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You selected the issue: Desktop config doesn't work

Disabling Skypehost.exe has helped some users with this issue.

Troubleshooting:
Disable conflicting programs
Some third-party programs have been found to conflict with Steam Controller functionality. Try disabling these programs and restarting your computer.
  • Razer Synapse
  • XInput emulators
  • Screen capture software (Fraps, etc.)
  • Skype, Skypehost
  • MSI Afterburner
  • ASUS AI Suite
  • ZoneAlarm