My guess is that Valve will keep their own mirrors and update from upstream only once their relevant packages will be tested for compatibility.

I have been using Archlinux for more than 10 years and from time to time some major upgrades can make things broken for a couple days until all the packages get updated and all the relevant compatibility fixes have been pushed upstream by the developers. But in most cases this happens with some 3rd party desktop related packages or closed source drivers. I bet that Valve won't have that many problems with AMD since their drivers are open source.

I could also see them running a read-only system partition with snapshots for updates. And with btrfs send/receive you could do 'system updates' with just incremental snapshots, and the ability to rollback.

Or just use packages and make regular snapshots.

The problem with Arch is that Arch needs to be tinkered with when Arch wants to be tinkered with, not when you want to spend an evening messing with your OS configuration. "This evening I want to learn about X," becomes "this evening I am learning about the linux userspace ecosystem," for every value of X.

Not if you have a filesystem with snapshots.

I was going to say that idea would have helped so much back when I ran Gentoo, but then I remembered how often my 40 GB hard drive was full.

Steam bundles its own runtime for games (it can be configured to use system libs instead, but that's not the default). Games will often also ship with copies of additional libraries not in steam's runtime.

I bet that the underlying distribution doesn't matter much at all, and since this console is meant to also be a desktop (or living room) PC, might as well ship with a distribution that's good for that purpose. Arch makes more sense for desktops than Ubuntu, and has for a while tbh.

If you are conservative and thorough in your update routine, arch can be very stable.

Agreed. I've used Arch for about 12 years. My system has been unbootable after an update maybe 3 times. That's not bad really, and that's just applying updates daily. Any additional rigour should improve this a lot.

I myself had a couple of bricks when messing with grub. Nothing that a live boot and a mkinitcpio didn't solve.

With just one hardware profile and their own upstream repos fed from Arch they’ll probably have best of both worlds.