Until we get 1TB SSD’s for less than $1000, space on them is always at a premium. One strategy is to split your Steam game installs between drives. For slow loading or games you play often, you might want those on your SSD. For infrequently played games, you likely want those on a big, cheap platter drive. Steam gives you the ability to have multiple libraries on multiple drives, but it doesn’t always work as expected.
I tried recently to add a library to a big platter drive, and got the message
'Failed to add new steam library to folder'. I tried all kinds of ways of creating the library, but always got the same message. My drive was not out of space, I had adequate permissions. I started/restarted steam. No luck.
Failed to add new steam library to folder
The issue is that the Steam client cannot add new libraries while anything is happening to the existing game library. In my case, one single game (way off the bottom of the screen!) was updating. This activity prevents the Steam client from being able to add a new library folder.
Pause or cancel the download/update. Make sure nothing is updating, then go to the Library display view in the Steam client. Then select: Steam->Settings->Steam Libraries Folders->Add Library Folder. You should then be able to select/create new library folders on new drives.
Valve engineers – fix that dialog! Be sure to tell people WHY you can’t create the folder, not just that you can’t. Error messages are useless unless they give you enough information about what’s wrong so that you can fix the problem. Especially one so simple to report.