With the information known, we can speculate on how good this system could become. If it is capable of having access to all of Steam’s library (which is doubtful) the system could give the 3DS a run for its money. The possible ability to play MMOs such as Tera, Ark, H1Z1, or even Tree of Savior (when released) could set this system up for greatness. But not only would the Smach Zero play MMOs but also triple A games such as Fallout 4, No Man Sky(if released on Steam), Call of Duty, or even the Witcher. Once again it is doubtful that the Smach Zero will have the power to play any of these games, maybe if the system has Steam link capabilities.
As for a more reasonable prediction on the system, the Smach Zero could without a doubt become an Eden for indie games. Steam is already crawling with indies, now given a new piece of hardware to develop on; we can see indie games made from all over–using all kinds of engines never seen before on a handheld. This would be a feat the PlayStation Vita (which mildly has success with indie games) and the Nintendo 3DS never fully accomplished. A feat only really taken advantage of on iOS and Android devices.
This is all merely speculation and we will not know what the Smach Zero is capable of until more information comes out. Sound off on the comments below about what you think of Steams new device? Do you think it will overthrow the Nintendo 3DS as king of handhelds?