Surely the Steam Machine is in a newer generation than the PS5?
The PS5 is already about five years old, has had a slim release and a PS5 Pro. The PS6 announcement is probably a year away, with a 2027 or 2028 release.
Valve is launching a last-gen console, probably at a price that won't be competitive, right before the PS6 comes out.
Where does that leave e.g. Nintendo Wii, which is generally considered to be the same generation as the Xbox 360 or PS3, despite having not nearly the performance.