That Depends on Whether They Need One
That depends on whether they need one.
Ars Technica UK published an editorial called, Hey Valve: What's the point of Steam OS? The article does not actually pose the question in it's text — it mostly rants about technical problems with a Zotac review unit — but the headline is interesting none-the-less.
Here's my view of the situation.
The Death of Media Center May Have Been…
There's two parts to this story, and both center around Windows 8. The first was addressed in an editorial that I wrote last May, titled The Death of Media Center & What Might Have Been. Microsoft wanted to expand the PC platform into the living room. Beyond the obvious support for movies, TV, and DVR, they also pushed PC gaming in a few subtle ways. The Games for Windows certification required games to be launchable by Media Center and support Xbox 360 peripherals, which pressures game developers to make PC games comfortable to play on a couch. They also created Tray and Play, which is an optional feature that allows PC games to be played from the disk while they installed in the background. Back in 2007, before Steam and other digital distribution services really took off, this eliminated install time, which was a major user experience problem with PC gaming (and a major hurdle for TV-connected PCs).
It also had a few nasty implications. Games for Windows Live tried to eliminate modding by requiring all content to be certified (or severely limiting the tools as seen in Halo 2 Vista). Microsoft was scared about the content that users could put into their games, especially since Hot Coffee (despite being locked, first-party content) occurred less than two years earlier. You could also argue that they were attempting to condition PC users to accept paid DLC.
Regardless of whether it would have been positive or negative for the PC industry, the Media Center initiative launched with Windows Vista, which is another way of saying “exploded on the launch pad, leaving no survivors.” Windows 7 cleared the wreckage with a new team, who aimed for the stars with Windows 8. They ignored the potential of the living room PC, preferring devices and services (ie: Xbox) over an ecosystem provided by various OEMs.
If you look at the goals of Steam OS, they align pretty well with the original, Vista-era ambitions. Valve hopes to create a platform that hardware vendors could compete on. Devices, big or small, expensive or cheap, could fill all of the various needs that users have in the living room. Unfortunately, unlike Microsoft, they cannot be (natively) compatible with the catalog of Windows software.
This may seem like Valve is running toward a cliff, but keep reading.
What If Steam OS Competed with Windows Store?
Windows 8 did more than just abandon the vision of Windows Media Center. Driven by the popularity of the iOS App Store, Microsoft saw a way to end the public perception that Windows is hopelessly insecure. With the Windows Store, all software needs to be reviewed and certified by Microsoft. Software based on the Win32 API, which is all software for Windows 7 and earlier, was only allowed within the “Desktop App,” which was a second-class citizen and could be removed at any point.
This potential made the PC software industry collectively crap themselves. Mozilla was particularly freaked out, because Windows Store demanded (at the time) that all web browsers become reskins of Internet Explorer. This means that Firefox would not be able to implement any new Web standards on Windows, because it can only present what Internet Explorer (Trident) draws. Mozilla's mission is to develop a strong, standards-based web browser that forces all others to interoperate or die.
Remember: “This website is best viewed with Internet Explorer”?
Executives from several PC gaming companies, including Valve, Blizzard, and Mojang, spoke out against Windows 8 at the time (along with browser vendors and so forth). Steam OS could be viewed as a fire escape for Valve if Microsoft decided to try its luck and kill, or further deprecate, Win32 support. In the mean time, Windows PCs could stream to it until Linux gained a sufficient catalog of software.
Image Credit: Wikipedia
This is where Steam OS gets interesting. Its software library cannot compete against Windows with its full catalog of Win32 applications, at least not for a long time. On the other hand, if Microsoft continues to support Win32 as a first-class citizen, and they returned to the level of openness with software vendors that they had in the Windows XP era, then Valve doesn't really have a reason to care about Steam OS as anything more than a hobby anyway. Likewise, if doomsday happens and something like Windows RT ends up being the future of Windows, as many feared, then Steam OS wouldn't need to compete against Windows. Its only competition from Microsoft would be Windows Store apps and first-party software.
I would say that Valve might even have a better chance than Microsoft in that case.