The trackpads included haptic feedback; Chris Kohler of Wired described using the controller while playing Civilization V at a Valve press event, noting that as he used the trackpad to move the mouse cursor, the electromagnets within the controller created audio and tactile feedback as if he were using a trackball.

The Steamworks API allowed for developers to provide more detailed settings for the Steam Controller when in Big Picture mode.

The touchscreen would have acted like a mousepad and allowed players to perform actions that typically are not capable on controllers, such as operating directly with Steam or SteamOS, and overlaying the touchscreen display onto the players' screens to allow manipulation of the game without diverting attention from the screen.

Early versions of the controller design included a trackball embedded in the controller to simulate mouse functionality, but opted eventually for trackpads to give more customization functionality to developers including the ability to simulate the motion of trackball by tracking a finger's motion on the trackpad.

Valve has added improvements to the controller's capabilities based on public feedback following its launch, including movement and aiming controls schemes using its internal gyroscope, the ability to trigger actions that enable cursor movements limited to certain regions on a UI (such as to manipulate a game's mini-map), a quick-access popup of 16 commands that can act similar to the hotkeys for keyboard-and-mouse games, cloud-based controller configuration saving, and support for non-Steam games that otherwise can be played through the Steam Overlay.

These so called 'Activators' can also be used to simulate the constant holding of a button with a single press, such that as is often used for the action of crouching in many first-person or third-person shooters.

[16][17][18] On March 23, 2016, Valve announced it would be publicly releasing computer aided design geometry for the Steam controller.

[27] Valve announced in November 2019, that it had discontinued further production of the controller and sold off its remaining inventory at a significantly reduced price.