Full Steam ahead for Valve as Microsoft surfaces new tablets

And the budget end of the tablet market is getting hotter

Surface 2  SteamOS and a ton of new tablets

It's safe to say that Windows RT hasn't been Microsoft's biggest success: the armies of third-party RT tablets never appeared, and even Microsoft's staunch ally Dell appears to be getting out of the RT game.

But Microsoft ain't no quitter, and if the OEMs won't step up then it will - so this week, Microsoft unveiled the second generation of its very own Surface.

Surface RT lives on at a discounted price of $349, but the interesting tablets are the new Surface Pro 2 and the Surface 2. The former is a screamer aimed squarely at pros, and the latter is a more powerful version of the Surface RT with a much better screen and some more horsepower.

Kevin Lee has the review: "It might not have the specs to compete with flagships like the iPad 4 and Nexus 10, but Microsoft certainly has given the Surface 2 a better fighting chance than the RT ever had."

It's better, but is it good enough? Our columnist Gary Marshall isn't convinced.

The Surface RT's problems weren't the specs: "It was far too expensive. It was marketed to consumers but didn't have the apps they wanted... and it was hobbled by odd decisions such as limiting its business-friendly potential".

With Surface 2 "Microsoft has taken something that was arguably incompetent and refined it until it's reached the heady heights of adequacy." Is that enough?

Losing to lead

The Surface 2 is clearly pitched as an iPad rival, but the real action in tablets is currently happening on a smaller scale: the march of the minis continued this week with new arrivals from Amazon and Tesco.

Amazon has given its Kindle Fire a revamp and added the new Kindle Fire HDX with new features including near-instant online video help. The screens are Amazon's best yet and the prices are so low Amazon can't possibly be making any money from them - but Amazon doesn't care, because it intends to make its profit from selling content.

Surface 2  SteamOS and a ton of new tablets
Tesco hopes you'll get cosy with its new Hudl tablet

That's a strategy Tesco appears to be adopting, says Marshall. The new Hudl tablet is hardly a cutting-edge device, but what's important is the strategy, which he can't help but call "every Hudl helps": "every Hudl is a Trojan Horse bearing Blinkbox and Clubcard TV and Tesco Bank and of course, shopping. It's a classic loss leader, Tesco taking a hit on the tablets and making it back from selling you other things."

Could Microsoft have something similar in development? We've heard rumours of a small Surface for months now, but it's still some months away. While a Surface mini appears to be in development, there's no sign of a release date yet.

Pressure on Microsoft

Surface 2  SteamOS and a ton of new tablets
Valve's SteamOS aims to put the squeeze on Microsoft

Microsoft has always had competitors, of course, but of late it seems that it's fighting a war on multiple fronts - and the latest firm to take on the Windows PC is Valve, whose name is synonymous with PC gaming.

Not any more. This week Valve announced SteamOS, which brings the Steam games platform to anyone who wants it. It's a standalone operating system based on Linux, and Valve says it'll run on "any living room machine."

Those machines include Valve's own Steam Boxes, although it's currently not obvious whether it'll build them or just set the spec for others to assemble.

As Alex Roth explains, the plan is clear: "Give PC gaming the ease and accessibility that console jockeys already enjoy, and do so in a way that lets OEMs make the hardware and compete. And put Steam right at the centre of it, ready to vacuum up the cash like it's the Steam summer sale all year long." Prototypes will ship later this year.

That's not all Valve has up its sleeve: it'll make a third Steam-related announcement on Friday afternoon.

Half-Life 3 fans are crossing everything that can conceivably be crossed in the hope of a Half-Life 3 reveal, but multiple sources suggest it'll be a new controller instead. Could this be the biometric controller Valve's Gabe Newell mentioned back in January? Only a few more hours until we find out.