> AAA titles are typically GPU-bound anyway. More CPU flops may not offer much benefit.

Yes, but actually no. The Steam Deck is playing at extremely low resolutions. Rendering at 720p and 30fps is (on paper) 8x less demanding on the GPU than rendering a native 1440p60 experience. You can fully get by without having a powerful dGPU, which is why the Steam Deck is really able to play so many titles on a weak iGPU.

The problem is translation. Cyberpunk 2077 runs fine on a 25 watt mobile chip that uses x86, which is why the Deck even costs less than $1000 in the first place. If you try to put a mobile ARM CPU in that same position and wattage, it's not going to translate game code fast enough unless you have custom silicon speeding it up. There's really no reason for Valve to charge extra for a custom ARM design when COTS x86 chips like AMD's would outperform it.

For x86 PC games (which pretty much all games are, today), ARM is at a substantial disadvantage, period. The IPC and efficiency advantages are entirely lost when you have to spend extra CPU cycles emulating AVX with NEON constantly. If there were ARM-native games on Windows then things might be different, but for today's landscape I just don't see how ISA translation is better than native.