Microsoft corporate vice president Phil Harrison admitted that the company plans to keep a close eye on Valve Software's invasion into the Xbox space with SteamOS and the Steam Machines initiative. Now Sony UK boss Fergal Gara is saying the same thing, admitting that Steam Machines could pose a potential threat to consoles.

"In this market you've always got to expect some broadside disruptive technologies to come along, and it seems like a potentially good example of that. I haven't had a chance to study it in much detail," he told Eurogamer in an interview. "What I would say is, I don't think anything about it is significantly rattling our confidence at this point in time and what we're doing as PlayStation. We have to keep an eye on Valve and many other competitors."

But Gara also admitted that the company can't simply ignore the SteamOS initiative either. "Steam is arguably the pre-eminent digital download service for gaming. So we'll watch it," he added.

If the upcoming Xi3 Piston is a sign of things to come regarding the Steam Machines invasion, Microsoft and Sony may not have much to worry about. The "console" will be 4 inches square in size and pack a powerful AMD punch, but will sport an equally powerful price tag of $999 USD. The device will likely ship with SteamOS installed along with an unknown list of Linux-based games. However, unlike consoles, the Piston is easily upgradable so that owners aren't locked in to a specific hardware set for nearly a decade.

"Clearly there is a lot of excitement around gaming in the living room on the biggest screen in the house, often times connected to a great sound system and creating that real intensely high quality game experience with a very powerful CPU and a very powerful GPU," Microsoft's Harrison said last week.

"Valve is a very impressive company, and obviously we're going to be watching what they do with great interest," he added.