Valve’s New Steam Machine Casts a Big Shadow on the Next-Gen Xbox

Valve's new Steam Machine is out early next year and it's set to deliver the most realised version of the 'PC as a gaming console' to date.

Valve’s new Steam Machine is one of those slam-dunk ideas, especially for those out there who have spent time with the company’s Steam Deck. A compact, all-in-one mini PC that is built for gaming, and small enough to install next to or under your TV. Steam, but in the form of a PlayStation or Xbox.

And that’s not hyperbole. Thanks to the brilliant SteamOS interface and operating system, as well as the underlying hardware that includes an AMD CPU and GPU combo, which Valve says is over six times as powerful as the Steam Deck, the Steam Machine can be thought of as the console counterpart to the Deck. An experience where you never have to leave the warm and inviting sea of blue that is Steam, but you still can if you want, because it’s also a PC.

However, it’s worth noting that, as a mini PC of sorts, the graphics hardware inside the Steam Machine is more comparable to a mainstream GeForce RTX 4060 or Radeon RX 7600, rather than something like the GeForce RTX 5070 or RTX 5080. With AMD’s FSR upscaling technology, it will be able to hit 4K 60FPS on modern TVs, running the latest games with recommended settings and even some light ray-tracing. 

Valve's new Steam Machine is out early next year and it's set to deliver the most realised version of the 'PC as a gaming console' to date.

Author: Kosta Andreadis
Date: November 18, 2025

Everything Steam

Put it this way, performance-wise, it sits somewhere between the Xbox Series S and Xbox Series X. As far as comparing the Steam Machine to a gaming PC, it’ll be on par with budget systems that are designed to deliver a ‘bang for your buck’ experience as opposed to running every game with max settings.

"Valve is creating a complete and affordable console-like experience for PC gaming, built around Steam - PC gaming’s largest platform."

For the spec-heads out there, the Steam Machine is powered by a custom AMD Zen 4 6-core, 12-thread CPU with a 4.8 GHz boost clock speed and 30W TDP. The graphics card, based on Radeon technology, features 28 RDNA 3 Compute Units, a maximum sustained clock speed of 2.45 GHz, 8GB of VRAM, and a 110W TDP. The machine itself features 16GB of DDR5 memory, with two storage options: 512GB or 2TB, which can be swapped out with another SSD of your choice.

These are modest specs, with many hardcore PC gamers pointing to the 8GB of VRAM limitation as a potential bottleneck for the system’s longevity. But that’s besides the point, or, well, it is the point. Valve is creating a complete and affordable console-like experience for PC gaming, built around Steam - PC gaming’s largest platform. From the new Steam Controller to the Steam Machine, the Steam Frame headset, and the existing Steam Deck, each piece of hardware runs the brilliant SteamOS, providing quick and seamless access to all the platform's features. 

And when it comes to anyone who has been gaming on a PC for some time, that means access to a vast library of games. 

Beating Microsoft to the Punch

Although it won’t be able to go toe-to-toe with a high-end gaming PC in terms of visuals and performance, it’s a piece of hardware that is more powerful than what 70% of current Steam gamers are using. In fact, with SteamOS, the hype and excitement surrounding the Steam Machine comes down to it delivering that promise of “Steam as a console” that Valve has been talking about and attempting to provide for over a decade.

"[The Steam Machine] is set to beat Microsoft to market with its plans of turning the next-gen Xbox into a console-PC hybrid running a custom Xbox-optimized version of Windows 11."

And with it set to launch in early 2026 (including Australia!), it’s also set to beat Microsoft to market with its plans of turning the next-gen Xbox into a console-PC hybrid running a custom Xbox-optimized version of Windows 11. Now, Microsoft has previously stated that its next-generation Xbox will be a premium console with cutting-edge hardware, so there’s no doubt that it will easily outperform the Steam Machine in terms of cinematic ray-traced visuals and 120 FPS gaming. It will also be significantly more expensive.

The next-gen Xbox will reportedly allow you to install Steam and other platforms in the same way as the new ROG Xbox Ally X handheld, which was developed in partnership with ASUS. On paper, it’s the more versatile system, especially when you factor in that SteamOS is unable to play games like Call of Duty and Battlefield 6 because of their sophisticated Windows-based anti-cheat technologies. 

Xbox’s Future is Now Intertwined with Valve and Steam

Still, the arrival of the Steam Machine puts considerable pressure on Microsoft to make the Windows operating system function more like an Xbox console. The version we see on the ROG Xbox Ally is a step in the right direction, but still a little clunky, prone to bugs, and full of weird Windows quirks that make it feel more like a PC than “This is an Xbox.”

"When it comes to the new ROG Xbox Ally X running Windows or modded to run SteamOS/Linux, the latter runs games up to 30% faster due to the work Valve has done in making SteamOS and its Proton compatibility layer a gaming-first platform."

Valve has had years to bring SteamOS to its current state, and with the Steam Deck and the soon-to-come Steam Machine Verified program, gamers and game developers won’t have any issues tweaking settings or trying to get a game to run that has one of those green ticks. 

To put it into perspective, when it comes to the new ROG Xbox Ally X running Windows or modded to run SteamOS/Linux, the latter runs games up to 30% faster due to the work Valve has done in making SteamOS and its Proton compatibility layer a gaming-first platform. The Windows overhead that affects performance is a very real issue, and has always been one of the reasons why game developers have been able to get hardware like the PlayStation 5 or Xbox Series X to perform better than expected.

By the time the next Xbox console rolls around, presenting gamers with a unified PC and console-like experience, Valve’s Steam Machine will have been on the market for over a year - and that’s the sort of head start that will be difficult to overcome if both systems offer a similar vision. On the other hand, the arrival of the Steam Machine will give Microsoft a clear picture of how a gaming-first operating system should look, feel, and perform. This level of competition could prompt the tech giant to deliver a more compelling product. 

Time will tell, of course, but there’s no doubt that Valve’s new Steam Machine is starting to cast a big shadow on the next-gen Xbox console.

About the author

Written By Kosta Andreadis
Kosta Andreadis is a veteran gaming and technology writer with decades of experience across news, reviews, and in-depth articles. Between Diablo seasons, he can be found creating new electronic jams (music, not the digital condiment) and tinkering with retro gaming hardware.
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