

Research and development is probably very high when you consider Proton, SteamOS, and the semi-custom CPU and GPU. Something between $50 to $100 million would be typical. Silicone is famously expensive in R&D, Proton has continuous costs (and has for quite a while now) that rack up, and SteamOS is literally an operating system. That’s a lot of salaries to pay.
I reckon they’re taking advantage of being private and playing the long game. Very, very long game. They’re not really in danger as long as Steam is successful, but I can’t blame them for wanting a decent gross margin so they can at least cover hardware costs. Especially with memory prices right now, I wouldn’t be surprised at 1000€ here in Germany, though I wouldn’t be happy about it. I would happily buy at 900€ (≈$1040), and be ecstatic at 800€ (≈$920).



I don’t think this is accurate. The majority of IRL gamers I know are casual people with crappy Minecraft-level pre-builts (hugely overpriced usually; I know someone who spent 1.1k on a 3060 Ti pre-built) or 10 year-old computers built by their neighbors. A lot of casual gamers exist and the steam machine will be very appealing to them as an easy upgrade.
In a way, you’re right. A lot of people will be upgrading potatoes. Or replacing thin air next to their TV’s.
Even I, with a custom built with a 7900 XT running openSUSE TW, am considering this for doing stuff in the living room (or similar, I live in a tiny apartment lol) with friends or just casual-TV gaming and media. I don’t have that right now, and even 900€ sounds appealing for doing that with a Linux-based computer (and gamescope!!!, which I can’t get working on my device) I have full control over, but know will work.
I don’t know of something equivalently priced, but it there is something, please tell me. I think they have a market here. I personally, at least, have been waiting years for something like this to recommend to friends and to an extent to myself.