[citation needed] In February 2022, Valve released the Steam Deck gaming handheld, running a dramatically updated version of SteamOS, version 3.0, based on Arch Linux with the KDE Plasma desktop environment pre-installed, as well as Valve's Proton compatibility layer, allowing many games designed for Windows to run natively on SteamOS.

[10][11] The first announcement was made on September 23 as SteamOS, with Valve saying they had "come to the conclusion that the environment best suited to delivering value to customers is an operating system built around Steam itself".

[21] A custom installer method was also made available through Valve's repositories, which could require additional configuration steps, allowing for smaller hard-disk sizes and non-UEFI motherboards.

This new version is based upon Arch Linux, with the KDE Plasma 5 desktop environment pre-installed to allow users to customize their systems.

Valve affirmed that SteamOS 3.0 will continue to be freely available, with the intention of allowing other hardware developers to take advantage of it and build similar handheld computing devices like the Deck.

Valve has not released a version of SteamOS 3.0 intended for devices other than the Steam Deck, though community resources exist for installing it onto commercial hardware.

[36] SteamOS is designed primarily for playing video games made for PC away from a traditional computer, such as on a television or a handheld device.

It does this by providing a console-like experience, including quality of life features and a streamlined user interface, on top of an operating system that targets generic PC hardware which can be housed in any form factor.

[37] Valve claimed that it had "achieved significant performance increases in graphics processing" on the first two versions of SteamOS prior to the maturation of Proton.

In January 2014, GameSpot compared the performance of three games (Dota 2, Left 4 Dead 2, and Metro: Last Light) running on Windows 7 x64 and SteamOS 1.0 beta.

With an AMD graphics card, they found that all ran at considerably fewer frames per second on SteamOS, and Left 4 Dead 2 stuttered, which they attributed to a device driver problem.

Ars Technica suggested this might be due to the inexperience of developers optimizing on OpenGL in contrast to DirectX, and believed that the performance might improve with future titles.

Minecraft creator Markus Persson described it as "amazing news," and Thomas Was Alone developer Mike Bithell called it "encouraging" for indie games.

In TechRadar's review Henry Winchester praised the easy to navigate interface and future potential but criticized the hard installation and lack of extra features compared to the Steam software.

[65] Since then, outlets such as Ars Technica have revisited SteamOS since its initial debut, offering observations on the platform's growth, pros, and cons.

[67][68] SteamOS 3.0 released alongside Steam Deck as the system's built-in OS, though Valve also stated it would become publicly available for any hardware in the future.