Microsoft boss Phil Harrison says it will be hard for the likes of Steam and Nvidia to launch mass-market games consoles.
Both firms have announced plans for PC-based consoles in the home, including the new ‘Piston' and ‘Shield' devices.
But Harrison says it can take thousands of pounds and ‘very deep pockets' if these consoles are to compete with the likes of Xbox, PlayStation and Wii.
He said: CES is always very interesting. But entering the hardware business is a hard thing to do. You need to have deep pockets. Hardware can be successful but it's rare to get new hardware to scale. I'm talking tens or hundreds of millions.
It's about having a supply chain and a distribution model, it takes thousands of people to make a reality.”