PC gamer here - Valve is making suckers out of every PC manufacturer that signed on the Steam Machines program. Part of it is the PC companies' fault, but most of the blame lies with Valve.
Who are Steam machines for? Console gamers who don't have a gaming PC. Getting a 360/PS3 owner to switch to a Steam machine rather than a PS4 or Xbox One is critical, since most people don't buy multiple consoles within the span of a year or two.
If Steam machines are trying to win over people who have never done PC gaming before, why is the cheapest one $499? If Microsoft stops shipping Kinect with every Xbox One and drops the price, it would leave these Steam Machines in the cold at the $500 price point. Meanwhile, the consoles that everyone has heard about will be $100 cheaper. Each will have exclusive games you can't get on Windows, let alone a PC running Linux.
People use consoles for the ease of use - they don't need to check system requirements or change graphics settings. The Steam machine program should be addressing those concerns with PC gaming. Instead it's the same old PC gaming with Big Picture mode added on top of it.
There are a lot of great benefits to PC gaming, and Steam machines capitalize on none of them, while leaving most of PC gaming's flaws clearly intact.
edit: Apparently Valve says these first-generation boxes are for PC gamers, not console gamers.
“We have 65 million users with value in Steam accounts, and they want those games – their libraries – in the living room,” claimed SteamOS and Steam Machine designer Kassidy Gerber. “I think part of the value proposition is that we’ll be able to support all those excellent titles in the living room. I think we’ve proven we’re committed to holding onto your library for you.”
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