a condensed list to track: Valve release dates/pricing | anti‑cheat compatibility list | Microsoft/ Nadella interviews & product roadmaps | updates on YouTube TV/Disney deal | progress on Neo/unmanned household robotics.