Gabe Newell says Steam Deck’s aggressive pricing “painful” but “critical”

Compared to Nintendo Switch OLED’s £309 price point, the newly announced Steam Deck’s starting price of £349 sounds like a significant bargain. However, Valve president Gabe Newell shared that the price has drawbacks for the company.

Speaking to IGN, Newell said the company needed to be “very aggressive” in terms of pricing, citing price performance as “one of the critical factors in the mobile space”.

While his immediate priority was on Steam Deck’s performance and experience, especially in the hands of PC players, Newell said, “Price point was secondary and painful. But that was pretty clearly a critical aspect to it.”

The implication is that Valve would be selling the Steam Deck at a loss. In comparison, the Nintendo Switch has always been sold at a profit, while the Switch OLED’s higher price point also ensures it is sold at a profit, despite the costs of upgrades only estimated as costing an extra $10 per unit.

Steam Deck
Steam Deck. Credit: Valve

It’s not clear how much of a loss the Steam Deck would be selling at, but its specs reveal that its GPU uses the AMD RDNA 2, which is only just coming to market for gaming laptops, which are usually priced no lower than £1,000.

Nonetheless, Newell said that the aggressive pricing for Steam Deck is a long-term strategy in order to “establish a product category”.

“Nobody has ever said, ‘Oh, we have a giant success where clearly there’s huge demand for this, but our margins are too thin.’ Right? And a lot of people have overpriced things and killed the opportunity, and sort of convince people that it’s an uninteresting category from the get-go,” he added.

On the Steam Deck’s longevity, Newell said:

“So we’re definitely… our view is… we’re doing this for the long haul. And there’s a lot of opportunity. And so far, everything we’re hearing from our partners, mainly because they’re the ones that we’ve talked about it the most, is a lot of enthusiasm that this is something that they’re really going to be happy to see the PC community pushing into this space.”

Elsewhere, GTA Online‘s summer update is coming next week, with a focus on underground racing.