Super or Sketchy? iBuyPower Reveals its Steam Machine

Earlier this year, gaming powerhouse Valve finally started to lift the curtain on its plans to get into the hardware game, a move that was long-predicted by fans of its games and its digital game-distribution platform, Steam. The company unveiled the Linux-based SteamOS, the Steam Controller, and the Steam Machine, the last of which would be a kind of computer that ran SteamOS, but could come in various configurations from Valve or from other companies.

Last month, Valve released the specifications of the Steam Machine prototypes it’ll be sending out, and a post on the Verge estimated that the cost of building one would fall somewhere “between $700 and $1,800 if you followed Valve’s formula.” But yesterday, PC distributor iBuyPower revealed its own Steam Machine build that it plans to have on display at CES in January—and according to another post on the Verge, it’ll cost about the same as Microsoft’s Xbox One: $500.

Apparently the iBP Steam Machine will offer up Wi-Fi, Bluetooth, a 500GB hard drive, “a multicore AMD CPU and a discrete AMD Radeon R9 270 graphics card,” and a Steam Controller, all for the same price as Microsoft’s newest console. Considering that iBuyPower is one of the major sponsors of Major League Gaming, one would have to imagine that the company knows what it’s doing when it comes to building and selling gaming rigs. But, I’ll be honest, I’d never heard of the company until today.

We’ll have to wait and see whether or not iBuyPower’s Steam Machine can deliver on Valve’s promise, and what kind of sacrifices are being made in order to deliver a unit that costs so comparatively little. Either iBuyPower has been able to get a good deal on lots and lots of parts to be able to offer a rig like this and make a profit, or the machine will be skimping in other areas that won’t be clear until people have the chance to give it a shot.

That’s because most gaming consoles are sold at a loss, near enough to it that each console sale barely breaks even. Most console manufacturers make their money back in game and accessory sales, so every time you buy a $60 Xbox One game, Microsoft gets a piece of that.

But iBuyPower, by comparison, would have no such revenue model. They won’t be able to sell subscriptions to an online network, like Xbox LIVE or PlayStation Plus, and they can’t make a dime on any games sold via Steam. So where will iBuyPower make its money by selling a $500 gaming PC to rival one that’s been spec’d out to cost $700 or more?

Like I said, I’ve never heard of iBuyPower, so the news that it’s going to be selling its own Steam Machine has me cautiously intrigued. Does this company have what it takes to bring PC gaming to your living room? Hopefully we’ll learn more during CES next year.