Two and a half years after their release in 2015, Valve is pulling the units from manufacture and sales, as the console did not do well, selling less than 500,000 units in it's lifetime. Valve's plans to knock Windows 8 off did not succeed.
Valve's console-PC hybrids seemed like a good idea at the time, as Gabe Newell decided to make them in order to combat the abomination that was Windows 8 at the time. However, sales numbers did not do so well in the last two and a half years and Windows 8, as bad as it is, still stands on top of Steam Machines.
In the seven month period after it's release, the console sold less than half a million units. After that, sales for the console hybrid were microscopic. It is unknown as to how many Valve manufactured, but we can be sure that more than half a million went to waste.
The unit was described as dead on arrival and many review sites were disappointed with it. However, being partnered with Alienware and Syber, the continued support on the Steam Controller and other Steam affiliated hardware made money by leaps and bounds. The Steam Controller still gets updates and upgrades frequently.
A sad day for Valve, as their first console-PC hybrid failed. No doubt they will attempt it again in a few years once the technology requires it. Until then, leave the PC gaming for PC gamers, and the console gaming for console gamers. No need to mix them up as those who appreciate both will get both options.
Even though Valve cut manufacturing of the Steam Machines, they are still working hard at upgrading the SteamOS and the Steam Controller, along with other Steam affiliated hardware and software. The Steam Machines were pulled on 30 March 2018, two and a half years after their launch.
Steam continues to be the top digital distributor of video games, but are being chased closely by EA's Origin, Ubisofts Uplay and CD Projekt's GOG platform, which is the only of the 4 mentioned that does not support in-game DRM.