IOT Enterprise LTSC fully works for running Windows games. It just doesn’t have a lot of the bloatware. I’ve tried it and I’m dual booting with Arch.

If it is just meant as a steam machine, I recommend looking at Nobara for Nvidia GPU and Bazzite for AMD GPU. I will admit that I haven’t tested vr games yet.

Personally, I’m maining Arch and it plays most games in HDR at 4k 120Hz. My Windows is so I have access to Microsoft Office.