Valve stated that Steam Machines have not been officially discontinued and that it is still committed to developing SteamOS and Linux as a gaming platform.
A few days ago, news of Steam Machines being delisted from the Steam’s store sparked speculation of the discontinuation of Valve’s SteamOS initiative. Steam Machines were introduced in 2015 in an effort to build up a hardware ecosystem for Valve’s Linux-based SteamOS gaming platform. The actual hardware was produced by system OEMs like Dell, but Valve did, at least, produce a reference design for the controller. Needless to say, the initiative never really took off.
In response to the rumors ignited by the delisting, Valve issued a blog post explaining the situation. The store pages for the Steam Machines were apparently removed only because of low traffic. The company doesn’t mention anything about the official discontinuation of the Steam Machine initiative, but it does admit that Steam Machines haven’t been selling well. Valve affirms that it is still committed to developing SteamOS and had the following to say on the topic.
While it's true Steam Machines aren't exactly flying off the shelves, our reasons for striving towards a competitive and open gaming platform haven't significantly changed. We're still working hard on making Linux operating systems a great place for gaming and applications. We think it will ultimately result in a better experience for developers and customers alike, including those not on Steam.
Valve has never been a company that follows product roadmaps or developement schedules. Like SteamVR, Valve’s Steam Machines initiative was just that--an initiative. There was no promise of where it would lead. For now, Valve is working on making Vulkan the Linux-compatible alternative to DirectX that the company needs it to be. After all, without a competitive game development environment, the Linux-based SteamOS isn’t going anywhere.