Depending on how they price and market it: very broad at a price of at least $500. Any more than that, then it'll start to shrink immediately. Since Valve is privately owned and doesn't do public investment, the price point is pretty much in their ball and court. I have some minor curiosity for this, but even at the cheapest price.I can think of I see no point in me getting SM when it eventually launches. Most of the games I play on Steam are small games that don't take much processed power to run.
Most people think of PCs and consoles just in terms of direct hardware cost, and that's the wrong way to do things.
Let's say a PS5 costs $500 and the Steam Machine costs $750-$800, which I think would be a reasonable cost for those specs in that form factor.
Yes, the Steam Machine is $250-$300 more expensive than a PS5...but the PS5 requires you to pay $100 a year to play online while the Steam Machine doesn't. PS5 games cost $70, most games on the PC cost less. So yes, the up-front cost is higher on the Steam Machine, but the absolute cost of owning either one could be comparable, or the Steam Machine could even cost less overall over time depending on whether someone plays online, and how many games they buy per year.
Add to that the fact that the Steam Machine is a full fledged PC and can do things other than play games. Most people who have a console still have some other computer, a desktop, a laptop, a chrome book, an iPad, something to do all the things that the console can't do. The Steam Machine can do all of those other computer tasks.
I would say that the worst demographic for the Steam Machine would actually be students, who need to own laptops for school, as they don't really get much additional benefit from having a second PC.