The next Xbox doesn't seem to be coming from Xbox at all

The CEO of Xbox recently said in an interview that the company's replacement for the Xbox Series X will be a premium PC/console hybrid – but it seems to have been beaten to the punch.

Valve has announced exactly that – a Steam PC in a console form factor. And it even looks like a shrunken Series X.

The all-new Steam Machine is the brand's second stab at a home console, but the timing seems to be so much better this time around. It originally partnered with several manufacturers to release living room-friendly PCs a decade ago, but the Steam Big Picture Mode experience wasn't as intuitive as SteamOS, and they still felt more like a desktop PC in operation than a console.

Valve has this time been buoyed by the success of the Steam Deck and so is having another run. And it might just work.

The new Steam Machine is a Linux-based PC at heart, running on a semi-custom AMD Zen 4 CPU and with AMD RDNA 3 graphics. There will be 16GB of DDR5 RAM.

It is capable of up to 4K 120Hz gaming, but considering the specs, it will likely best run games around the 60fps mark – ideal for most living room scenarios.

Models with both 512GB and 2TB of storage will be available, with the internal SSD also able to be swapped out easily. A microSD card slot also allows for further expansion.

HDR and FreeSync will be on board, with output options including HDMI 2.0 and DisplayPort 1.4 – so it'll work as well on a desktop with a monitor as under your TV.

A new Steam Controller

In addition to the Steam Machine, a new version of the Steam Controller will be available too (as leaked yesterday).

There are some similarities to the 2015 version, including two touch panels for mouse-like gaming, but it is more conventional in many other ways. There are two thumbsticks this time, for starters. And the D-pad is in the traditional format.

It's all pretty chunky, so it'll be interesting to see how it feels, but considering I liked the original Steam Controller (yes, I was one of the few), I think this could give us the best of both worlds.

I'm also thrilled that Valve has opted for TMR thumbsticks. This technology is a step up from Hall Effect and provides the most responsive actions available today. It's also impervious to stick drift.

There are four haptic motors in the controller too, including in the grips.

Talking on Meta Quest 3 for VR gaming – meet the Steam Frame

The final product announced by Valve is the Steam Frame VR headset. A standalone device, much like the Meta Quest 3, it is capable of playing Steam games thanks to built-in Steam OS.

But the most intriguing element to the headset is that it will utilise streaming technology to play games over the cloud, as well as stored on its built-in storage. This allows for much higher graphical rendering, thanks to running on remote servers, yet without lag or latency.

Foveated Streaming tech will also work with eye-tracking to present the best resolution where you are directly looking (much like on the PSVR2), and that allows for resources to ramp up the performance where needed, yet be more efficient.

The Steam Frame offers a resolution of 2160 x 2160 per eye and a refresh rate of up to 144Hz. It runs on a Snapdragon 8 Gen 3 chipset with 16GB of RAM, and speakers are built into the headset itself so you don't technically need headphones.

Sadly, we don't have prices or release dates for any of Valve's new hardware options as yet – just "2026". We'll keep you update as and when we find out more.