The Apple TV has always been a bit of an oddity. Apple’s puck-shaped streaming device is the company’s sole contender for the living room, yet it doesn’t bring anything to the television screen that isn’t better delivered by other streaming boxes, videogame consoles, or, with the rise of “smart” devices, the television itself. Still, Apple’s tenuous grip on customers’ living rooms has Valve’s Gabe Newell, who is working on the Steambox PC-slash-console, worried.
Speaking to a class at University of Texas’ LBJ School of Public Affairs, Newell reportedly said:
The threat right now is that Apple has gained a huge amount of market share, and has a relatively obvious pathway towards entering the living room with their platform. I think that there’s a scenario where we see sort of a dumbed down living room platform emerging — I think Apple rolls the console guys really easily. The question is can we make enough progress in the PC space to establish ourselves there, and also figure out better ways of addressing mobile before Apple takes over the living room?
There’s actually a lot packed into that small paragraph, so let’s consider each point:
“The threat right now is that Apple has gained a huge amount of market share, and has a relatively obvious pathway towards entering the living room with their platform.”
There’s no denying that Apple has captured large portions of the smartphone and tablet markets, but both markets are finally pushing back against Apple’s dominance. Apple doesn’t have as large a marketshare as Android in the smartphone category, and a mix of Samsung, Amazon, and Google-built tablets have ended the iPad’s reign as king tablet.
And, despite the obviousness of Apple’s pathway to the living room — release a television already, damn it! — the company has always been careful with its approach to the living room. Steve Jobs referred to the Apple TV as a “hobby” at two conferences, spaced years apart, and Tim Cook has alternately referred to the device as a hobby or as an area of “intense interest.” Some could see this as a bait-and-switch, but so far it seems that Apple’s CEOs have been upfront about exactly what the device means to the company.
That isn’t to say that it couldn’t happen. Hell, Apple could make its way into the videogame console market by beefing up the existing streaming box, adding access to games and opening the platform to developers. Some games and apps are able to take advantage of both an iOS device and the Apple TV to create a new experience, as Graham Spencer notes at MacStories, but the current offerings are mediocre. And, given how long it took Apple to add Hulu Plus to the Apple TV, waiting for open access feels a bit like waiting for a snowstorm in July.
“I think that there’s a scenario where we see sort of a dumbed down living room platform emerging — I think Apple rolls the console guys really easily.”
The first part of this sentence rings true. It’s easier to enter the living room in 2013 than it was back in the 90s or the turn of the century, when Nintendo and Sony blocked or killed just about every competitor. Now we have projects like Ouya and GameStick (both Kickstarted, Android-based consoles) that bring “good enough” options to gamers on the cheap. These devices aren’t as technically powerful as traditional consoles, but they are working to capitalize on the ever-growing casual market.
So far as Apple’s “rolling” of the console guys… That one’s a bit harder to accept. Sure, Sony and Nintendo aren’t in the best of shape — Nintendo had to do a complete about-face on its financials because its Wii U console isn’t meeting expectations — but Microsoft won’t go so easily.
For all its faults as a company, whether it’s Windows 8′s lackluster reception, the bizarre price and build of the Surface tablet, or Steve Ballmer’s repeated demonstrations of just how little touch he has with the consumer market, Microsoft knows how to do gaming. The Xbox and Xbox 360 consoles were able to find a market despite Nintendo and Sony’s dominance, and Microsoft has used this success to become a genuine living room powerhouse.
Even if Apple manages to beat Nintendo and Sony, it’s probably rough to describe the shift as a “rolling” of the competition. Perhaps a better metaphor would be “a changing of the guard.”
“The question is can we make enough progress in the PC space to establish ourselves there, and also figure out better ways of addressing mobile before Apple takes over the living room?”
Ah, now we’ve gotten to the goods. Newell has touched on the fact that Valve (and its Steambox and Steam gaming platform) are fighting a multi-headed beast. It isn’t necessarily enough to grab the PC — though Steam is already a popular gaming platform — and it isn’t enough to get mobile, either. The future of the living room is multi-platform.
Valve will probably benefit from Apple’s sluggishness as it races to enter both markets. Even if Apple introduces a new, open, more powerful living room device tomorrow, the sheer size of Steam and its user base could allow Valve to grab the “hardcore” market and work its way down from there. Competing with videogame consoles requires console-quality games, and those are rare on the App Store.
Newell repeated the Apple threat later on in his lecture, saying that ”The biggest challenge, I don’t think is from the consoles.” He continued, “I think the biggest challenge is that Apple moves on the living room before the PC industry sort of gets its act together.”
This is probably the most prescient observation from the lecture. Apple beating Microsoft and the Xbox console (and, perhaps, platform) seems like a longshot — Apple entering the living room before Dell, HP, Lenovo, and whoever else realize that that’s the next big computing market doesn’t.
Isn’t that what Apple’s done best for the last six years? The iPhone, the iPad, the MacBook Air; Apple shipped all of these and shaped the industry’s perception of entire product categories before many competitors even realized that people would give a damn.
But Gabe Newell is no Steve Ballmer, Meg Whitman, or Mike Lazaridis. He knows that even if Apple isn’t a pressing threat at this juncture that it could become one in the near future, and that foresight makes Valve better prepared for that seemingly-inevitable conflict than everyone else Apple has fought against.
[Image courtesy Atajo de locos]