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You selected the issue: System button doesn't light up

If you see no light but you can still play games, you can adjust your Steam Controller's light intensity from the Controller settings menu in Big Picture Mode.

Troubleshooting:
Remove batteries and connect with micro-USB cable
Remove the batteries and plug the Steam Controller into your computer's USB 2.0 port using the micro-USB cable.
If one USB port doesn't work, try a different one.
Replace the batteries
Unplug the Steam Controller and replace both batteries.