I don't recognized the CPU/GPU and PC building isn't my field so I could way off. But here's my honest attempt at it without paying a premium for the form factor which isn't an important feature for me:
PCPartPicker Part List: https://pcpartpicker.com/list/3WkCdq
Price: $1021
Yeah. That's great,but I think it gets a bit expensive if you try to go small form factor and silent. You need more premium parts for that.
So if you want something small, it's a bit more expensive
At 51L in volume this thing is absolutely massive compared to the Steam Machine.
The RTX 5060 will be significantly faster than the Steam Machine on games with hardware ray tracing effects, which tend to be the more demanding games.