Valve now has its own operating system. SteamOS is based on Linux and designed for the living room, and you'll be able to download it soon.
Valve doesn't say exactly when the free download will pop up online—it knows better than to set firm deadlines—but the company does indicate that the OS will be free to license. System vendors should be able to build SteamOS machines without shelling out for the OS, and Valve hopes the openness of the platform will encourage the hardware industry to "iterate in the living room at a much faster pace than they've been able to."
SteamOS will incorporate Valve's content delivery system, of course. It will also include music, TV, and movie services. Valve is "working with many of the media services you know and love," and it will bring them to both Steam and SteamOS.
What about games? The selection of native Linux games is pretty limited right now, but Valve says we'll see AAA titles with native SteamOS support next year. Unfortunately, it doesn't specify whether those games are being developed in house or by third-party studios. We can look forward to related announcements "in the coming weeks." Let the Half-Life 3 speculation begin.
The neatest thing about SteamOS may be the fact that it doesn't necessarily need native Linux titles. The OS is capable of streaming games from network-attached PCs running Windows and OS X. Valve doesn't detail hardware requirements for streaming, which hopefully means there are no vendor-specific limitations attached.
Image quality and latency are always a concern with streaming solutions, but home networks should have sufficient bandwidth for a good experience. Native SteamOS games will probably offer the best experience, though. Valve says it has "achieved significant performance increases in graphics processing" and is "now targeting audio performance and reductions in input latency at the operating system level." Those enhancements should appeal to developers and gamers alike, and the latency reductions could help SteamOS become a new standard for competitive gaming.
The next reveal in Valve's three-part Steam expansion is scheduled for Wednesday morning at 10 AM PT. We await it with bated breath.
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