The PS5 can only play games that you pay Sony a tax to play. The steam machine can play any game, including those bought outside Steam and thus without paying valve a tax.

This means the PS5 is subsidised, whereas Valve hardware does not tend to be. They have confirmed that internally all divisions must be roughly profitable/break-even.

Why can’t you imagine it? The console makers have been selling at a loss for 3 maybe 4/5 decades.

Edit: looks like it took 10 million PS5s to break even. The article is 5 years old I wonder if it’s true in 2026.[2]

> The existing industrial arrangement at the time was that of a bundled console-plus-cartridge business model, where the console manufacturer (say, Atari with its VCS/2600) sold the console at a loss and cross-subsidized it with the money made on cartridges sold with a huge profit margin.[1]

[1] https://thereader.mitpress.mit.edu/how-nintendo-bled-atari-g...

[2] It took Sony years to stop losing money on PS3 sales, but the company stopped selling the PS4 at a loss around six months after its debut in 2013. The PS5 has taken ever so slightly longer, but it’s clearly not repeating the costly exercise of the PS3 despite early reports suggesting Sony was struggling with PS5 pricing due to expensive parts.

[2] https://www.theverge.com/2021/8/4/22609150/sony-playstation-...

The base PS5 does not have better hardware. Though the PS5 Pro outperforms the Steam Machine and is still cheaper than it..

They were originally sold at a loss, then became per-unit profitable at some point, and now they might be eating a loss on them again. But they lock in hardware prices years in advance.

PS5 has a lot parts in high volumes negotiated years in advance so they can leverage lower prices than valve. Valve ships like 10% max of the volumes that Sony sells.