I agree it'll require aggressive pricing, and I'm also sure they know this. I think most of the predictions of price are too high. I won't be surprised if this is sold at a loss. Valve makes their money off the marketplace, not selling hardware. If they can move console players into their market, that'll provide huge returns.
Consoles used to be sold at a loss. They don't now because they don't directly compete really. Either people get both or they choose based on brand loyalty or peer pressure. I hope Valve comes in and has a price so low you can't ignore it if you're looking to buy a console. The Xbox Series S is $400. I'm expecting it'll be the same at most, potentially even lower if it's sold at a loss. If it's $300 then they'll shake up the market without a doubt.