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The Alienware Alpha is a good first attempt at the perfect living room gaming PC. The form factor is ideal for this sort of system: compact with a good selection of ports, adjustable RGB LED lighting, and decent cooling with a touch of upgradeability. It's significantly smaller than the PlayStation 4 or Xbox One, and looks great among the other devices in a typical living room setup.
Alienware has also succeeded, mostly, in getting the performance of the Alpha up to scratch. The combination of a Core i3 processor, dedicated mid-range graphics, and 4 GB of RAM is quite good for the entry level system. Unfortunately the 5,400 RPM hard drive is a major performance bottleneck, essentially requiring a manual SSD upgrade to improve load times and stutter in some games.
Despite the issues with hard drive performance, generally speaking you'll see overall system performance better than that of the current generation consoles. All games I tested were playable at 1080p and decent frame rates, and this is without turning down graphics levels significantly from the maximum. If you're playing a game that escapes HDD-related stutter, the experience is sharper and better than any console on the market today.
The Alpha is also easy to operate thanks to the Alpha UI, Steam Big Picture mode and the included Xbox 360 controller. The Alpha UI can be a bit sluggish, but it's just a launching pad to Steam, where you'll find a fluid and feature-rich interface. You get all the benefits of gaming on a PC, such as a massive game library, cheap games and frequent sales, and modding support.
It's a little bit tricky to play games that you've purchased outside of Steam, as you'll almost certainly have to plug in a keyboard and mouse to install them, let alone play them. This is possible through the front USB ports, though I'd like to see Alienware try and address the issue of non-Steam games through a more advanced Alpha UI. Perhaps a custom launcher for Origin, Uplay and others that is controller-only is in order.
The Alpha is a very good value when considering the parts inside. A quick system mockup using parts from Newegg - including a cheap Core i3 CPU, GTX 750 Ti graphics card, 4 GB of DDR3-1600, a wireless-AC card, wireless Xbox 360 controller, and a compact-ish case - costs $540. This is just $10 under the asking price for the Alpha, isn't nearly as compact, and doesn't include a Windows license. Alienware has hit the nail on the head in this respect.
The upgrade options offered by Alienware aren't as good. The $699 option upgrades the system to 8 GB of RAM and a 1 TB hard drive; $150 more for $45 worth of upgrades. The $799 option comes with the aforementioned upgrades and a quad-core Core i5 CPU; $250 more for around $145 of upgrades. The top-end $899 model comes with a 2 TB hard drive, 8 GB of RAM and a Core i7 CPU; $350 more for $270 of upgrades.
The upgrades become better value for money as they increase, but aren't nearly as good value as the entry-level model. There are also no GPU upgrade options, which is a little disappointing considering it would give the biggest performance uplift of any upgrade.
With all this in mind, I would only consider purchasing the cheapest model, upgrading RAM and storage (to an SSD) by yourself at a later stage. Spending $150 on an extra 4 GB of RAM and a new 250 GB SSD would give you much better performance than choosing Alienware's $699 model if you're willing to sacrifice some storage space.
It's not a complete slam dunk for Alienware, but I can see what they were trying to achieve with the Alpha. The system is compact, performs well and gives you access to a huge library of games, which could be enough of a reason to justify a purchase. At the same time, the spinning hard drive is a major hindrance and the console's handling of non-Steam games isn't great. It's a good first-generation system, though, and I look forward to what the Alpha line will bring in the future.
Pros: Decent performance provides consistent 1080p gaming in a great form factor. It's a PC running Steam, so you get a massive game library. Entry-level model is good value.
Cons: 5,400RPM hard drive is a big performance bottleneck. Doesn't handle non-Steam games elegantly. Upgrades aren't as great value.