Microsoft’s Phil Harrison on Valve’s Steambox, Claims Hardware is a Really Tough Business

From a gaming standpoint, it's hard to argue that the biggest revelation at CES was the reveal of Valve's Steambox platform. While nothing concrete has been revealed, Valve just showing off the prototype at the show was enough to create enough noise that the big bous take notice.

One of 'em is former Sony exec and now Microsoft Studios chief Phil Harrison who has issued a warning to Valve and other would-be hardware makers (via Eurogamer).

Entering the hardware business is a really tough business…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.

Harrison adds that Valve and other would-be console developers can be successful "at a small scale," but added that it's "very rare" for a new hardware maker to get to scale…and by that, he means tens or hundreds of millions of units.

If you think Valve can ride on their brand name or on Steam's distribution system, Harrison thinks this isn't as cut-and-dry as that, too.

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.

Lastly, Harrison admits that he "admires Valve as a company and what they've achieved with Steam," but he also thinks we shouldn't choose Steam as a benchmark of success and that people should always seek to innovate and push beyond.

Do you agree with Harrison's statements that Valve entering the hardware biz isn't as easy most people think or do you think he's just fearful of how Valve can disrupt the console business? 

Keep in mind that Valve CEO Gabe Newel has already went on record to state that he wants a three-tiered pricing model for Steambox and he even wants the introductory one to be at a very affordable $99. 

Whatever the case might be, Harrison and the other execs at Sony, Microsoft and Nintendo would do well to keep an eye out for future Steambox developments. That is, of course, if they're not doing so already.