> what problem do consumers have that Steam Machines solve?
It fixes a lot of issues for me (I will buy a steam machine upon release):
I used to prefer consoles for the living room - put the disk in, and go. But nowadays consoles have the same issues: Giant downloads, patches, tweaking GUI settings and fear of not getting the best performance (PS5 Pro variants, Xbox S/X etc., performance vs. quality mode settings). PC games are now not only more price competetive through the sales, but consoles use now downloads at high prices to undermine the second hand market, or account-lock your game even when purchased as disk. Plus, I need a subscription to play online.
Game controller support has become superb on ALL OSes (I use a PS5 controller on macOS as well as Linux, and it is pretty much flawless.
Windows is annoying. I used Windows 10 for a long time as a glorified bootloader into Steam (on a dualboot Linux machine), but it become full annoyances and win11 worsens that ("You need a Onedrive account" - "oh, did you try Edge yet?" - "Your computer is at risk" - "We installed copilot for you!" etc.). I basically want a computer that boots into steam BigPicture and is quiet the rest of the time.
Can I build my own living room PC? Yes, but then without proper SteamOS installation, or finicky linux setups. With the Steam Machine I just buy the package, put it next to my TV and lets go. I will re-use my PS5 dualshock controller and be done with it.
> But nowadays consoles have the same issues: Giant downloads
At least for PS5 the opposite is true: if a game uses kraken texture compression, and many do, PS5 variant will be the smallest.
How is that even an argument - the PS5 has had proper discs. The issue is, the disc content is 1GB file that requires a 50GB download.
In modern game development practice you will have to download patches anyway, so whatever there's on disk is irrelevant. Hardware has nothing to do with that.
Exactly that was my point. Consoles used to have a seamless "put in disc and lets go" experience, but they lost it and now are on par with PCs on that UX.