Steam Frame may be great, but it may not be a game changer for XR

The technical marvel of this headset

I’ve spent some time reading reviews and watching videos about the Steam Frame, and all agree that this is a great device. It seems that Valve, with Steam Frame, did for standalone headsets the same thing that it did for PCVR headsets with the Valve Index: they released a device that has no revolutionary super feature, but that is a very well-polished package. The Steam Frame is not the headset with the highest resolution or FOV on the market, but it offers overall an experience that is superior to many other devices.

There are a few things that I found incredible about it. The first one is the dimension and the weight. The headset is very lightweight: 440g for the whole device, and only 185 grams for the main unit. It is also pretty small to be a standalone device, and it has a pretty cool black design. People wearing it look like they are wearing ski goggles and they look rather good. In comparison, the weird 3-eyed alien design of the Quest looks very bad. We need headsets that feel comfortable and that look good on us, and in this, the Steam Frame is for sure a step forward.

Another amazing thing is how they optimized PCVR wireless streaming. The Steam Frame is made to stream content from your PC. The dongle creates a very strong network that the headset can connect to by using a dedicated antenna. And thanks to “Foveated Streaming”, the bandwidth of the connection can be heavily reduced while keeping the quality of what you are looking at incredibly high. The result is that PCVR content can be streamed with a quality comparable to a tethered connection and with just a small additional latency (as low as 2ms on a modern computer, Valve says). This is a wired-headsets’ killer feature. Many journalists found themselves in awe when trying Half-Life: Alyx on this device and described it as almost as crisp as on a PCVR headset.

The last big marvel is the compatibility layer. Steam Frame features a Snapdragon ARM processor and runs SteamOS, hence a Linux-based operating system. But thanks to the Proton compatibility layer and other magical libraries (like FEX), this device can also run Windows games and even Android APKs. So theoretically, it could run all your games from your Steam library and all your games from your Quest library. This is incredibly cool. And talking about compatibility: this headset can also run natively all your SteamVR games (provided that their requirements are compatible with its hardware), so this headset is made to play VR games in standalone mode, VR games streaming from your PC, and flatscreen games from your PC, too. The possibilities with Steam Frame are endless.

…but it is not without issues

No headset is perfect today, and the Steam Frame is no exception to this rule. Reading the reviews from both Ben Lang and David Heaney, I was able to learn about a few noticeable issues. Road To VR’s Ben Lang found that the headset even features a bit of screen door effect, which is absent from all the other modern devices. The resolution is good, but 2.1K x 2.1K is comparable to Quest 3, which is a headset from 2023. The display is a plain-vanilla LCD, with all the problems in contrast and black levels we all know. Ergonomics is not perfect. Passthrough is black and white and low-resolution (hello Quest 2), and the audio is definitely good, but not as cool as in the Valve Index.

I’m writing this just as an answer to all the enthusiastic rumors that were circulating about the device before the announcement: some people were waiting for the perfect headset, but no headset can be perfect today, and they are all a matter of compromises.

A headset for PC games

As an engineer and entrepreneur, I’ve learned across my career that no product can work well for every use case, but you must optimize it for one (or anyway, a few) use cases, where it should work very well. Valve made the choice to optimize the Steam Frame for PC/PCVR gaming. This explains the attention to comfort (people play PC games for a long time), to wireless streaming (so you can play your favorite PC game on a huge, giant screen in VR), and to compatibility with Windows games (many people play Steam games on a PC). This also explains why the passthrough quality is so low: it is not relevant for PC or PCVR gaming, so they did not invest in it.

Valve made something very logical: its main product is Steam, with which it makes a lot of money. So instead of trying to release a general-purpose headset for productivity, fitness, gaming, social, etc, and having to create a completely new ecosystem from scratch, it just built its XR headset around its already existing super-profitable gaming ecosystem. This is good for many reasons, one of which is that this headset already starts from Day 1 with thousands of compatible games. There is no need for Valve to invest in attracting content for the Steam Frame: it already has it.

This is a headset for games, and just games. In a moment where Meta seems to be abandoning VR gaming, Valve is doubling its investment in it.

A part of an ecosystem

With the Steam Frame, Steam Machine, Steam Deck, and Steam Controller, Valve created a fully integrated ecosystem. You can start a game on the Steam Deck on your bus, and then finish it at home with the Steam Frame wirelessly connected to your Steam Machine. If the game features cloud saving, you can have a seamless experience. And your Steam account synchronizes the library of games across all the devices.

As my friend and colleague Max Ariani said, Valve is building its own ecosystem. And it is true: it is a fully integrated hardware ecosystem, so tightly connected that I’m surprised that this has not been made by Apple.

And again, the purpose of it is to let you play games.

… but VR is more than games

I think that Valve dedicating its headsets only to gaming makes total sense from a business standpoint, because Steam is its cash cow. But as a VR professional, I think this decision takes us backwards.

One of the biggest consequences of the release of the Apple Vision Pro is that it convinced everyone that XR is not only for gaming, but it is a pervasive technology that can disrupt every moment of our lives. If we want XR to truly become mainstream, it shouldn’t become the next PlayStation, but it should become the next PC, or, even better, the next smartphone. Steam Frame goes back to the Quest 2 era, where VR headsets were only considered gaming devices.

This is one of the reasons why I think it won’t be disruptive for our ecosystem. Gaming-only devices have a big but still limited audience. Not everyone is interested in playing PC games. I think that for XR to succeed, we need the Word and PowerPoint of VR, not the GTA of VR.

The value proposition over Quest 3 is not clear

Steam Frame looks to me like a non-Meta Quest 3 headset. Some specs are better, some are worse, but all in all, it’s not that different. With Quest, you could already play both standalone games and PCVR games. Meta even launched a dedicated dongle for wireless PCVR in the past, exactly like Valve is doing today.

If someone wanted to play games in VR, he/she probably already bought a Quest or PCVR headset. I don’t think this headset opens new markets. Gaming is the use case for XR that has already been used and abused. And the Steam Library has been accessible to VR headsets since forever, too.

At this point, I find the Apple Vision Pro M5 more interesting: at least, with that monster processor, it enables some use cases that are impossible on all the other standalone headsets. That is for sure a unique value proposition.

Some people have been waiting for this “Deckard” headset as if they were waiting for a messiah, but we ended up with a headset that is just better suited for playing Steam games. This is not the disruption I was waiting for. Both on the use cases side and the technical side, this headset introduces nothing that can disrupt the XR market. It just enriches the Steam ecosystem and that’s it.

The Steam factor

Steam has a total of 160 million users, with a record of around 40 million concurrent users. Among these people, there are also many fans of the company and of its founder, Lord GabeN. Considering that this headset is made by Valve itself, and that is good not only for VR games, but also for flatscreen games, some power Steam users may actually decide to buy it.

Recently, people found some value in buying media consumption “AR” (not truly AR) glasses to play games or watch movies on big screens. These people may also be interested in a headset like Steam Frame that is able to let them play games on a giant virtual screen. So in general, I think some new people who have not been in VR until now may find interest in this headset. But I still don’t think they will be many. Currently, the percentage of people playing Steam on a VR headset is limited to about 2-3% of the players, and it is probably going to stay mostly the same.

The VR ecosystem on Steam is going to change

Something that I’m interested in is discovering how the Steam VR ecosystem is going to change. Currently, the PCVR Steam market is composed of hardcore VR gamers who want premium games. But with the launch of the Steam Frame, more casual standalone players are joining the same store, creating more variation than we had before.

Even more, with Meta putting gaming on the side and the Horizon Store having become a mess, many developers may be interested in trying the Steam ecosystem and seeing if it is profitable. This means that we may have an influx of many new games on the Steam store, many of them not with the quality and characteristics that the Steam users of the past may have wanted.

Quest has a huge library of games, with some hit titles that do not exist anywhere else (e.g., Beat Saber). But now the Steam Frame has a library of quality games (not necessarily in VR) that is huge. This device can, in a way, directly compete with Quest. It will be interesting to see the new equilibrium in our market.

The slow death of Lighthouse tracking and the revolution of PCVR headsets

Steam Frame substitutes the Valve Index, but it features inside-out camera-based tracking and not Lighthouse-based tracking anymore. Many months ago, I predicted that SteamVR and its basestations were going to disappear one day, and now, with Valve launching its own headset not requiring basestations, I think this process has started. Valve stated that it is interested in partners that want to carry on the SteamVR tracking concept, but I think that, with its main headset abandoning it, lighthouse tracking is going to slowly die.

This will have ripple consequences for all these companies using SteamVR tracking (e.g. Pimax, BigScreen). I think in a few years, all of them will have to run inside-out tracking, too. Not to mention the fact that with this high-quality wireless streaming proposed by Valve, many companies will have to abandon their tethered design, too (unless they target some niches like simmers).

It will be interesting to follow what is going to happen in the PCVR field in the next couple of years: I think some consequences are going to happen.

The compatibility issue

The controllers of the Steam Frame are made to make people easily play flat-screen games, because they mimic the controls of a gamepad. This is good for players of flatscreen games, but it is a pain in the ass for us VR developers, because now we have to support another type of controllers, with other types of buttons and functionalities. This is going to fragment the ecosystem even more.

Price can be a problem

The Steam Frame is going to cost “less than a full Valve Index kit”. This makes me think of a price around 800€. 800 wouldn’t be an impossible price, but it would still be high for many people. People are not buying the Quest 3, which is an amazing device and costs around $600, so I wonder why they should buy a headset that is more expensive and has fewer use cases. We have already seen with Quest 2 how price can influence the purchase decisions of people: above $299, hardly a VR headset is going to reach the mainstream. At 800€, I can imagine this device being purchased by the usual enthusiasts, prosumers, and early adopters.

A good headset, but not our saviour

The Steam Frame is definitely a good headset, and I’m very happy it has been released. For sure, it is introducing some innovations, and for sure, it is going to bring some new gamers into VR. But at the same time, I don’t see anything that is disruptive for the market: the use cases it covers were already covered before, and its technology is just a good polishing of some technologies that were already on the market.

In my opinion, it is going to sell a couple of million units, mostly selling to people already in the PCVR ecosystem. Hopefully, even 1-2 million more if the device is truly good. But I doubt that it will reach the big numbers of Quest 2 (around 20M of sold devices), so I doubt it will make a big difference for the XR space. It is too expensive and too limited in functionality. It will have ripple effects on the PCVR community and PCVR hardware, though.

Valve played the game the safe way, by just creating a headset around its Steam store and nothing more. But XR, to arrive at AR glasses we wear every day, should make some bold moves and expand to many use cases. This headset instead just focuses on playing games in VR. Which is useful and fun, but still limited.

So thanks, Valve, for this interesting release, but this is not what makes XR great again.

(Header image by Valve)

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