It certainly would have a negative effect on Valve to use a valuable IP to promote a platform where they make no money to give up money on software sales where they make all of they money. Unless there goal was to create a proprietary platform where they did make some money which is what they say they aren't interested in.
Really heatle if MS continues to push windows S.... I would bet money Valve will start rolling out Linux timed exclusives if not full on exclusives.
At this point it looks like a real possibility that MS would like very much to move to a model where Windows S ships on the vast majority of new PCs... with them either selling upgrades to real capable of running steam windows directly or through a sub. They have already started doing it on their own hardware. They have already started moving their "non-pro" windows clients over to windows subscription plans.
If in 2-3 years from now the industry is shipping 50+% of new PCs with windows s. I think you will start seeing Steam OS exclusives from Valve without a doubt... and I wouldn't put it past them to start paying developers that have had long standing relation$hip$ with valve to perhaps even do the same. If I am putting out a major AAA game on both consoles windows and Linux... accept the vast majority of windows PC users can only purchase my game from the MS store in Windows S, where I am paying a higher royalty then I was to Steam. I may consider releasing on Console and Linux for 3-4 months before putting my product in the windows store where I pay higher royalties.... the people that aren't willing to buy it for their console or Linux can wait.
You over estimate MS position... as I believe they do. I am pretty sure they backed off on a play to kill valve once before, when it became clear Valve may have the war chest to actually fight back (and MS was already burning money trying to fight Sony). The steam machine hit right in the middle of the high point cost wise for MS in their Sony console battle. It seems MS just took a longer road to get to the same place now... the only real question is has Valve been smart enough to stock pile the profits they have been making to fight for their kingdom.
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