Gaming giant Valve, which runs the Steam store, has announced a portable console that will play PC games.
The Steam Deck has been likened to the Nintendo Switch console in appearance but Valve says it will have the components of a high-end gaming laptop.
The built-in display is limited to high-definition 720p graphics but the console can also be connected to an external display.
One analyst said the device could start an era of handheld PC gaming.
"Valve has managed to deliver a product at an attractive price point for the specs and is sacrificing hardware profitability to kickstart what it hopes will be a new category of gaming PC devices," said Piers Harding-Rolls, research director for games at Ampere Analysis.
"I expect this to appeal most to existing Steam users that are interested in having a companion device for playing games away from their main gaming PC."
Like the Nintendo Switch, the Steam Deck has a touch screen and two thumb sticks. However, Valve has added two track pads to give players mouse-like controls for their PC games.
It is twice as heavy as Nintendo's device, weighing 669g.
The console will run SteamOS and is built on Linux, which means owners will be able to use the device as a Linux-based PC to browse the web and even install rival games stores.
Software known as Proton will let Windows PC games run on the system without developers having to produce a new version of their titles. However, not every game will be compatible.
"Valve is probably hopeful that people spending more time on Steam using Steam Deck will buy more content through its store front to help offset the hardware costs for the company. In this sense, it's a bit of an experiment," said Mr Harding-Rolls.
Analysis box by Marc Cieslak, BBC Click
Valve's new Steam Deck will inevitably draw comparisons with Nintendo's updated Switch OLED console.
Both are handheld gaming machines with 7" touchscreens - and if you want a big screen gaming experience, both can plug into full-size TVs or displays.
But that's really where the comparisons end.
While the Switch eco-system is a walled garden, carefully controlled by Nintendo, the Steam Deck is a more powerful machine and a more open proposition.
It is essentially a handheld PC with access to Valve's digital Steam store and its gigantic catalogue of games.
The pricing is competitive too - £349 for the entry-level machine compared with £309 for the newer Switch OLED. This pricing strategy points to Valve committing itself seriously to this new handheld.
Nintendo is unlikely to be overly concerned by this new competitor. The Nintendo experience and many of its games are unique to its platform and the company has sold an enormous number of Switch consoles.
Meanwhile, Valve knows its audience and is acutely aware of the kind of content and experiences long-time users of the Steam platform are used to.
Ultimately, as these machines will provide different kinds of handheld gaming, it's probable there is room for both to co-exist, with neither machine really cannibalising the audience for the other.