Gamers Nexus
Valve is financing the open-source Linux ecosystem as an existential hedge against Microsoft's pivot toward a walled-garden, cloud-tethered operating system that threatens independent storefronts.
AI-assisted summary of SteamOS, Linux, & Microsoft's Valve-Sized Problem, ft. Wendell of Level1 Techs — original source. Check the original for full context.
Source published:
Key ideas
- Valve treats SteamOS and its Linux investments as a critical defensive exit strategy against Microsoft's long-term push to convert Windows into a cloud-tethered, Azure-dependent walled garden. (0:00)
- Unlike corporate platforms governed by quarterly Wall Street demands, Valve's open-source contributions to Proton and the Linux kernel are locked under copyleft licensing, ensuring the code remains permanently forkable even if Valve pivots. (6:21)
- While Windows scheduling excels on Intel hybrid CPU architectures like the MSI Claw 8 AI Plus, its background operating system overhead causes noticeable frame time inconsistency on low-power handhelds compared to Linux. (27:46)
- Financial analysts noted that Microsoft's gaming division generated only about 50 cents of enterprise value per dollar invested, hampered by aggressive monetization choices such as forcing OneDrive integration for local game saves. (13:54)
Detailed notes
## Background Published by Gamers Nexus on YouTube on October 24, 2026, this video features host Steve Burke in conversation with Wendell of Level1 Techs. According to the show description, the discussion explores Valve's calculated exit strategy from Microsoft Windows, the development of SteamOS, whether Valve acts as a trustworthy steward of the Linux ecosystem, and why Windows represents an existential threat to Valve's business model.
## TL;DR Steve Burke and Wendell analyze Valve's sustained push into Linux and SteamOS as an existential defensive maneuver against Microsoft's erratic, cloud-tethered operating system strategy. Wendell explains that Valve safeguards the open-source community by quietly funding key developers under copyleft licensing rather than proprietary locks, contrasting Valve's focus on user value with Microsoft's history of value destruction across the Windows Store, Games for Windows Live, and aggressive telemetry. While acknowledging Valve's role in eroding physical ownership through digital licensing, both speakers note that SteamOS and Proton have forced the industry forward despite handheld scheduler hurdles and anti-cheat obstacles. Ultimately, Valve's patient engineering strategy exploits Microsoft's internal dysfunction and corporate complacency to build an independent gaming platform.
## Atmosphere & style The discussion carries the relaxed, candid atmosphere of a seasoned hardware salon, blending dry industry cynicism with technical expertise. Steve and Wendell share an easy, conversational rhythm peppered with dark corporate humor, riffing effortlessly from speeding-car metaphors and clandestine 'suitcases of cash' to lighthearted digressions about TempleOS. Beneath the sarcastic commentary on boardroom sociopathy lies a deeply informed, practical appreciation for open-source engineering and consumer rights.
## Bulletin - [00:00](https://www.youtube.com/watch?v=tfVVngHbb4s&t=0s) Valve treats SteamOS and its Linux investments as a critical defensive exit strategy against Microsoft's long-term push to convert Windows into a cloud-tethered, Azure-dependent walled garden. - [06:21](https://www.youtube.com/watch?v=tfVVngHbb4s&t=381s) Unlike corporate platforms governed by quarterly Wall Street demands, Valve's open-source contributions to Proton and the Linux kernel are locked under copyleft licensing, ensuring the code remains permanently forkable even if Valve pivots. - [27:46](https://www.youtube.com/watch?v=tfVVngHbb4s&t=1666s) While Windows scheduling excels on Intel hybrid CPU architectures like the MSI Claw 8 AI Plus, its background operating system overhead causes noticeable frame time inconsistency on low-power handhelds compared to Linux. - [13:54](https://www.youtube.com/watch?v=tfVVngHbb4s&t=834s) Financial analysts noted that Microsoft's gaming division generated only about 50 cents of enterprise value per dollar invested, hampered by aggressive monetization choices such as forcing OneDrive integration for local game saves.
## Key takeaways - [00:00](https://www.youtube.com/watch?v=tfVVngHbb4s&t=0s) Valve views its reliance on Windows like being a passenger in a car driven erratically by Microsoft, making SteamOS an essential exit ramp. - [04:03](https://www.youtube.com/watch?v=tfVVngHbb4s&t=243s) Providing seamless backwards compatibility expands hardware appeal and ecosystem value rather than merely cannibalizing digital remaster sales. - [06:21](https://www.youtube.com/watch?v=tfVVngHbb4s&t=381s) Trust in Valve's stewardship of Linux relies on copyleft open-source licensing rather than corporate benevolence, preventing contributions from ever being retroactively locked away. - [09:39](https://www.youtube.com/watch?v=tfVVngHbb4s&t=579s) Microsoft historically designed PC storefronts like Games for Windows Live and the Windows Store around corporate leverage rather than user utility, driving legitimate customers toward piracy. - [12:02](https://www.youtube.com/watch?v=tfVVngHbb4s&t=722s) Valve's Linux pivot serves as a long-term defense against Microsoft's eventual goal of turning Windows into an Azure-hosted cloud OS that gatekeeps software distribution. - [13:54](https://www.youtube.com/watch?v=tfVVngHbb4s&t=834s) Wall Street estimates indicated Microsoft earned roughly $0.50 of enterprise return for every $1.00 spent expanding its gaming division, driven down by user-hostile decisions like forced OneDrive save syncing. - [16:08](https://www.youtube.com/watch?v=tfVVngHbb4s&t=968s) Valve helped normalize the shift away from physical ownership to digital licensing, leaving game libraries vulnerable to server shutdowns and platform terms-of-service changes. - [18:50](https://www.youtube.com/watch?v=tfVVngHbb4s&t=1130s) Unlike closed console ecosystems where users have no alternatives, PC gaming preserves digital resilience through platforms like GOG that provide DRM-free standalone installers. - [21:15](https://www.youtube.com/watch?v=tfVVngHbb4s&t=1275s) Valve accelerates community Linux distributions like Bazzite and CachyOS by quietly funding developers and exerting market pressure on game publishers. - [24:53](https://www.youtube.com/watch?v=tfVVngHbb4s&t=1493s) Open-source development benefits from Valve's discreet financial support, which avoids the public drama and corporate backlash seen with executives like Tim Sweeney. - [27:46](https://www.youtube.com/watch?v=tfVVngHbb4s&t=1666s) Low-power PC handhelds running Windows suffer from erratic frame pacing, whereas SteamOS delivers significantly more consistent frame times under constrained TDPs. - [30:11](https://www.youtube.com/watch?v=tfVVngHbb4s&t=1811s) Windows scheduler tuning for Intel hybrid architectures outperforms Linux and SteamOS implementations on multi-cluster handheld chips like the MSI Claw 8 AI Plus. - [31:55](https://www.youtube.com/watch?v=tfVVngHbb4s&t=1915s) Linux gaming adoption continues to face severe friction from invasive kernel-level anti-cheat engines and inconsistent Nvidia driver support. - [33:58](https://www.youtube.com/watch?v=tfVVngHbb4s&t=2038s) Internal factions at Microsoft have actively sabotaged efficient tools like the winget package manager in order to force users into the telemetry-heavy Windows Store.
## Detailed walkthrough ### [00:00](https://www.youtube.com/watch?v=tfVVngHbb4s&t=0s) Don't Suck and Win
Steve Burke opens the discussion by noting how major platform holders often seem to work against their own user base, observing that Microsoft and Sony appear to have gone out of their way to deliver poor experiences to gamers. Wendell points to the scene surrounding jailbroken PlayStation consoles, which gained the ability to run PlayStation 2 games natively. Sony never needed to pour extensive R&D or engineering resources into backwards compatibility; they simply needed to refrain from locking users out of the hardware. Steve jokes in response, adopting the persona of a corporate executive pleading for empathy toward shareholders and cautioning that such open hardware access would never satisfy the investor class.
Turning to the core question, Steve asks Wendell why Valve invests so heavily in Linux and actively contributes to the open-source ecosystem. Wendell frames Valve's situation through an automotive metaphor: Valve is a passenger trapped inside a moving car where the driver is behaving erratically, screaming incoherently, and driving dangerously. Steve clarifies the metaphor, confirming that the vehicle is Microsoft Windows and the reckless driver is Microsoft itself. Jumping out of a speeding car on a highway is suicide, so Valve cannot simply bail without preparation; instead, SteamOS represents Valve’s carefully calculated exit strategy so they can safely "tuck and roll" onto an operating system they control.
```mermaid flowchart TD accTitle: Valve's Platform Exit Strategy accDescr: Diagram showing how Valve transitions away from Windows dependency toward Linux via SteamOS.
subgraph Risk["The Platform Risk"] MS["Microsoft (Driver)"] -->|"Erratic moves / Ecosystem control"| Win["Windows (Car in Motion)"] Win -->|"Trapped passenger"| Valve["Valve / Steam Storefront"] end
subgraph Solution["The Safe Exit Strategy"] Valve -->|"Funds & Develops"| Proton["Proton & Open-Source Contributions"] Proton -->|"Enables alternative runtime"| SOS["SteamOS (Linux Ecosystem)"] SOS -->|"Safe tuck-and-roll exit"| Independence["Independent Gaming Platform"] end ```
Steve questions whether Valve's push toward SteamOS stems from a genuine fear of becoming obsolete, drawing a direct comparison to GameStop. GameStop was built around physical disc distribution, and as platform holders like Sony phase out disc drives, retail stores face an existential threat unless they can fundamentally pivot. Because Steam remains primarily a digital storefront—despite its hardware ventures—Steve asks whether Valve harbors paranoia that Microsoft could cut off their access or replace Steam entirely. Wendell argues that Microsoft cannot easily supplant Valve because doing so would require an impossible philosophical shift: Microsoft would need to prioritize customer value over self-enrichment.
- Steve and Wendell contrast corporate hostility toward backwards compatibility with community-driven fixes like running PS2 software on jailbroken PS4/PS5 hardware. - Wendell sums up Valve's relationship with Windows: “The driver is Microsoft and the car is Windows.” - Wendell emphasizes why Microsoft struggles to match Steam's appeal: “They would have to want to deliver value to the customer in a way that doesn't unjustly enrich themselves.”
---
[04:03](https://www.youtube.com/watch?v=tfVVngHbb4s&t=243s) Valve Understands the Customer
The conversation shifts to Valve's corporate leadership, particularly co-founder and current CEO Gabe Newell. Wendell jokingly refers to Gabe Newell's wealth and maritime pursuits—referencing his yachts, a submarine, and teasing about his hunt for underwater alien bases. Beneath the jokes, Wendell highlights Newell’s long-standing consumer philosophy, especially the famous maxim that piracy is not fundamentally an issue of price, but rather an issue of convenience and service delivery.
Wendell and Steve contrast this mindset with the short-sighted logic often pushed by corporate boardrooms. The typical anti-consumer shareholder view assumes that enabling older discs to run on a modern PlayStation 5 prevents a publisher from reselling the same PS2 games as remastered digital downloads. In reality, offering seamless backwards compatibility makes the hardware significantly more desirable, lifting demand across the entire platform ecosystem. Steve mentions that while he still owns every retro console he has ever bought, the friction of setting up vintage video hardware and format converters on modern 4K televisions often stops him from playing them; a modern machine that effortlessly runs legacy software would immediately earn his purchase.
Wendell compares the console dilemma to the historic landscape of PC gaming before centralized, well-engineered launchers existed. In the pre-Steam era, players were entirely at the mercy of individual publishers to make older titles run on newer operating systems. A game built for Windows 2000 frequently refused to run on Windows XP—and as Wendell jokes, often barely ran on Windows 2000 either, while Windows ME was even worse. Steam transformed this dynamic by acting as an intermediary that could collect hard telemetry, proving to publishers with raw data that tens of thousands of players were actively attempting to launch an older title, thereby justifying an official patch or compatibility update.
- Gabe Newell's philosophy remains that piracy is solved by providing superior service and convenience rather than draconian restrictions. - Backwards compatibility acts as a hardware selling point that broadens the active user base rather than merely cannibalizing digital re-releases. - Older operating systems (Windows 95, Windows ME, Windows 2000, and Windows XP) routinely broke game compatibility, forcing early PC gamers to navigate manual DOS and DirectX workarounds before centralized platforms tracked compatibility metrics.
---
[06:21](https://www.youtube.com/watch?v=tfVVngHbb4s&t=381s) Is Valve Trustworthy as a Linux Steward?
Steve brings up the broader implications of Valve’s massive involvement with the open-source community. While Valve's work on Proton has yielded incredible results—even allowing games to outperform Windows on Linux distributions like Bazzite—Steve notes that tech enthusiasts are rightfully suspicious when a massive corporation inserts itself into open-source projects. He asks whether the broader Linux community implicitly trusts Valve to be a benevolent steward.
Wendell clarifies that the Linux community's security does not rest on trusting Valve's moral character, but on the legal guarantees of copyleft licensing. Unlike proprietary driver environments from Nvidia or binary blobs within AMDGPU where transparency is limited, Valve’s core contributions are upstreamed into open-source repositories and governed by open licenses. Wendell points out that Valve often identifies talented independent developers within the scene and backs them financially—metaphorically dropping off a suitcase of money and asking what resources they need to continue their work. Because the software and kernel patches developed under these initiatives carry standard open-source licenses, the code remains permanently accessible to the world. If Valve ever shifts corporate direction or abandons Linux, the ecosystem retains full legal ownership to fork and continue running the code indefinitely.
The conversation turns to the structural protections Valve enjoys by remaining a privately held company. Steve asks how the dynamic would change if Valve were publicly traded or owned by a conglomerate like Electronic Arts. Wendell responds that the moment a company of Valve’s scale answers to public equity or quarterly Wall Street demands, the focus irreversibly pivots from customer value to aggressive extraction of short-term profits. A publicly traded Valve would stop looking for ways to improve user experiences and would instead weaponize its monopoly to extract maximum capital from developers and players alike.
- Wendell explains that trust in Valve is structural rather than sentimental: “The trust is not implicit. The trust is enforcement in a license.” - Valve frequently funds key open-source developers quietly, letting them retain their independence while accelerating features that benefit Proton and SteamOS. - Contributions made directly to the Linux kernel and surrounding open-source tools cannot be revoked or retroactively closed off by Valve. - Wendell warns against the corrupting influence of public markets: “Any company that is as large and dominating as Valve, if it is taken over by public interest or private equity or anything else that is money focused, the impetus will definitely become how do we leverage what we have to extract more money.”
[09:39](https://www.youtube.com/watch?v=tfVVngHbb4s&t=579s) The Legacy of Domination: Microsoft's Failures from Xbox to the Windows Store
Wendell and Steve examine how platform holders leverage their market strength, comparing Valve’s commercial restraint to Microsoft’s historical ambition to monopolize PC gaming. Steve observes that Valve has cornered the market about as much as a company can without veering into outright sociopathy, though he concedes they do exhibit predatory tendencies, notably through loot crates and the normalization of in-game gambling. Wendell responds by pointing out that business analysts will likely look back at Microsoft's long-term missteps through that exact lens. Tracing Microsoft’s ambitions back to the original Pentium III-based Xbox, Wendell argues that Microsoft has consistently attempted to leverage its OS footprint to secure an unassailable chokehold over gaming. While Microsoft achieved certain technical innovations along the way, its moves were perpetually driven by an overarching corporate drive to dominate, control, and extract data.
```mermaid flowchart TD accTitle: Platform Stewardship vs Platform Control accDescr: Contrasting Valve's user-centric engineering strategy with Microsoft's top-down walled-garden strategy.
subgraph Valve ["Valve Strategy"] V1["User-Centric Engineering"] --> V2["Subsidize Ecosystem & Open Standards"] V2 --> V3["Earned Consumer Goodwill"] end
subgraph Microsoft ["Microsoft Strategy"] M1["Platform Leverage & Moats"] --> M2["Walled Garden: GFWL & Windows Store"] M2 --> M3["Catastrophic Friction & Developer Alienation"] end ```
The catastrophic failure of the Windows Store serves as the clearest modern illustration of this mindset. Wendell notes that the storefront was fundamentally broken because it prioritized corporate leverage over basic utility: “It was designed like as if because it's Windows, you have no choice. And you will endure.” Steve agrees wholeheartedly, recalling the misery of using the Windows Store for titles like the RTX implementation of *Minecraft*. For Steve, the storefront was indistinguishable from the reviled Games for Windows Live (GFWL) era. He shares a personal anecdote, noting that the only time he has ever pirated a PC game was when Games for Windows Live arbitrarily locked him out of a title he had legitimately purchased on disc because the service decided the disc looked suspicious. Wendell brings up a contemporary parallel where Game Pass PC versions of games lag behind Steam releases in patch frequency. Developers have had to publicly clarify that the delays are not their fault, but rather the result of Microsoft's convoluted certification pipelines—a bizarre breakdown for one of the world's largest software companies.
- The original Xbox was powered by a modified Intel Pentium III processor and served as Microsoft's initial wedge to capture the living room console market. - Games for Windows Live frequently broke basic consumer access, driving legitimate purchasers toward piracy just to bypass broken DRM verification checks. - Discrepancies between Steam and Microsoft Store/Game Pass game builds continue, with developers blaming Microsoft's cumbersome submission and patching infrastructure.
---
[12:02](https://www.youtube.com/watch?v=tfVVngHbb4s&t=722s) Valve’s Linux Pivot: An Existential Defensive Play Against the Cloud
Turning to Valve’s internal motivations, Steve asks what the company’s real business angle is with Linux. Setting aside idealistic notions of Valve simply wanting to be "good people," he asks whether their heavy investment in Linux and Proton is primarily defensive or proactive. Wendell contends that it is an existential defense against an unreliable partner. In Wendell’s view, Valve cannot trust Microsoft to act rationally or maintain an open gaming environment: “I think it's you can't trust Microsoft to do what is in their own best interest for business because they don't understand the problem that they're trying to solve.” If Microsoft could be trusted to reliably optimize performance, resolve operating system bugs, and support developers, Valve would have had little reason to spend millions bankrolling Linux compatibility.
Wendell points out that Gabe Newell’s skepticism toward Windows dates back to the Windows Vista era, when Newell recognized that Microsoft's leadership had lost touch with core PC gaming needs. That early realization proved remarkably prescient given Microsoft’s current trajectory toward shareholder-driven cloud computing. Microsoft’s ultimate endgame is turning Windows into an Azure-hosted cloud operating system where local computing power is reduced to a glorified thin client. Wendell highlights how enterprise software has already been captured: Microsoft Office, Active Directory, messaging, and exchange infrastructure are almost entirely tied to cloud dependencies, making local, self-hosted environments virtually impossible. Because a fully cloud-tethered, walled-garden Windows would give Microsoft total gatekeeping authority over application distribution, it poses an existential threat to Steam's revenue model, forcing Valve to build a viable alternative on Linux.
---
[13:54](https://www.youtube.com/watch?v=tfVVngHbb4s&t=834s) 50 Cents on the Dollar: Shareholder Value vs. Consumer Goodwill
Steve questions whether Microsoft's leadership in their "ivory tower" even perceives Valve’s Linux push as a threat, or if Microsoft might use its massive stable of first-party studios and hardware partnerships to exert pressure on the industry. Wendell responds by pointing to Wall Street's assessment of Microsoft's gaming division. Following high-profile executive departures, financial analysts highlighted that for every dollar Microsoft spent acquiring studios and subsidizing Game Pass, it only generated roughly fifty cents of actual enterprise value. Microsoft essentially bought its market share at a steep loss without actually building an enduring defensive moat or earning the goodwill of gamers.
Instead of improving the customer experience, Microsoft has continuously degraded it through aggressive cloud integration and monetization. Wendell points out the irritation of Windows forcing default User Document folders and game saves directly into OneDrive. Because free OneDrive storage limits are intentionally tiny, the operating system aggressively nags users to pay for cloud storage subscriptions just to store save data that should remain on a local drive. Steve jokes that Microsoft collects this save telemetry to build behavioral advertising profiles tracking player hours, prompting Wendell to remark, “That is the bill of goods that has been sold to shareholders for for them to tolerate 50 cents on the dollar for as long as it has been.” While Microsoft burns billions on strategies that backfire with core users, Valve follows the classic Napoleon maxim: never interrupt an enemy while they are making a mistake.
- Financial analysts calculated that Microsoft’s aggressive gaming expansion generated approximately $0.50 of enterprise return for every $1.00 of capital deployed. - Windows deeply integrates OneDrive into system directories like "Documents," automatically syncing local game saves until the storage threshold is exceeded, prompting users to buy cloud storage upgrades. - Valve's competitive posture against Microsoft has largely relied on maintaining a stable, user-first client while Microsoft damages its own standing through anti-consumer software design.
---
[16:08](https://www.youtube.com/watch?v=tfVVngHbb4s&t=968s) The Monopoly Dilemma and the Fragility of Digital Ownership
Steve cautions against putting Valve on an uncritical pedestal, asking whether the enthusiast community's affection for Steam is partially a symptom of Stockholm syndrome. When the rest of the tech industry acts with overt hostility toward users, bare-minimum competence and basic respect look like profound benevolence. Wendell draws a parallel to the platform antitrust battles between Apple and Epic Games over *Fortnite*. Platform holders continually debate whether to attract customers by offering genuine ecosystem value or simply trap them within a walled garden where they have no viable alternative.
Despite Valve’s strengths, Wendell underscores the profound long-term risk Valve introduced to modern gaming: dismantling the concept of physical ownership. By replacing physical media with licensed digital accounts, consumers are left entirely at the mercy of a single platform. Wendell stresses the vulnerability of this arrangement: “I think the worst thing that Valve has done in the industry as a whole is to change the mindset of of ownership.” If Gabe Newell were to sell the company, retire, or pass away, the terms of service could shift overnight, reducing entire game libraries to temporary rentals. Wendell cites the tragic fate of Gearbox's *Battleborn*—which was completely obliterated when its servers were shut down shortly after launch due to competition from Blizzard's original *Overwatch*—as proof that digital purchases can vanish without a trace. Steve humorously sympathizes, noting his own uncanny track record for passionately investing in games that run into development trouble, specifically naming *Cube World* and *Star Citizen*, the latter of which Gamers Nexus broke major investigative reporting on during its early development.
[18:50](https://www.youtube.com/watch?v=tfVVngHbb4s&t=1130s) Digital Ownership, GOG, and the Consoles
Steve reminisces about the early crowdfunding days of *Star Citizen*, recalling that he produced a playlist of twenty to thirty interviews with Chris Roberts and his team roughly ten years prior. Even back then, Steve felt Gamers Nexus was late to the coverage because Cloud Imperium Games had already passed its initial $800,000 threshold, whereas today they have accumulated around a billion dollars.
Wendell pivots from that crowdfunding scale back to the issue of digital game ownership, arguing that console manufacturers have pushed things to an egregious point. Sony explicitly tells users that they do not own anything. Wendell observes that Valve inadvertently helps prop up this corporate mindset, leaving digital purchases in a weird superposition where players act like owners, but legally hold only revocable licenses. Steve agrees with the phrasing, noting how console defenders often deflect criticism—such as pushback against physical disc drive removals on the PlayStation 5—by claiming PC gamers have accepted the exact same terms on Steam for decades.
```mermaid flowchart TD accTitle: PC Game Ownership vs Walled Garden Consoles accDescr: Diagram illustrating PC storefront and ownership flexibility compared to closed console ecosystems.
subgraph PC["PC Ecosystem (Open)"] Steam["Steam Store / Launcher"] GOG["GOG (Offline DRM-Free Installers)"] Alt["Direct / Publisher Launchers"] Piracy["Fallback (Piracy / Local Workarounds)"]
Steam <--> GOG Steam <--> Alt GOG -.-> Piracy end
subgraph Console["Console Ecosystem (Closed)"] SonyStore["PlayStation Store"] SonyHardware["PS5 Hardware Ecosystem"] SonyStore --> SonyHardware end ```
Steve points out the critical difference: on PC, players always have the fallback to pirate their games or move to a completely different digital storefront. If an alternative like Ubisoft Connect is the only option, it is miserable, but on PC, storefronts like GOG give players true control. Wendell explains that he deliberately repurchased games from CD Projekt Red on GOG—including *The Witcher* series and *Cyberpunk 2077*—purely on ideological grounds. Even though he already held Steam licenses and acknowledges not everyone can afford to buy double copies, he wanted to financially back real ownership. Steve does the exact same thing with classic titles on GOG because the platform ensures compatibility and provides a standalone `.exe` without requiring an account login to run.
- Sony increasingly pushes a strict licensing model where customers own zero rights to the software they buy. - Defenses comparing console digital lock-in to Steam ignore that PC users have alternative storefronts, standalone offline installers, and local file access. - GOG provides pure executable files (`.exe`) without mandatory clients or persistent online authentication.
[21:15](https://www.youtube.com/watch?v=tfVVngHbb4s&t=1275s) Is Valve a Problem for Microsoft?
Steve asks Wendell whether Valve's sustained engineering investments into SteamOS and Linux gaming—which also empower independent community distributions like Bazzite and CachyOS—are gathering enough momentum to pose a genuine threat to Microsoft's operating system dominance. Wendell answers that Valve is already a major problem for Microsoft. While the maintainers of distributions like Bazzite and CachyOS deserve the credit for the direct sweat and labor they put into their operating systems, Valve has acted as an immense catalyst. Valve greased wheels across the entire stack, from kernel contributions and Proton compatibility improvements to utilizing its market clout with publishers. As Wendell puts it:
> “Valve has helped grease as many wheels as possible up and down the stack. Not not just the kernel, but also things in Proton game compatibility behind the scenes with their 800 lb gorilla status leaning on publishers is like, 'You should support these nerds. These nerds have kind of a lot of money. Stop being—they're not all filthy pirates, right?'”
Wendell highlights Valve's efficiency compared to Microsoft's historical strategy. Microsoft had to spend vast sums of internal R&D funding proprietary standards like DirectX to build competitive moats—an initiative rooted in the Steve Ballmer era to ensure PC gaming remained locked to Windows and to defeat internal competition from MS-DOS. Valve, by contrast, does not need to fund every single dollar itself; it invests targeted capital into open-source projects while community developers handle substantial portions of the engineering.
Steve inquires about the eventual endgame: what percentage of the OS market could Valve capture over the coming years through SteamOS and general Linux adoption? Wendell believes that if Valve decides to maximize revenue, it will focus on building out a unified platform experience, treating operating system market share gains as secondary knock-on effects. By asking practical questions about user convenience—such as friction-free cloud saves and seamless storage—Valve naturally circumvents Microsoft's ecosystem. Steve highlights this with their own testing across custom hardware and Steam machines: moving a MicroSD card containing installed games from one Linux device to another works immediately with zero configuration, unlike the frustrating file-repointing and manual library reconfiguration required on Windows.
[24:53](https://www.youtube.com/watch?v=tfVVngHbb4s&t=1493s) Reverse Stolen Valor and Open-Source Eccentricity
Steve raises the social dynamics within open-source development, asking whether existing Linux developers feel any resentment or sense of "stolen valor" when a massive commercial entity like Valve sweeps in to reap praise from work built by volunteers over decades. Wendell explains that what actually happens behind the scenes is the exact opposite:
> “It's almost like a reverse stolen valor. Like they're propping up somebody and they're just like, 'Don't say anything. Don't say anything about the suitcases of money.' Like that first rule of suitcase money is don't talk about suitcase money.”
Valve quietly funnels financial backing to key open-source developers while staying out of the spotlight, which protects developers from public blowback and platform politics. Wendell contrasts this pragmatic support with figures like Epic Games' Tim Sweeney, whose aggressive anti-monopoly crusades and harsh critiques of open platforms often trigger online harassment. Steve remarks that Sweeney seems unhinged judging by his public social media posts. Wendell emphasizes that in open-source projects, anyone can inspect the commit logs and target maintainers, making corporate harassment toxic to individual hobbies or jobs:
> “If it sucks, then people won't use it, right? If it's crazy and it's like TempleOS and it's like this is obviously, you know, somebody doing something insane, you know, just let them just let them have let them do it. It's fine.”
This prompt sparks a humorous banter about Terry A. Davis's legendary operating system: - Steve jokingly asks Wendell: “Can you build me a TempleOS server?” - Wendell retorts that TempleOS lacks networking support, leading Steve to riff that an operating system incapable of acting as a server cannot truly be called a "Temple"—it is more like an "AltarOS." - Both acknowledge that while the creator was legitimately brilliant, open-source software inevitably contains raw human eccentricity. - Wendell notes that while massive corporations sanitize and whitewash personality through PR structures, grassroots engineering—much like the old-school Linus Torvalds era or unscripted interactions with enthusiast engineers at companies like AMD—retains real character and genuine passion.
[27:46](https://www.youtube.com/watch?v=tfVVngHbb4s&t=1666s) Wendell’s Experience with SteamOS and Handheld Hardware
Following up on how Linux development often exposes raw internal workings to users, Steve asks Wendell whether he has personally used SteamOS yet. Wendell confirms that he has been using it since the beginning, having secured an original launch-day Steam Deck. Beyond the default device, he has actively experimented with installing SteamOS across various third-party hardware platforms, finding it rewarding to cherry-pick upstream components and watch them filter back into Arch Linux or CachyOS.
Steve asks how SteamOS compares to other distributions Wendell frequents. Wendell reflects that the earlier iteration of SteamOS was hyper-focused on solving software problems for an extremely narrow hardware target—specifically the custom AMD APU inside the Steam Deck. Newer builds, particularly with the teased Steam Machine or "GabeCube" style hardware concepts, lean toward running on a wider variety of custom user rigs. Wendell notes that this broader ambition has been catalyzed by the explosive market of PC gaming handhelds that followed the Deck: the ASUS ROG Ally, Lenovo Legion Go, and MSI Claw lineup (including both the original Core Ultra model and newer iterations). Almost all of those competing handhelds shipped natively with Windows, which Wendell bluntly notes “has not gone well.” Steve agrees, pointing out that while the original ROG Ally achieved solid sales figures for ASUS, handhelds running Linux variants delivered a far superior user experience due to significantly better frame time consistency. On high-powered desktop rigs running Windows, brute-force hardware simply bulldozes through erratic frame times and background stutter; on a constrained, battery-limited handheld SoC, the operating system overhead becomes glaringly obvious.
```mermaid flowchart TD accTitle: Handheld Performance Comparison accDescr: Contrasting how heavy Windows overhead behaves on high-power desktops versus low-power handhelds compared to SteamOS.
subgraph Desktop ["High-Powered Desktops"] A["Beefy Hardware / Power"] --> B["Bulldozes Through OS Micro-Stutters & Animation Glitches"] end
subgraph Handheld ["Low-Power Handhelds (15W - 30W)"] C["Windows OS Overhead & Scheduling"] --> D["Visible Frame Pacing Issues & Erratic Frame Times"] E["SteamOS / Linux Ecosystem"] --> F["Superior Frame Consistency & Efficient Low-TDP Operation"] end ```
[30:11](https://www.youtube.com/watch?v=tfVVngHbb4s&t=1811s) Intel Hybrid Architecture and the Linux Scheduler Deficit
Wendell contrasts this dynamic with his detailed testing of the MSI Claw 8 AI Plus, which features an Intel hybrid CPU setup composed of two Performance cores, a cluster of Efficiency cores, and low-power E-cores. Wendell observes that games usually run entirely fine on the efficiency cores alone. During development, Intel and Microsoft worked closely together to refine the Windows thread scheduler specifically for this hybrid topology. While Wendell was initially skeptical of Microsoft’s willingness to listen to partners—noting that the 800-pound gorilla rarely yields to wish lists—he admits the final Windows implementation was surprisingly impressive. The CPU scheduler successfully pins game workloads to the efficient clusters, maximizing both performance and battery life.
In contrast, Wendell admits that the Linux and SteamOS equivalents for Intel’s hybrid architectures remain an unmitigated mess months later:
> “The CPU scheduler in that is actually kind of beautiful because the games really do run well on mostly the efficiency cores, and let me tell you, the Linux equivalent of that on Steam OS is still a hot mess 6 months later.” — Wendell
While Linux typically excels at getting a thread onto a P-core quickly, executing the task, and getting off, it lacks the specialized tuning Intel and Microsoft pulled off for handheld power profiles. The open-source Vulkan stack is gaining ground—with Intel seemingly allowing graphics engineers to moonlight on open-source driver work alongside enthusiastic community contributors—but regular power users trying to tweak kernel scheduling still lack the deep engineering knowledge of industry veterans like Tom Petersen.
[31:55](https://www.youtube.com/watch?v=tfVVngHbb4s&t=1915s) Hardware Gaps, Nvidia Friction, and Anti-Cheat Roadblocks
Steve highlights that despite Linux's impressive strides, significant limitations still plague the platform—particularly spotty Nvidia driver stability. He notes there are still frequent instances where an Nvidia card simply chokes when running titles under Linux, which explains why Valve exclusively opts for AMD silicon across its hardware deployments. Wendell recalls a notable experiment where he installed Steam and *Cyberpunk 2077* onto an enterprise Nvidia workstation (an Nvidia DGX Station / Spark platform). By using an x86 translation layer over its ARM architecture, he managed to get DLSS and full game binaries operational. While Nvidia personnel were privately uncomfortable with gaming on enterprise hardware, an Nvidia employee quietly posted a superior GitHub guide improving Wendell's method.
However, the real wall on Linux remains invasive anti-cheat engines: - Wendell managed to launch a competitive multiplayer title (such as *Warframe* or a similar title with aggressive anti-cheat) on the workstation ARM environment before the software recognized the unusual setup. - Two weeks later, game updates patched the workaround, flagging the system with an invalid configuration error. - Wendell expresses disbelief that developers expend development cycles blocking players from running legitimate titles on high-end niche hardware: “They added something to detect somebody playing on a $4,000 at the time. Come on, this is insane.” - Both agree that Valve's muscle is mandatory to push back against publisher policies: “So, we do need Valve leaning on people that are that level of sociopathic.”
[33:58](https://www.youtube.com/watch?v=tfVVngHbb4s&t=2038s) Microsoft's Insecurity, Winget Sabotage, and Wrap-Up
Steve transitions to the broader rivalry between Valve and Microsoft, noting that Microsoft must eventually recognize Valve and SteamOS as an existential threat to Windows' gaming hegemony. Wendell asserts that Microsoft has recognized this threat ever since the Windows Vista era, but their execution has been completely paralyzed:
> “They do feel threatened. They have just been completely impotent to respond to it, right?” — Wendell
To illustrate how dysfunctional Microsoft’s internal structure has become, Wendell points to the development of the Windows Package Manager (winget). Although winget is an exceptionally convenient command-line tool for installing software, internal factions within Microsoft have actively undermined it. Product managers prioritize routing users through the graphical Windows Store to capture telemetry and browse-funnel analytics over providing a superior, lean command-line utility. Wendell condemns this corporate philosophy:
> “It's like, ‘I don't want to make the operating system better. I want to inflict these types of horrors on the user to gently encourage them to do the behavior that I want them to do.’ And that is exactly the person you need not in charge of your operations.” — Wendell
Steve notes that this dynamic perfectly embodies Wendell’s term for short-sighted, corporate sociopathy. Steve concludes the recording, reminding viewers that they recorded a companion Linux news roundup over on the Level1Linux channel, and encourages viewers to check it out and subscribe.
## Notable quotes > [16:08](https://www.youtube.com/watch?v=tfVVngHbb4s&t=968s) I think the worst thing that Valve has done in the industry as a whole is to change the mindset of of ownership. — Wendell
> [06:21](https://www.youtube.com/watch?v=tfVVngHbb4s&t=381s) The trust is not implicit. The trust is enforcement in a license. — Wendell
> [06:21](https://www.youtube.com/watch?v=tfVVngHbb4s&t=381s) Any company that is as large and dominating as Valve, if it is taken over by public interest or private equity or anything else that is money focused, the impetus will definitely become how do we leverage what we have to extract more money. — Wendell
> [12:02](https://www.youtube.com/watch?v=tfVVngHbb4s&t=722s) I think it's you can't trust Microsoft to do what is in their own best interest for business because they don't understand the problem that they're trying to solve. — Wendell
## Mentioned Steve Burke, Wendell, Gabe Newell, Chris Roberts, Tim Sweeney, Terry A. Davis, Tom Petersen, Valve, Microsoft, Sony, Electronic Arts, CD Projekt Red, Gearbox Software, Blizzard Entertainment, Epic Games, ASUS, Lenovo, MSI, Intel, AMD, Nvidia, GameStop, Steam, SteamOS, Steam Deck, Proton, Windows, Windows Vista, Windows XP, Windows 2000, Windows ME, Windows 95, MS-DOS, DirectX, Games for Windows Live, Microsoft Store, Xbox Game Pass, OneDrive, Azure, Windows Package Manager, GOG, Ubisoft Connect, PlayStation 2, PlayStation 4, PlayStation 5, Bazzite, CachyOS, Arch Linux, TempleOS, ASUS ROG Ally, Lenovo Legion Go, MSI Claw, MSI Claw 8 AI Plus, Minecraft, Fortnite, Battleborn, Overwatch, The Witcher, Cyberpunk 2077, Star Citizen, Cube World, Warframe
## Video description SUPPORT US! Get a Microslop T-Shirt! https://store.gamersnexus.net/products/microslop-parody-t-shirt This is just a fun discussion with Wendell of Level1 Techs to talk about Valve's exit plan from Microsoft Windows, SteamOS' development, and whether Valve is a trustworthy steward of Linux. We also talk about why Windows may be an "existential risk" to Valve's business model, the impact of publishers on retailers like GameStop (and Valve), and more. Mostly, this is just supposed to be a fun discussion and asking about Valve's contributions as viewed by the Linux ecosystem and maintainers.
Find Level1 Techs here: https://www.youtube.com/c/Level1Techs And our recent appearance on Level1 Linux: https://www.youtube.com/watch?v=qRFG7pL-ADw
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TIMESTAMPS
00:00 - Don't Suck and Win 04:03 - Valve Understands the Customer 06:21 - Is Valve Trustworthy as a Linux Steward? 12:02 - What Else is in it for Valve? 13:54 - Does Microsoft Care About SteamOS? 21:15 - Is Valve a Problem for Microsoft? 24:53 - Is Stolen Valor a Concern with Valve? 27:57 - Has Wendell Used SteamOS yet? 33:58 - Conclusion
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Steve Burke: Host Wendell: Guest Vitalii Makhnovets: Camera Tim Phetdara: Editing
[Source](https://www.youtube.com/watch?v=tfVVngHbb4s)