Alienware says its Steam Machine will be its "least profitable" system [Update]

Update: The original version of this story implied that Alienware wasn't confident in the potential success of Steam Machines as a broader initiative. We've since omitted this. We apologize for the error.

Update 2: Alienware general manager Frank Azor provided the following statement: "Alienware is very optimistic about PC gaming's future and its opportunity to extend to the TV. We have been partners with Valve since the inception of the Steam Machine over 2 years ago. Our decision to invest in developing the purpose-built Alienware Steam Machine, pairing it with incredible performance and pricing it as aggressively as possible has everything to do with how much we believe in this vision and want to see it materialize."

Original: Valve's Steam Machines are strange beasts. They're PCs running a Valve-specific version of Linux, attached to televisions in the living room and driven by a controller instead of a keyboard and mouse. That's a tough sell for PC gamers, and a big challenge for the hardware companies who will sell the systems, often at low prices so they can compete against the cheaper consoles. Alienware , the Dell-owned gaming PC manufacturer and largest company in the space, definitely understands how tough the marketplace will be. Individually, the company doesn't believe its Steam Machines will be very profitable compared to the profit it nets from its existing desktops and laptops.

In an interview with the Wall Street Journal , Alienware general manager Frank Azor admits that its first Steam Machines will face a tough margin between the cost of manufacturing and their price at retail. "It's going to be very challenging," Azor says. "This will absolutely be the least profitable system we ever sell."

This doesn't mean that Alienware is bearish on the initiative, of course, but why would Alienware expend the time and effort to develop a unique PC suited for the living room if it didn't expect a significant profit per system? According to WSJ, manufacturers are taking the risk because Valve's scale is so massive— 75 million active users , at last count—with potentially more non-PC gamers jumping on the bandwagon through Steam Machines. Telltale Games CEO Dan Connors tells WSJ that PC games represent around 30 percent of the company's revenue, with Steam representing most of that number. If Valve's push into the living room is successful, Alienware could be at the beginning of that success and stand to gain recognition as one of the first or best Steam Machines available.

Alienware and the other Steam Machine manufacturers so far do not have a release date for their machines. We're hoping to hear more on when Valve will consider SteamOS final enough for release at this year's E3.

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