This week Valve made the interesting call to launch their brand new Steam Controller separately and before the hotly anticipated Steam Machine. The Controller is coming May 4th priced at $100, but we're no closer to learning when the Steam Machine is launching, or crucially, how much it will cost.
The general theory is that Valve hasn't told us the price because of the whole DRAM pricing situation, fair enough, things are pretty rough in that area. But that got us thinking: we've learned a lot about the cost of PC parts since Valve first announced the Steam Machine last November, so just how screwed is Valve when they launch the Steam Machine at some point this year? Based on everything we know, how expensive is this system going to be?
What's Actually Inside the Steam Machine
To begin, we have to look at the hardware in the Steam Machine. As announced, the Machine will include a semi-custom AMD Zen 4 CPU with six cores and twelve threads, a semi-custom RDNA 3 GPU with 28 compute units, 16GB of DDR5 memory, 8GB of GDDR6 VRAM, either a 512GB or 2TB SSD depending on the configuration, and the usual extras: Wi-Fi 6E, Bluetooth 5.3, Gigabit Ethernet, and USB ports.
This hardware, if you've been following PC gaming closely, is not especially powerful by modern standards. A six-core Zen 4 CPU is fair to describe as mainstream to entry-level today when you look at all the CPUs available.
The RDNA 3 GPU with 28 compute units is going to be a little slower than the Radeon RX 7600, especially when factoring in the 110W power limit, and that GPU was entry-level when it launched three years ago. 16GB of DDR5, 8GB of VRAM, a 512GB SSD: those are all hardware choices you'd make on a budget system. Which of course is totally fine at a budget price point.
But the problem is that many of these components have gotten much more expensive since Valve planned out this hardware. In the middle of last year, 16GB of DDR5 would have cost about $50 at most parts retailers. A 512GB SSD also would have cost about $50.
Throw in a few hundred dollars for the CPU and GPU, some additional money for the other components like the motherboard, power supply, and cooling, and you can quickly see how the original plan was most likely a bill of materials around $600, maybe a little more than that. Certainly the talk at the time was a price similar to other entry-level gaming PCs.
But Valve has been hurt by the current situation with PC hardware pricing. Back at launch it was reported that the Steam Machine uses a type of memory called SO-DIMM, a more compact form factor designed for laptops and mini-PCs. Currently, the cheapest listing for 16GB of DDR5 SO-DIMM memory on Newegg is a module from ADATA, a single stick of DDR5-4800 priced at $195. That's about four times as much as Valve would have paid had they sourced memory at the start of 2025.
For the SSD, Valve have a couple of form factor options, but assuming they can choose whatever is cheapest: right now, the cheapest 512GB NVMe SSDs are around $90, such as the Patriot P320. It's nothing special, using PCIe 3.0 speeds, but it will get the job done for an entry-level system. Again, Valve have been hurt here, because this sort of hardware would have cost less than $50 at the start of 2025.
And for the 2TB model, things get worse. The cheapest 2TB SSDs on the market that use an M.2 NVMe interface start at $250, like the KingSpec model currently listed on Newegg. That's more than double what this component would have cost a year ago, which will make the 2TB model considerably more expensive than originally planned.
What this means is that for the base model, using off-the-shelf component prices in April 2026, Valve would be spending around $285 on just the DRAM and SSD. That's half the entire cost of a PlayStation 5 Digital console, even after the recent price increases that went into effect at the start of the month.
Then we have to factor in the rest of the component prices. It's not clear what sort of Zen 4 CPU Valve are using, but it's fair to assume it's going to be an entry-level option. On the desktop side, the closest match is probably the Ryzen 5 8400F, a version of AMD's Phoenix APU with the integrated graphics disabled. It'll likely be the laptop version of this chip soldered directly to the motherboard rather than the socketed 8400F, but the Ryzen 5 8400F is about $140 at the moment.
The GPU is based on RDNA 3 and uses 28 compute units, suggesting this is most likely a variant of AMD's Radeon RX 7600M for laptops. That part uses 204mm2 of TSMC N6 silicon; the closest desktop equivalent is the RX 7600, which launched a few years ago for $270. Today, AMD has deployed a similar GPU size on TSMC N4P in the Radeon RX 9060 XT. Both the 7600 and 9060 XT come in variants with 8GB of GDDR6 memory.
Again, Valve was probably expecting to pick up this hardware for a relatively affordable price. The RX 7600 cost $270 back in May 2023, so they'd have been hoping to secure this GPU core and 8GB of VRAM for a great deal, especially if the GPU core was coming from unused laptop dies. But today, that 8GB of VRAM is quite problematic.
We recently looked at GPU pricing for the Radeon RX 9060 XT and found that the 16GB model is currently retailing for $100 more than the 8GB model. That difference should be just $50 based on the MSRP, implying that the current retail cost for 8GB of GDDR6 memory is around $100 after margins.
Graphics cards are relatively high-margin products, so it's hard to know the true bill of materials cost for 8GB of VRAM, but it's not looking particularly great right now. Especially if AMD is selling the GPU and VRAM package to Valve as a bundle, as they do with other discrete GPU options, and charging a margin on top of both the GPU and memory components.
In any case, the GPU and VRAM components in the Steam Machine would likely cost $250 to $300 today as a DIY desktop product. Tallying up the cost of the CPU, GPU, DRAM, VRAM, and SSD, we end up with a price tag of around $700. And that's without factoring in everything else that goes into this sort of system.
There's still a motherboard, cooler, power supply, connectivity hardware, case, and packaging to account for. We'd estimate all of those things would cost around $150 in the current market, bringing the total bill to around $850.
Valve's Pricing Dilemma Has No Good Answer
Now, of course, this is based on off-the-shelf DIY component prices for the most important hardware in the Steam Machine. It's not realistic to think that AMD would be charging DIY component prices for the CPU and GPU used in this system, since DIY parts carry a higher margin than what AMD charges other companies directly, especially for semi-custom hardware. But even if Valve could source the CPU and GPU for around $200, they'd still be faced with a bill of materials around $700 to $750 in the current market.
But it's even more complicated than that, because this is the expected price Valve would pay for this hardware right now. The Steam Machine will presumably be sold for months and manufactured in waves. What if DRAM becomes even more expensive? What if SSDs get more expensive? If they set a price to match current market conditions, they could be in trouble if prices rise further, unless they make constant price adjustments, which companies typically don't want to do.
This is why Valve have yet to announce a price or launch date for the Steam Machine. You can't set a price if you don't have a good idea of what it will cost to manufacture the system.
But if you look at price trends for DRAM and NAND over the last few months, things are starting to stabilize at a high level, which should give Valve much better clarity into what they should charge for the Steam Machine now and throughout the rest of the year.
A recent report from Insider Gaming suggested that Valve have been "going back and forth internally on pricing and whether they would be willing to take a loss on the cost, at least in the short term." That makes sense given the current situation, as we're getting more clarity into hardware pricing in recent weeks, and Valve would be dialing in that final price as we speak.
The interesting part of that report, though, is the claim that Valve are discussing whether to take a loss on the hardware to begin with. Based on our estimates of component cost, if they want to make a profit, they'd probably have to charge at least $800, if not $900, depending on where the final bill of materials lands. Anything less than that doesn't seem realistic when memory components alone are this expensive.
That would place the Steam Machine in direct competition with the PlayStation 5 Pro, which currently costs $900. Is that going to be an attractive price, or will Valve need to take a loss to undercut Sony's most powerful console? Personally, I don't think there would be much demand in the current market for the Steam Machine at $900.
Valve have been put in a very difficult position. If they've been manufacturing the system for months, they would have built up a stockpile of inventory, either partially or fully assembled, but it will be difficult to sell that inventory if the Steam Machine's price is unattractive. This challenge compounds the more component prices go up: Valve would be forced to raise the price, fewer buyers would exist for the system, and that's bad news if Valve have contracts to manufacture a certain number of units.
On top of this, the hardware itself becomes more outdated the longer Valve wait to launch. Ideally they'd want the Steam Machine to be on the market for as long as possible before new gaming systems arrive. But the more outdated a system is, the less it's worth, which runs directly counter to the problem of rising hardware prices.
Basically, Valve is screwed here whichever way they go about it. We weren't expecting the Steam Machine to have a particularly compelling price when the system was announced in 2025, but now it's going to be even worse. We're interested to hear what you think the Steam Machine will cost and how much you'd pay for one, so let me know in the comments.