Valve has confirmed that development on a sequel to the Steam Deck is underway, applying insights gained from the original model.

Valve is focused on creating a significant performance leap for the Steam Deck follow-up, rather than releasing minor annual updates.

While the timeline for the release of the new generation remains uncertain, AMD's upcoming Zen 5 CPU and RDNA 3.5 GPU are generating anticipation for new gaming handhelds.

The current Steam Deck features an APU with four Zen 2 cores and an eight Compute Unit-based RDNA 2 integrated GPU, both of which are over three years old.

Valve engineers have stated that current technology limits the performance enhancements that can be made without sacrificing battery life.

Valve's custom chip for the Steam Deck, codenamed Van Gogh, is based on AMD's RDNA 2 architecture, which offers better performance than previous Vega offerings.

They criticized the practice of annual hardware updates, arguing that such releases typically offer only incremental improvements.

The company is waiting for a significant generational advancement in computing power before launching the next Steam Deck, which is expected to be called the Steam Deck 2.

The designers have emphasized that they will not release a new Steam Deck model every year, as they believe it would be unfair to customers.

Despite its popularity, the Steam Deck is starting to lag behind competitors due to its aging AMD APU.

Currently, Valve has reduced prices on the Steam Deck, offering a 15% discount, making the 64GB model available for under $300.

The Steam Deck has been praised for its performance with modern games, such as running Hades 2 smoothly with minimal battery drain.