The PS5 can only play games that you pay Sony a tax to play. The steam machine can play any game, including those bought outside Steam and thus without paying valve a tax.

This means the PS5 is subsidised, whereas Valve hardware does not tend to be. They have confirmed that internally all divisions must be roughly profitable/break-even.

While you are technically correct, 99% of all games that are going to be played on this device are going to come from steam where they take a 30% cut.

I don't know how much money they make from each unit but major profit is not the goal here. They want to sell more games to more casual people who don't even own a PC anymore.