[1] https://www.zdnet.com/article/valve-ceo-why-linux-is-the-fut...
[2] https://en.wikipedia.org/wiki/Steam_Machine_(hardware_platfo...
Steam machines didn't take off because there were no games for it [1], the price point for the pre-builds was too high [2], nobody wanted to buy another (inferior) PC just for gaming [3] and the Steam Controller that was billed as part of the package was an experimental concept rather than being something people could pick up and play [4].
All of these kind of made sense at the time, but kind of felt like they had the signature Valve over-engineering. They have learned from this and have done the following:
For [1]: Proton
In 2018 in on fell swoop, Valve brought thousands of Windows games to Linux. Basically everything other than Multiplayer games with EAC or Battleeye work now (and EAC has a Linux version for native games).
From this point on I'd say that even though Linux still isn't 'the future of gaming', it's definitely a contemporary option. There are limitations, but it's viable.
For [2]: Scrap steam machines
It was a good effort, but I don't think Steam Machines will happen unless they can go toe to toe with the consoles. They don't need to, though, because people who want to run Linux are happy installing it on kit they already have.
For [3]: Steam Link
They released Steam link at the time, but now there isn't the competition of Steam Machine vs. Steam link - you can just run your Linux desktop and stream to your TV or to a raspberry pi.
For 4: Controller support with Steam Play
Steam play now has exceptional APIs which make it easy to play with any controller. I do think they need to release a Steam branded 'boring' xbox style controller, but I think they'd wait until another Steam OS version before then.
They've also invested massively in surrounding tech such as KWin, DXVK and a bunch of others. Linux may not be the 'future' of gaming, but it's definitely going to be a valuable safety net if Windows or the Consoles go rogue.
I'm not so sure about this. I have the Steam Controller and, while I'm aware it is an experiment, it's a completely functional controller and in many ways significantly better than any other I've ever used, especially for MMOs. The biggest problem, imo, is that people simply refused to give it a try because it's something new.
The touchpads, gyro, and back paddles make it so much better than any other controller. It’s a shame they discontinued it. The more mainstream reviews of the controller by tech news sites and Linus Tech Tips didn’t quite grasp its potential, which is understandable. But there are some solid niche YouTubers like RambleTan and Critical Input that have made entire channels out of exploring its potential, and the subreddit is pretty good too.
I think if Valve built out their game streaming tech (stream from your PC in the background or stream from our cloud), offered a gamepass-like subscription, and make proton work for 100% of their games and tested all of them for compatibility, they would have the best offering. From the sales, usability, features, and catalog they'd be able to be competitive. With what Microsoft is doing, in a few years steam will be in a very bad spot.
They would need to follow some of the lessons of the other consoles though:
1. They need to have a standardized base implementation against which developers can test, and be confident enough to say systems that at least meet that base configuration will playable.
2. They need to manufacture or have someone manufacture a version that's as easy (or easier) to setup and use as game console.
It's stupidly amazing how outdated views from 15 years ago poison people's opinions to this day.
The fact that it uses the Linux kernel is completely irrelevant to userspace.
In what concerns Crostini, it even uses another Linux kernel running on top of a container.