Steam machines appear to be dead in the water.
I'm not tracking Steam Machines sales, since I'm not interested in using them personally. At the same time, their manufacturers like Dell and others don't publish sales numbers for their hardware, so I can't say whether they are dead in the water, or selling well even if I wanted to. But, it doesn't look like manufacturers see them as failing. Alienware/Dell for instance released the second generation of their variant (R2) recently: http://www.dell.com/en-us/shop/productdetails/alienware-steam-r2-console
For me the benefit of Steam Machines advancement was the pressure they could put on console incumbents (MS and Sony), forcing them to do less bad stuff and reduce bad influence on gaming in general. I.e. they had that potential to show that consoles can be closer to PC and not being crippled with corporate paranoia and slowness. But if they'll fail, I doubt Sony and MS will improve much. They enjoy stale market where people buy them anyway.
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Also note, that VR support on Linux is only now starting to surface (with various Vulkan demos shown recently). So talking about new consoles (in the media) will be most likely in VR context in general, since it seems to be a popular topic.
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I think Jim's point is valid. Why are Sony and MS even trying to compete with PC and tablets?
He is right that current incumbents are only becoming worse. But that's the point - they are only able to do that because they aren't competing with PC and tablets. They managed to make a relatively separate market where they enjoy capture and stagnation. Like any oligopolists, they aren't interested in investing in quality and innovation. Breaking the walls of this market could force them to move forward.