Valve Is About To Beat Microsoft In Another PC Gaming War

Valve’s handheld device, the Steam Deck, wasn’t the first portable gaming PC ever created, but it is by the far the most successful. And like Steam becoming the de facto way people play PC games in 2025, SteamOS will soon be the most popular way to play PC titles on the go, which is not great for Microsoft.

The Steam Deck launched in February 2022 and within months, it had changed the landscape of the video game industry and popularized the idea of handheld, portable gaming PCs. But the Steam Deck wasn’t powered by Windows as most gaming PCs are these days. Instead, it was powered by SteamOS, a Linux-based, gaming-focused operating system that made it easier than ever to buy, install, and play almost any PC game on the portable device. And it’s SteamOS—and Valve’s dedication to making a gaming-focused OS—that made the Steam Deck a big hit.

SteamOS is the reason the Steam Deck is popular

Companies had tried to do handheld gaming PCs (not laptops) before Valve. One example would be the GPD Win, which featured a full keyboard and built-in Xbox controls. It could play games, but it ran on Windows, and felt clunky and slow. Other Windows- or Linux-based handheld PC were similarly clunky, hard to use, and often expensive.

The Steam Deck succeeded because it’s dead simple and easy to use, thanks to SteamOS and its compatibility features. Nearly any Steam game you already own, besides VR stuff, can work on the Steam Deck. And, in most cases, you won’t have to do much of anything to get it running. You use the easy-to-navigate menus of SteamOS to select a game, install it, and hit play. That’s it.

In the years since Valve released the Steam Deck and its slick operating system, other companies like Lenovo and ROG have released Steam-Deck-like competitors. And while many of these devices are more powerful than the Steam Deck, none of them include SteamOS, instead running on Windows 11. As a result, these devices are harder to use and clunkier. And sure, the companies behind them have tried to add their own software to make things easier, but it’s never quite as simple as the Steam Deck It’s that simplicity that allowed a lot of people who didn’t consider themselves PC gamers to buy a Steam Deck and enjoy it anyway as a straightforward, console-like experience.

Microsoft let Valve create and then dominate the market

During all of this, Microsoft had a chance to potentially step in and offer a lightweight, easy-to-use version of Windows 11 that portable PC makers could slap onto their devices. But the parent company of Xbox never did.

Now, in 2025, Valve is ready to make it easier than ever to install SteamOS on more devices. Not only that, but now Lenovo has announced the first third-party device that will ship with SteamOS. I expect by 2026 all handheld makers will offer SteamOS versions of their existing devices; likely at a cheaper price, too.

Sure, now Microsoft is talking more openly about a portable, Xbox-like device and changes to Windows 11 that will make it a more handheld-friendly experience. But it really feels like Microsoft dragged its feet for too long and is now trying to play catch up. And I just don’t think it will be able to offer a version of Windows 11 that will be better than SteamOS anytime soon.

In the meantime, Valve is soon going to let any company use its gaming OS as the backbone of future devices, and let users install SteamOS on any portable PC they own.

This is likely to lead to a situation in which SteamOS is just considered the default way to play games on a portable PC, similar to how Steam is vastly more popular than Microsoft’s built-in Microsoft/Xbox/whatever app store that comes pre-installed on all Windows devices. And if SteamOS makes its way onto TV-based console-like devices or desktops, I think it will find a lot of success there too. A lot of people want to just play games, surf the web, and maybe listen to some music on their PC, and SteamOS can accommodate all of that easily.

Microsoft had a chance to compete with Valve in the handheld gaming space. Instead, it just…didn’t. Microsoft will likely never be able to dethrone SteamOS as the most popular way to play PC games on the go, especially if Valve keeps updating it to be better, faster, and easier to use.

Sure, Microsoft won’t go bankrupt anytime soon, but Xbox had a chance to dominate a corner of the gaming market and possibly expand its reach on desktop PCs, too. But time has seemingly run out for that to happen, and Valve has won again.

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