Do PC handhelds such as the Steam Deck actually pose a threat to the Switch 2?
In the specialized handheld gaming market, which it had created with the Game Boy in 1989 and dominated ever since, Nintendo had no rivals when it released the Switch in 2017. Sony had nearly given up after two resolute attempts with the PlayStation Portable and PlayStation Vita, while Sega had come and gone.
Things appear to have changed somewhat, but not significantly, as Switch 2 approaches its 2025 launch. The Switch's enormous success has awakened the sleeping giants. According to reports, Microsoft and Sony are currently working on specialized handhelds for Xbox and PlayStation. However, it was improbable that the PC gaming industry took the initiative. In 2022, Valve took the lead with the Steam Deck, which quickly sparked a developing ecosystem of comparable handheld PC devices from producers like Lenovo and Asus. Non-Nintendo handheld gaming has returned after a lull. This implies that there will be competition for the Switch 2's dominance in handheld gaming.
Nintendo is, in a way, the victim of its own strategic vision. The Switch was the first to recognize that the convergence of handheld and home gaming experiences was made possible by the closing processing power gap between mobile and at-home devices. Lastly, the same games might be appropriate for both situations. This was amply demonstrated by The Switch, and now everyone wants a piece.
However, Steam Deck and the other PC handhelds must be the competition for the time being, as specialized devices from Sony and Microsoft are still years away. Chris Plante, my colleague, made a strong case that these gadgets pose Nintendo's "biggest threat in the present." They outperform the Switch in terms of specifications and have nearly eliminated the difference between them and modern AAA home gaming. In terms of software, they provide the amazing variety and compelling value of almost everything on Steam, as well as a lot of PC gaming outside of it, if you are willing to tinker a little.
Image: Nintendo
Given its price and features, the Switch 2 does, in fact, directly compete with the less costly PC handhelds. It is $50 more expensive than the Steam Deck base model, at $449. The Switch 2 is more user-friendly, has a better screen, is roughly equal in power and storage, and comes with detachable controllers and a TV dock. In terms of specifications, the new Lenovo Legion Go S ($549) and the base model of Asus' ROG Ally handheld ($499 or so) are also fairly close rivals.
All of these devices are fairly similar in terms of their raw hardware. Notably, the Switch 2 should perform somewhat better than its class thanks to its exclusive access to Nvidia's industry-leading DLSS upscaling technology. In actuality, though, there is not much separating them.
However—and this is a big, big but—comparing the Switch 2 to the PC handhelds by glancing at a spec sheet or pointing out that they can all play Elden Ring and Civilization 7 does not fully capture the situation. PC handhelds are very popular among enthusiasts, but they are not in the same league as Nintendo consoles. In short, handheld PCs remain a niche product.
Let us take a look at the Steam Deck, which has been a huge success for Valve. Approximately 4 million Steam Decks have been sold, according to market research, though Valve has not disclosed sales figures. Additionally, Steam Deck outperforms its rivals; according to the same study, approximately 6 million PC handhelds have been sold overall in the three years since the Steam Deck first hit the market. It is concerning that there are not any indications of significant sales growth yet.
When you compare that to the 150 million units sold of the Switch, you can see the stark disparity in size. Naturally, the comparison is not directly analogous. Nintendo has been in the handhelds business for more than 35 years, the Switch has been around for eight years, and PC handhelds have only been around for three years. Nevertheless, Nintendo projects that it will sell 11 million units of the outdated Switch during its current fiscal year, which is more than five times the amount of PC handhelds that are expected to be sold during that same period. With 6 to 8 million units available at launch and up to 20 million sales in its first year, analysts predict that the Switch 2 will almost instantly surpass the size of the PC handheld market on its own.
Image: Valve
Valve is a very wealthy company and a major player in the game industry. However, as a newcomer to the retail consumer electronics industry, it has a lot of catching up to do, assuming it wants to do so at all. You cannot buy a Steam Deck in a Walmart; they are not available for purchase in stores. Valve does not purchase advertisements for it on television or at bus stops. Despite having more conventional distribution channels, companies like Lenovo and Asus are nothing in comparison to Nintendo's marketing, retail, and distribution power.
The PC handhelds are niche products due to additional factors. Windows-based handhelds, such as the Legion Go and ROG Ally, are notoriously difficult to use. Even though Valve's SteamOS is far superior, it still lags far behind Nintendo's and other console platforms' dependability and ease of use.
You can not just open a brand-new Steam Deck, turn it on, and start playing games. To get the most out of it, you have to tweak it. Despite being a useful guide, Valve's game verification system does not ensure that every game will be enjoyable to play. Additionally, the deck is heavy and unwieldy. Since they are obviously not made to be shared, you would never purchase one for a child or give one to a family member. In all likelihood, it will still be difficult to convince non-gamers to buy it.
One upcoming gadget is said to have the potential to somewhat alter this narrative. According to reports, Microsoft is collaborating with a manufacturer of PC handhelds on a system that will feature Xbox branding and a user interface inspired by a recent iteration of the Xbox PC app.
This could be an easier-to-use gadget that provides convenient access to PC Game Pass while on the go, which would be very alluring. Even though Microsoft has been producing Xbox consoles for more than 20 years, the company has repeatedly failed to leverage this experience to improve the smoothness of PC gaming, and the device does not seem like much more than a temporary solution until Microsoft's own dedicated handheld console is ready.
Until competitors in the console market step up, Nintendo will not have real competition in the handheld market. According to reports, Microsoft plans to release its portable Xbox in 2027. If Sony's portable PS5 is ever released, it is also predicted to be years away. Nintendo's situation is undoubtedly getting hotter, and the handheld gaming market will undoubtedly be significantly busier than it is now by the end (or even the middle) of the Switch 2's life. However, competition for the new console will be, at best, distant for the next few years.