The tl;dr version: Steam Deck is predicted to sell over 3 million units of its handheld PC gaming device, the Steam Deck, which comes with a 7-inch LCD display. It’s a niche market, but the time may be right for Valve’s software, SteamOS, to open the door for more OEMs to build their own PC gaming handhelds.
Valve’s Steam Deck is projected to sell over 3 million units by the end of 2023, according to a recent report from Omdia. While the portable gaming PC remains a niche product, Valve has plans beyond hardware sales. Valve is set to release SteamOS to the public in 2023, which will allow boutique hardware manufacturers to adopt Valve’s gaming-first operating system for their devices, and traditional gaming PC OEMs will have an opportunity to differentiate themselves by entering this new product category. Valve aims to increase its addressable market by using early usage data to refine and improve the SteamOS software. By reducing its dependence on Windows, Valve is also targeting Steam for Chromebooks and Tesla vehicles. Despite Steam Deck’s limitations, such as limited retail presence and unsupported key titles, Valve’s business model creates value by expanding the addressable market and positioning itself as a leader in a new category of portable gaming PC devices.
Handheld Gaming is a Display Business Opportunity
The display specifications for the Steam Deck compare favorably to similar devices in the portable gaming PC category. The 7 inch diagonal size and 1280 × 800 pixel resolution with a 16:10 aspect ratio are similar to those of other handheld gaming devices, such as the Nintendo Switch. However, the Steam Deck’s display is an optically bonded IPS LCD technology while Nintendo is using an OLED display. But what really matters is, SteamOS is expected to open the door for PC handhelds in 2023, with the expectation that Valve is ready for OEMs to proliferate its technology on its own devices. With boutique hardware manufacturers already making competing handheld PCs, SteamOS’ parent, Valve, is hoping to also do something that has been promised for some time, but not fully realized, popularizing gaming on Linux devices.
It’s easy to criticize the Steam Deck’s display for not being an OLED or some other variant of the latest and brightest but the reality is that it is hard to imagine a better screen on a device that costs $400 for the entry-level product with higher prices for more storage. The only limitation seems to be the size of the screen, which may make it difficult to appreciate the visual details of very recent games but that kind of misses the point, it’s a handheld PC so, it’s going to fit in your hands.
It may be that PC gaming handhelds are too niche, but gaming is a top-down driver for a brand, if not a profitable channel by itself. You could also argue that a SteamOS handheld would only play the games that Valve offers, but Nintendo’s Switch only plays Nintendo games. It’s not unusual for gamers to have multiple devices, and these products fall into a price band that makes that a real possibility. A SteamOS device would also be a Linux-based platform, and PC gaming needs to get away from Windows, at some point, please let it get away from Windows. That’s a lot of ifs, but while fashions change, gamers grow up, and graphics hardware evolves, the market remains solid and is well-defined.
