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Slownenberg said:

This is not supposed to compete against consoles, so $800 is not a nail in the coffin. It's supposed to compete against budget gaming computers. Just like Steam Deck wasn't supposed to compete against Switch, it was supposed to be a budget somewhat portable gaming PC. And just like Steam Deck this is a niche device that'll sell millions, not tens of millions like consoles sell.

Walmart has an RTX 5060 prebuilts for $799. Significantly more powerful than the steam machine. 

If building your own you can get a 9060 XT 16GB build from around $800, which is basically double the power.

You can get an RTX 5060 Laptop for about $900... Again more powerful than the Steam Machine.

$800 is just not a competitive price with anything... maybe they could get away with it for the 2TB model. $699 for 512gb and $799 for 2TB, but even then I'd expect it to sell significantly less than the steam deck.