And even more excitingly, this could all be unveiled at the Games Developers Conference (GDC), which kicks off on Monday in San Francisco.
So how would it work? Valve is reportedly working on a basic hardware spec that'll form the basis of the console (named the Steam Box), along with the software that'll run on it. While Valve may make a prototype to kick things off, the hardware is likely to be made by partners, with Valve making the software available to any companies who want to play -- pretty much as Google does with Android.
Top secret meetings were apparently held at CES to demo a hand-built version of the console. The basic specs are thought to be a Core i7 CPU, 8GB RAM, and an Nvidia GPU. A host of USB accessories should work with the Steam Box, and it'll ship with a controller. That control might even have swappable components, so you can tweak it based on what you're playing. Valve filed a patent for that last year.
It seems as though we can expect open source to be the name of the game with the ecosystem. Valve co-founder Gabe Newell recently criticised closed platforms in an interview, saying: "On the platform side, it's sort of ominous that the world seems to be moving away from open platforms… They build a shiny sparkling thing that attracts users and then they control people's access to those things." Apple, anyone?
It looks like theand could have a fierce competitor waiting in the wings. If the Steam Box isn't on show at GDC, it could be at E3 in June, so stay tuned for more as we get it.
Does this news spark your interest? Is open source the way forward for games, or do you prefer the traditional approach? Let me know your thoughts in the comments below, or on Facebook.