It's not about steam machines, it's about the game catalogue. Steam has 3000+ titles on Linux and the Steam runtime takes away a lot of the pain of developing for Linux.
Valve's announcement that games ran faster on SteamOS had an almost immediate response:
> “A few weeks after this post went out, some very senior developers from Microsoft came by for a discrete visit. They loved our post, because it lit a fire underneath Microsoft's executives to get their act together and keep supporting Direct3D development. (Remember, at this point it was years since the last DirectX SDK release. The DirectX team was on life support.) Linux is obviously extremely influential." [1]
And again, market relevance was not required for SteamOS to succeed. Gabe Newell has been very open about the fact that SteamOS' goal was to keep Microsoft in check and have a plan B for when things go south..
Roughly 1/3 of the steam library runs on Linux. Valve continues to update SteamOS, and they are still heavily involved in creating Linux drivers and middleware. Every week new games are ported, new frameworks are released with Linux support and new Linux dev game tools are created.
SteamOS succeeded in forcing Microsoft to clear up its act, and this is the main reason for Valve's investment. Their continued investment is to continue to make sure that they have a plan B. They are doing a lot of behind-the-scenes work to make the Linux gaming stack amazing. This looks "failed" from the outside because they aren't pushing the platform heavily, but it is actually a lot more beneficial that doing a big marketing push before the platform is ready.
The interesting thing with a platform like Linux is that it's not dependent on one big revenue stream to survive. Because of this, it doesn't matter if it takes years to get massive adoption because it's not burning a hole in the pocket of a company. If xbox was in the same position linux was in, you would be correct in saying that it failed, because anything less than 30% market share means gigantic losses for Microsoft which would lead to axing xbox.
PS: Atari's games run fine on Linux. Their retro emulator runs on Linux. They seem to know what they're doing.
One of the devs of the Minecraft Windows 10 edition said that it would be trivial to port that to desktop Linux but they would have to set up their own payment and distribution system, which just isn't worth it for that tiny market.
Having packaging and distribution built into an IDE goes a great length to solve that issue.
Programming languages or platforms aren't the issue. Software packaging and distribution is. Porting is easy. Getting your software to users is hard.
Look at the Minecraft pocket edition (and its Windows 10 respin), one of the devs said that it would be trivial to port that to desktop Linux but they would have to set up their own payment and distribution system, which just isn't worth it for that tiny market.
One of the big issues with their attempt was ~0 support or documentation for porting existing applications. Everything was focused around building an Ubuntu app from scratch using their custom qtquick-based SDK, but that's not what we needed.
With the flatpack integration, Builder really has the potential to become the Xcode for Linux.
I hope that Ubuntu starts to support Builder. Ubuntu tried something similar with qtcreator and the Ubuntu sdk, but that was a really bad experience. Let's hope that the switch to Gnome also means that Ubuntu switch their efforts to Builder.