When the original Steam Deck was first announced back in mid-2021, it was a revelation. Valve proved that handheld gaming PCs could be cost-effective and still powerful enough to run demanding software at playable framerates. The first-generation Deck would ship in February 2022, with the Steam Deck OLED model later innovating with a larger, prettier screen, improved refresh rate, and a superior battery in November 2023.

The Steam Deck impressed at the time with its respectable semi-custom AMD APU complete with its four-core (eight threads) CPU clocked between 2.4 and 3.5 GHz, and 8 RDNA 2 Compute Units clocked at 1.6 GHz.

In short, the hardware inside meant that pushing the best PC games to 30 FPS (and above in some cases) at its native 1280 x 720p resolution was a possibility, but the competition has proven that it's time for Valve to go back to the drawing board if it wants to stay competitive.

That's because the Steam Deck is now fairly underpowered when compared to the best PC handhelds on the market. The competition have Full HD (1080p) displays (or better), and feature vastly superior hardware in the form of AMD Ryzen Z1/Z2 or Intel Arc G3 APUs that run rings around the previous-generation frontrunner. So, what does Valve need to do to ensure the Steam Deck 2 can compete if, and when, it launches?

1. A 120Hz Full HD (1080p) OLED display as standard

Both the Steam Deck LCD and Steam Deck OLED models feature a native resolution of 1280 x 720p with either a 60Hz or 90Hz refresh rate. Considering when the former was launched, this was an acceptable trade-off for providing playable framerates. However, every competing product in the oversaturated space has since eclipsed this, meaning the Steam Deck 2 absolutely needs a 120Hz 1080p display at a minimum to be viable.

You only need to look as far as the biggest rivals from back in 2023; the Steam Deck's panel was passé less than a year after the hardware debuted, as evidenced by the Asus ROG Ally and Lenovo Legion Go. Both devices could confidently be called true Steam Deck rivals. The first-generation ROG Ally had a 7-inch 120Hz 1080p panel, whereas the original Legion Go had a 144Hz 8.8-inch QHD+ screen.

I'll always argue that anything above 1080p on a display as small as seven or eight inches ultimately results in a waste of resources, and it seems hardware companies got the hint in 2024. More than two years ago, the MSI Claw A1M launched with a 7-inch Full HD screen, as did the Zotac Zone, Asus ROG Ally X, Asus ROG Xbox Ally X, Lenovo Legion Go S, and Lenovo Legion Go 2, as well as recent releases such as the MSI Claw 8 EX AI+. There's no need for Valve to look to 1440p (QHD), but the company needs to get with the times to avoid being left behind; lacking a decent screen would kill the Steam Deck 2.

2. A semi-custom AMD Zen 4 and RDNA 3.5 APU (or better)

It's never been Valve's style to throw standardized components into its hardware. While the competition was comfortable using the AMD Ryzen Z1 or Z2, or gave Intel Arc graphics a go, the Washington-based company had to go a different route. We saw this with the semi-custom APU inside the Steam Deck and Steam Deck OLED, but this design philosophy has since been repeated with the recently released Steam Machine.

Valve's living room PC features a semi-custom AMD APU that utilizes a six-core (12 threads) Zen 4 CPU and an RDNA 3-powered GPU with a total of 28 Compute Units and 8GB of GDDR6 VRAM. This home-console rival was said to offer "six times the horsepower" of the Steam Deck, and the tech could act as the perfect blueprint for what should be inside the Steam Deck 2.

Now, considering the portable nature of a Steam Deck successor and the lack of an active cooling solution, combined with the price tag (I'll get to that further down the page), it's unlikely that the Steam Deck 2 will be as powerful as the Steam Machine, but it could close the gap. The Steam Machine uses around 170W of its total power draw when plugged into mains, with 110W dedicated to the GPU, 30W for the CPU, and the rest of the components (RAM, fans, SSD, etc.) accounting for the other 30 to 60W of draw.

When plugged in, the Steam Deck OLED draws a maximum of 45W (or 15V at 3000mA). When on battery power, Valve's handheld draws anywhere from four to 27W depending on the task at hand. Obviously, battery life has to be a huge consideration here as well, so we aren't going to see upwards of 100W for a handheld. Today's competition, chiefly the MSI Claw 8 EX AI+, can provide 30-60 FPS in High settings in 1080p in either 17W or 35W on battery, but that comes at its own (literal) cost.

That's the power potential, but what about a close approximation of how a semi-custom RDNA 3 or RDNA 3.5-backed APU could perform inside the Steam Deck 2? Well, the closest we can get is with the performance jump from the AMD Ryzen Z2 compared to the Z1. At lower TDPs, the Z2 offers a generational leap anywhere from 4W to 40W, offering playable framerates of at least 30 FPS in 1080p, which is the only standard requirement for a Steam Deck Verified game in 2026. In particular, the Z2 Extreme features 16 RDNA 3.5 Compute Units with a total boost clock of up to 2.9 GHz and 24GB LPDDR5x-8000 memory; Valve could use something similar.

3. A sub-$1,000 / £1,000 price tag

When the Steam Deck was first revealed and distributed, it was sold at a loss. Prior to the original model's release, Gabe Newell said this decision was "painful" but "critical" for the hardware to break through to the market. Affordability and competitive performance took priority over outclassing the competition, and that was the core appeal of the Steam Deck, especially in the early years.

Well, it's nearing the end of 2026 now, and hardware companies (including Valve itself) have not learned from this example. The Steam Deck was successful because it was an affordable and powerful entry point into PC gaming, but that's a reality that's (unfortunately) becoming harder to remember as time marches on. The ongoing RAM crisis has meant the Steam Deck OLED shot up in price by 50%, and sales are also plummeting, and consumers have already begun to argue that handheld gaming PCs are back into the unaffordable niche product they were pre-2021.

To course-correct, Valve needs to offer the Steam Deck 2 for less than $1,000 / £1,000 / AU$2,000, at least for its base and mid-range configurations. We've seen growing backlash from gamers against rising prices recently, particularly with the eye-watering MSRPs of the new Asus ROG Xbox Ally X20 (starting at $1,299.99 / £1,299.99) and the aforementioned MSI Claw 8 EX AI's shocking $1,799.99 / £1,399.99 entry point. To remain competitive, Valve needs to undercut the competition here, even if it means sacrificing some superficial features and maybe even peak performance.

In other words, Valve needs to remember why the Steam Deck succeeded in the first place: it was powerful enough and affordable enough to make everyday people consider PC gaming. It's a tall order given we're currently in one of the worst times in the computing industry in recent memory, where the price of GPUs, RAM, SSDs, and anything else that uses memory are skyrocketing with no signs of slowing down. Even if the Deck 2 is originally sold at a small loss, it would go a long way to prove that Valve can be pro-consumer again, as it lost favor with the Steam Machine's so-so performance for the price tag.

4. TMR sticks and mechanical buttons

Now that we've covered a prospective Steam Deck successor's price tag, specs, and screen, it's time to talk about ergonomics. While both versions of the Steam Deck are comfortable in the hand for long play sessions, the actual buttons and sticks leave a lot to be desired. Likely due to a price constraint, the handhelds utilize the standardized potentiometers, with physical parts that can cause wear and tear over time. If left unchecked for long enough, it can eventually lead to stick drift, which can be frustrating (and expensive) to repair.

Magnets are the way to go, then. It's tough when weighing up what would be the better technology for the Steam Deck 2's analog sticks, as both Hall Effect and TMR (Tunnelling Magnetoresistance) have their pros and cons. However, it's TMR that pulls ahead in this case for a couple of key reasons: it's more sensitive, accurate, and (thankfully) cheaper to implement now than a couple of years ago. There's a reason why so many of the best PC controllers on the market are already using TMR, so Valve would be missing an open goal if it cheaped out unnecessarily here.

TMR sticks and magnetic sensing technology as a whole are far superior and lead to fewer points of failure, ensuring longevity. It's essential for a handheld like the Steam Deck 2. Modern PC controllers, such as the Scuf Envision Pro 2 and the Scuf Omega, have led the charge with microswitch buttons and D-pads.

They not only provide instant actuation for more precise inputs, but they will also last longer than a pure membrane alternative. It's not just about immediacy and feel in the hand, but also about how this design decision could influence long-term use. Ideally, you would want a Steam Deck 2 to feel as good as the day you bought it, even five years afterwards.

5. A bigger and more efficent battery for longer (or more demanding) sessions

Any good portable device, whether it's the best phone or a Steam Deck successor, lives and dies on how good the battery life is. The original Steam Deck featured a 40 Wh (or 5200 mAh battery, whereas the Steam OLED bumped things up to 50 Wh (or 6,470 mAh). That netted you anywhere from two to 12 hours depending on the kinds of games you were running, with indies at low brightness yielding better playtime than a AAA release at full brightness would. On average, though, around two to four hours is considered the standard.

That's fine, sure, but Steam Deck rivals have since included larger batteries with longer average playtimes, and this is something Valve can directly address. For example, the Asus ROG Ally X has an 80Wh battery, meaning it can last anywhere from four to six hours of playback of intensive games played at 25 to 30W under the right conditions. That's a battery size increase of 60%; considering how many more lithium-ion batteries are being made in a compact or portable form factor, it means that this component cost could be cheaper than in 2021/22, and a larger battery could be among the top features of the successor device.

Ultimately, we want the ability to sit down and play our games on the sofa or on the move for longer, so offering a bigger battery with a superior lifespan would give the Steam Deck 2 the edge it would need. If Valve can bump the resolution up, tighten the ergonomics, increase the horsepower, and keep the costs down, then the second-generation of its handheld could be the best on the market.

It's been over four years since Intel Arc graphics made their debut. Team Blue, primarily known for making some of the best processors of all time, had made its second big swing against the best graphics cards. Alchemist had promise from a price-to-performance perspective; the A-series impressed with budget-friendly performance in 1080p and 1440p with the Arc A750 and Arc A770, respectively, despite some driver issues and (initially) a lack of developer support.

Everything changed with Battlemage. Intel's second-generation Arc graphics cards received higher praise, with far superior generational performance, rivalling the best cheap graphics cards. In particular, the Arc B570 was a powerhouse for 1080p gaming with its $219 / £219 MSRP, and the Arc B580 confidently earned a perfect review from us with its all-star 1440p performance for just $249.99 /£249.99. However, that was some time ago.

Now, nearing the end of 2026, the concept of a cheap video card, or a true graphics card deal, is (sadly) extinct. You can expect to pay double (or more) for a B580 that made waves due to its value proposition just two short years ago, lessening the impact of an otherwise excellent GPU. Team Blue has reportedly canceled its Celestial range of discrete graphics cards, and the future of Druid (the codename for Intel's fourth-generation GPU) and beyond is uncertain.

Has Intel abandoned the dedicated GPU market to go all-in on the likes of its G3 Extreme chip found in the best gaming handhelds? Moreover, is there still hope for a third major competitor during the worst time to build (or buy) a gaming computer in recent memory?

What were Intel's original plans for Celestial?

When Intel Arc was originally announced more than five years ago, Team Blue confidently laid out its "Multi-Year Roadmap", with Alchemist (A-Series) slated for Q1 2022, a goal the company only just achieved as the initial GPU lineup dropped on March 30. With that said, no dates or timeframes were confirmed for the second, third, and fourth generations of its Xe platform.

Intel Arc Battlemage (B-series) graphics cards were officially launched on December 3, 2024, meaning almost three years (or two years and eight months) had passed between the two Xe generations. This release schedule is fairly standard for GPU launches; Nvidia launched the Blackwell-based RTX 50 series on January 30, 2025, with the RTX 5090 and RTX 5080, succeeding the RTX 40 series that debuted on October 12, 2022, with the then-flagship RTX 4090 (two years and three months).

It's nearing the time when we should start hearing about Intel Celestial, especially given just how well-received Battlemage was, and yet there's radio silence from Team Blue. More specifically, speculation around The C-series' cancellation were sparked from rumors dating back to April. Specifically, it was hardware leaker Jaykihn on X who alleged that "Celestial was canned long ago" and that "Druid is up in the air".

If we look at the updated Intel Arc Graphics roadmap, the company alleged that the Xe3P Cestial graphics cards should have been arriving in 2026.

What happened to Intel Celestial?

Intel had clearly stated in 2025 that next-generation Xe3 Battlemage graphics would arrive that year, and then year-on-year we would receive Xe3P with Celestial in 2026, Xe4 with Druid in 2027, and Xe Next, the "Next-Gen," in 2028. So what actually came of these claims? So far, so good, as the B-series is integrated into the latest G3 family.

As well as the Intel 18A-based Compute Tile (14-core with NPU 5 and up to 8,533 MT/s LPDDR5x memory), it also uses the Xe3 architecture for its 10-12 Xe-cores, 10-12 RT units, and 80-96 XMX AI Engines, whether it's the standard or the G3 Extreme variant. In other words, Intel has decided to renew Battlemage for a third year running, with no apparent space (or need) for Celestial at this time, at least for the purpose of dedicated gaming.

It's alleged that Xe3P architecture (Celestial) is being baked into the upcoming Intel Nova Lake processors. More specifically, the C-series could be entirely relegated to integrated graphics onboard certain incoming chips rather than powering discrete graphics cards.

This is claimed to be the case with the Nova Lake-S lineup, which is said to be a 16-core CPU with a 12-core Xe3P iGPU forged on the silicon, unlike other Nova Lake processors that could feature just two Xe3 cores.

While Xe3 is already being used in gaming handhelds powered by the G3 and G3 Extreme, the combination of both Xe3 and Xe3P in Nova Lake could be where Celestial lives. It's been rumored that the extra performance of the newer-generation cores could be primarily for driving the Visual Engine rather than being used for anything more intensive. Revealed at Hot Chips 2026, Intel announced that Xe3P would be powering its Crescent Island AI GPUs. At the moment, then, it seems that Team Blue has no interest in bringing over Celestial tech for gaming.

Battlemage isn't worth the price anymore, and Intel needs to learn from this

There's no easy way to say this: Intel Arc isn't worth the inflated asking prices. While the two main Battlemage graphics cards initially won favor with us and the general gaming public, the value proposition simply isn't justifiable this late in 2026. As touched upon above, both entry-level GPUs have doubled in price, and it's really hard to see the justification against a considerably stronger graphics card like the RTX 5060 and RX 9060 XT.

The average Arc B580 GPU nowadays costs around $330 / £340 for the 12GB variant from Intel's board partners such as ASRock and Sparkle. That gets you the current top-end Battlemage card with a 192-bit memory bus, 12GB of GDDR6 memory, and a total of 2,560 GPU cores.

However, for around the same price, you can also opt for an RTX 5060 8GB, or bump your budget up to around $400 / £400 for the far more capable RTX 5060 Ti instead. The former has a smaller 128-bit memory bus, although it benefits from 8GB of GDDR7 memory and 3,840 CUDA cores, whereas the latter comes with the same bus width but with up to 16GB of GDDR7 VRAM and 4,608 CUDA cores. Which one would you pick when weighing up a cheap gaming PC build?

Let's forget the tech specs and instead look at the performance numbers laofcct. According to testing conducted by Mark PC, both the similarly priced RTX 5060 and RX 9060 XT. We see this in countless examples with the demanding PC games tested, such as The Last of Us Part 1, Cyberpunk 2077, Assassin's Creed Valhalla, and Starfield; all of these games had superior average framerates from the AMD and Nvidia GPUs when benched in 1080p at max settings.

This is consistent with the testing conducted by Hardware Unboxed as well, as the three entry-level graphics cards were benched in 1080p with Medium to High settings, depending on the game. It's the same story with the likes of Ratchet & Clank: Rift Apart, Marvel's Spider-Man 2, Assassin's Creed Shadows, The Last of Us Part 2; you get the idea. If buying a graphics card from a processor company wasn't already a hard sell, then the price-to-performance of Arc circa 2026 certainly is.

Druid is Intel's last chance at remaining in the gaming GPU market

If Celestial is truly canceled (or relegated to an obscure APU), as has been claimed, then all hopes hinge on Druid and its Xe4 architecture, which is slated to be released in 2027. "Up in the air" really is an understatement with Team Blue's plans for its proposed fourth Arc generation; there's nothing circulating about this tech at all, which is rare considering the usual slate of rumors and speculation that usually whir up a year or so out from release.

The only real sliver of information that points to Team Blue still being in the GPU race at all comes from Alex Katouzian, Intel EVP and GM of Client Computing, who spoke to Dutch tech site Tweakers during Computex 2026. Katouzian is quoted as saying: "GPUs are a super important part of our PC product range" and "the traction of our GPU cores is really very good". It's a non-answer to a tough question that doesn't really give any indication as to what the company is planning; typical corporate speak to cover up the fact that it may have no idea where (or if) Druid has a future at all.

Worst-case scenario, then. Let's say Celestial is properly canned, but that Intel gives Druid a shot as a last-ditch effort to save the fledgling Arc graphics division in its dedicated form. Following the same blueprint as its last two GPU generations, a prospective launch of the D570 and D580 would need to be 12 to 16GB GDDR6X at a minimum, be built with XeSS 3's MFG in mind for 1080p to 1440p gaming, and still retail new for $250 to $350, respectively. Is this really something that can happen in 2027 with the price of graphics cards continuing to rise? I remain unconvinced.

There's a pathway for Intel to win back favor and consumer trust with a line of affordable graphics cards that deliver playable results for today's games. However, given the dire state of the industry and some truly puzzling top-level decision-making over the last two years, it just doesn't seem like things can be salvaged here. I would love to be wrong; more competition and consumer choice are always good for business, particularly if it means showing Nvidia the true meaning of budget and mid-range, but is Intel really the company to do that in 2027 and beyond? It's unlikely.