There's plenty of "relatively compact" ARM-based handhelds targeting the retro market already, but many of them are shipping with a pitiful amount of RAM (1GB or so) making them an absolute non-starter, while others (selling for significantly higher prices) run crappy Android-based OS's that will never be updated. There is a gap in the market for a good-quality retro-like handheld shipping with a Linux-native OS (or even just enabling one to be installed trivially after-the-fact, with everything working and no reliance on downstream hacked-together support packages).

Retroid Pocket 5 supports Android and Linux dual boot.

Well, apparently there's this project I learned about literally yesterday! https://portmaster.games/games.html

There are handhelds for less than 200$ with very good screens and controls that can play all of these. Not to mention stream (via Steam or other software) from your PC!

AYN Thor looks quite promising in that category https://www.ayntec.com/products/ayn-thor

It’s an ARM machine running SteamOS.

Your link says it runs Android?

You're right, I was mistaken, I've seen some Youtubers playing games on it, but they use GameHub to run Steam games, somehow I thought it was running Steam OS.

Sorry for the confusion.

Like an IPad mini?