There have been three bits of news from GDC so far that paint a better picture of how Smart TV will disrupt the AAA game industry in the living room. Once again, Valve is ahead of everybody else in their thinking:

1. Iwata’s Keynote was about a crisis for Game Developers. My Translation: Nintendo is the one in crisis. Everybody on Facebook and iOS is doing just fine. Yet, Nintendo can’t follow up the blue ocean strategy of the Wii with another Wii – it’s a red ocean now with Kinect, Move on the motion control side and lots of new competitors (Smart TV, cloud gaming, iOS) coming on the cheap disruptive side. Still, they clearly recognize the problem and that’s the first step towards finding a way to make a Nintendo machine part of the future living room.
2. Google recognizes the fact that control and therefore UX is a big problem in the living room. Well Done! Then, they point to tablet and smartphone touchscreens as the solution. Oops! As I mentioned in the bigger article, touchscreens lack tactile feedback, and so they can’t be eyes-off controllers. I don’t think people want to give up on-the-big-screen UI’s and spend all of their time looking down instead of actually watching a show while they surf for something else. Plus, the larger market of apps (as a device selling point) is only enabled by a controller that can navigate on the big screen. Despite being first to market with the most fully featured Smart TV platform, Google is leaving the door open for somebody else to build the great controller experience. This puts Microsoft in a great position. A “Kinect TV” product (cheap, focused on great TV UX and an open app market) could be huge. That is, if Microsoft can bring themselves to put up an open app store.
3. With my favorite bit of news, Valve announced “Big Screen Mode” for Steam, which makes my longshot scenario of a Steam-enabled Boxee 2 much less of a longshot. Big Screen Mode also features a controller-enabled UI. Very soon you’ll be able to hook a cheap PC up to your TV, buy Modern Warfare 2 for less than it costs on any console and play nearly the exact same experience. Steam has more disruptive potential than anybody is giving them credit for. Already, Super Meat Boy, a game designed for controllers, sold more on Steam than Xbox Live Arcade. I tweeted Boxee telling them to hook up with Steam, so we’ll see if they can recognize their leverage to crush Google, Apple and Microsoft, and dominate the living room.