As it says in the article, it'll be smaller and quieter, so less offensive for most people's living rooms than a full-size desktop. It's not meant to replace your existing PC if you have one, unless it was getting old and you were about to replace it anyway. If you don't have a PC, or don't have one in the living room, then it might be a better option than anyone else's prebuilt.

The biggest advantages it has over other PCs is CEC and Wake on USB(controller) enabled out of the box. Those are the two features I miss the most on my HTPC.

There are people who exist between "I build, format and otherwise manage my own gaming rig," and "I don't need a PC for games."

My partner is a perfect example. She has my old PC shell, with some $500 of GPU, internal memory, and accessories, hooked up to the TV. She uses it daily, almost exclusively for Steam games and streaming services that she finds more comfortable to navigate with a keyboard and mouse. A smaller, quieter, streamlined, "this more or less will do the things you want to do straight out of the box" product would have saved both her (and I, because that thing has had some troubleshooting) a lot of headache, while looking far more presentable to boot.

Maybe she's the odd one out and the target audience is more niche than my bias' recognize, but I guess we'll see for sure when this thing releases.

"on your machine" requires you to have a machine. This isn't for people with computers already. This is for people who are already looking for a new machine, and this becomes the "ready out of the box" option.

I mean, it's fine to do so, as long as you have PC hardware that meets your needs. Valve would be fine with it too. As long as it can run Steam, all good. For Valve, I expect that the Steam Machine is to provide an easy-to-set-up option a la consoles that let them move into the living room for people who have an issue with that. If you can already use/configure a PC and have one, then that option is gonna work too.

People without gaming rigs that don’t wanna spend almost as much for a console

That's a lot for someone who doesn't understand computers beyond Windows and MacOS. People also don't realise that since the PS4 and the Xbox One every console is just a X86-64 machine. So, I think it's a good move from Valve. Also it will be easier to manage and optimise for Valve if all their hardware is the same, a bit like Apple.

If its a decent price I'll want it. I love the freedom PC gaming allows but sometimes I do miss the convenience of a console. It would be great for my kid as well. No fidling with the display, having the PC not wake properly from sleep, controllers not connecting, etc. It would just work. Our current setup inevitably something doesnt work right first try.

People do occasionally buy new computers, and this one looks likely to be a better choice than most of what's on the market.

At least for me, a Steam Machine would be the ideal use case for my brother, since the literal ONLY game he plays is CS2. He used to play Fortnite, but he hasn't done that in years... and even then if he wanted we could just swap places between my current real computer and the Steam Machine. It's also really small so it wouldn't occupy much space on the other room of the house.