The next gen steam deck likely isn’t coming out for quite awhile still, so it’s probably not worth waiting for next gen.

Performance wise, the Steam Deck does struggle to run new AAA games if they’re poorly optimized, use UE5, or have mandatory ray tracing for lighting. It’s still possible to play most of these games, but it will depend on your tolerance for graphics quality or your willingness to install performance mods. There’s also no shortage of good games to play, slightly older AAA games generally work flawlessly and nearly all AA/indie games run great. I have enough good games in my library where I could never buy another game and always have something good to play.

The switch 2 in portable mode has nearly identical power to the Steam Deck, so if it sells anywhere close to Switch 1 I think we’ll see a lot of games target being able to run on it. The switch 1 was far enough behind modern platforms to not be worth optimizing for, for most AAA games/devs. But the switch 2 and steam deck generally have enough power to run new games at an almost acceptable level, and that makes optimization a much more appealing target.

Also worth considering is local streaming. If you have a decent PC/PS5 you can stream games to the deck. It can be a good compromise for the games that don’t run great natively.