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The Steam Machine is actually a great prospect — we're just looking at it wrong
(www.xda-developers.com)
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Meh. The parts shortages that everyone is experiencing?
I think this is more a case of what do you consider "competition"? Rivian doesn't compete with Ford - and Valve doesn't compete with Microsoft/Sony who outsell Valve 20 to 1.
Perhaps the new Xbox is a signal that Microsoft is scared of Valve and Valve is on to something, but I dont think the Steam Machine needs to be competitive in price to the Xbox to be a success.
That's exactly what the article is suggesting they're doing though, and it certainly makes more sense to compete in that space than in the PC gaming market.
Not to mention there's speculation that this is why Sony are pulling out of the PC market. Because Steam Machine is aimed at living rooms, which is their domain. Obviously, no idea if there's any truth to that, but it's an interesting thought