The industry reacted enthusiastically when Valve announced its Steam Big Picture mode, with many gamers hoping the feature is just a prelude to a future console.
As you may recall, Valve Software actually maintains a hardware division, although it has only been around for about a year and still considers recruitment its primary concern.
In fact, Valve employee Jeri Ellsworth went so far as to say "prototyping is almost secondary." However, the software company, famous for video games such as Half Life, will eventually offer hardware products. Exactly what Ellsworth and her team in the hardware division are working on is unknown, as the team keeps its projects very tightly under wraps.
Nevertheless, it's easy enough to assume Valve is likely working on some sort of game console. To be sure, Ellsworth says that her team's immediate goals are "to make Steam games more fun to play in your living room."
Of course, her team is also working on hardware solutions to the control barriers facing many Steam games in the living room. As noted above, Valve is planning public betas for its various projects and hopes that at least one will be ready by next year.
Ellsworth confirms that internal beta tests are already underway, with employees trying some of the hardware out. It's unclear exactly how a hardware beta would be handled, but Ellsworth says that it would be tied to Steam in some way.
Ellsworth also noted that wearable computing products are long-term goal, somewhere in the realm of 2-5 years away for the company.