While rumors about a planned Valve-powered PC/console hybrid "Steam Box" have been swirling for months, the company has been pretty coy about confirming anything. In the past, Valve has said it might release gaming hardware "some day," and the company was hiring hardware engineers and industrial designers to fill a "void in the marketplace." Now, Valve boss Gabe Newell is done being coy. Newell spoke to Kotaku at Spike TV's recent Video Game Awards red carpet and confirmed his company would start selling Steam-based hardware targeted at the living room gaming market next year.

Pointing to a "stronger than expected" response to Steam's living room-focused Big Picture user interface, Newell said that getting the Linux version of Steam out of beta would also be key to developing low-cost, living room-friendly gaming PCs. While he said Valve is developing one such hardware solution itself, Newell sees other PC manufacturers experimenting with setups targeted at the living room gamer as well. "We'll do it but we also think other people will as well," Newell told Kotaku.

Newell added the Steam-based hardware would be aimed to directly compete against next-gen consoles from Microsoft and Sony. Such a move could shake up the game console market. Steam-powered hardware would likely launch with a healthy library of downloadable games at prices often much lower than their console counterparts (especially during the service's frequent sales). It's an open question whether Valve could bring in such hardware at a price competitive with dedicated gaming consoles or with the degree of modular upgradeability that PC gamers have come to expect from their machines.

On that last point, Newell hinted that Valve's hardware would be more console-like than PC-like as far as upgrades. "If you want more flexibility, you can always buy a more general purpose PC," he said. "For people who want a more turnkey solution, that's what some people are really gonna want for their living room. The nice thing about a PC is a lot of different people can try out different solutions and customers can find the ones that work best for them."