Does Nvidia Hold the Key to a Linux-Based Steam Box?

In an interview with The Verge's T.C. Sottek, Valve's Gabe Newell confirmed that in addition to working with third-party manufacturers, Valve is internally developing its own Steam Box:

"We'll come out with our own and we'll sell it to consumers by ourselves. That'll be a Linux box…"
Source: The Verge

For Newell to confidently position Linux as their platform of choice takes guts. Presently, Windows is the default operating system for the majority of Steam users thanks to DirectX, Microsoft's proprietary software for rendering in-game visuals. Since Valve's proposed Steam Box will be in direct competition with Microsoft's Xbox business, in addition to supporting a competing desktop OS, it has a huge hill to climb if it hopes to elevate Linux as a viable gaming platform.

It wouldn't be unreasonable to doubt Valve's ability to do so on its own, though. The current Linux version of Steam illustrates the huge gap in software support: out of the 1,868 games available on Steam, only 41 are playable within Linux. Considering this, there has to be something going on behind the scenes for Newell and Valve to feel so confident about launching their cherished brand into retail.

Nvidia, one of Valve's partners in regard to Linux support, may be the key to its success.

During Nvidia's press conference at CES, co-founder and CEO Jen-Hsun Huang revealed the next generation of their cloud platform, now called the GeForce GRID. Quite simply, GRID lets users stream PC games from external servers that handle all rendering and processing tasks to a wide range of devices. In this scenario, end users can experience best-in-class visuals independent of their hardware's specifications.

GRID probably reminds you of other services like OnLive and Gaikai: it's basically the same, just from a different provider. However, the cloud-gaming market has changed quite a bit in the last year. OnLive's fate is up in the air after a buyout last August, and Gaikai was picked up in July by Sony. This leaves Nvidia in an enviable position with GRID being the only independent and viable cloud-gaming service available for Valve to license.

It's safe to assume that anyone interested in a Steam Box will have access to a broadband Internet connection, and consequently, the ability to access Nvidia's GRID. Steam has always relied on digital distribution, and that's not likely to change anytime soon. For detractors of the cloud, the problem is that once the Internet is down, the cloud and your games go with it. Understandably, this isn't ideal for most users, but if Valve is up front about the limitations of a cloud-based Steam Box, it has nothing to worry about, especially if the Steam Box is cheaper than current- and next-gen consoles from Sony and Microsoft.

For some users, the occasional lack of Internet access won't be an issue--again, thanks to Nvidia. When Nvidia showed off its new handheld at CES, Project Shield, one of its key features was the ability to stream games from a PC connected to the same Wi-Fi network. Unfortunately, it comes with strict requirements: a 600 series Nvidia GeForce GPU. Valve can't realistically rely on users to own separate products for base-level Steam Box functionality, but it's an attractive prospect for anyone who already owns a modern Nvidia GPU.

It's also an enticing opportunity for Nvidia from a business standpoint. Though PC gaming is moving toward the living room, desktop PCs aren't going away anytime soon. If Nvidia can leverage its tech as the best suited for Steam, it can hit the desktop and living room in one fell swoop. It could even package Steam Boxes and graphics cards together, giving Microsoft, Sony, and ATI some seriously formidable competition. Valve gets the tech it needs for a cloud-based Steam Box running Linux, and Nvidia gets a killer partnership with Valve, a brand synonymous with PC gaming.

This is all speculation, of course. There are still plenty of reasons to believe third-party manufacturers will be able to build non-Nvidia Steam Boxes while maintaining support from Valve. It's a lot like the Wu-Tang Clan: individual members were able to seek solo contracts outside of the group's record label, Loud, without jeopardizing that initial partnership. Valve may also deliver a traditional computer with dedicated hardware that will be both small and relatively affordable, but it's unlikely if Newell's commitment to Linux persists. As an OS, it's not a suitable fit in the short-term.

With the industry steadily moving toward a "games as a service" model, the duo of Nvidia's tech and Valve's Steam is almost too perfect to fail, giving the likes of OnLive and Sony's Gaikai a serious run for their money. Still, one question remains: What is Microsoft's answer?