Valve and Xi3 are partnering to release a Steam-based gaming device codenamed 'Piston'.

The heavily rumoured 'Steam Box', which is on display at both the Valve and Xi3 booths at this week's Consumer Electronics Show in Las Vegas, is designed specifically to support Steam and its Big Picture mode.

Xi3 founder Jason A. Sullivan said: "Today marks the beginning of a new era for Xi3. This new development stage product will allow users to take full advantage of their large high-definition TV displays for an amazing computer game experience.

"As a result, this new system could provide access to thousands of gaming titles through an integrated system that exceeds the capabilities of leading game consoles, but can fit in the palm of your hand."

The pint-sized system started life as an unsuccessful Kickstarter project last year, but has since gained the backing of Valve.

Little else is known about the device, but is said to contain 1TB of internal storage and offer modular component updates, including the option to upgrade the CPU and RAM, according to Polygon.

Valve co-founder Gabe Newell previously revealed that the company is working on living room-based hardware, but did not go into specifics.

Valve took its first step towards optimising Steam for the living room with the release of the Big Picture mode update, optimising the service for TV screens.

Watch a video introducing Steam's Big Picture mode below:

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