They probably thought to themselves that the latter would be the better option. Not only to make them easily affordable to produce and buy, but to retain the same performance to competitors.
After all, SoC is the same ones used in Android phones that were made for gaming.
Yeah I think I spent like close to 300 all in on my Pi5 setup buuutttt depending on how you look at it that is super cheap, like per game or all the "Mini" consoles you would have to buy to get something close to it.