As a Steam Deck owner since pre-orders, unless the price is extremely high, I am going to get the Steam Machine as well. Kids plug the Steam Deck to TV to do couch co-op gaming even though the resolution is only 720p. So getting a better resolution and performance while still getting access to the huge Steam library and non-steam games (Minecraft, etc.) is worth it. I don't care about the latest AAA titles and FPS shooters, for those I already have a desktop PC.

PS5 is too expensive long term and is not usable for anything else. And when Steam Machine becomes obsolete, I'll probably just use it/gift it as a mini pc/home-server to someone in the family.