Well, so much for that rumor. Valve marketing director Doug Lombardi has confirmed that the company is not on the verge of offering a "Steam Box" console based on PC hardware. Lombardi refused to rule out the possibility that Valve might one day sell its own hardware (something company head Gabe Newell discussed recently), but nothing is coming soon. Indeed, Lombardi even went so far as to rule out partnering with a third party that would take care of the hardware side of things.
Most rumors have at least a grain of truth, and Valve certainly seems open to pursuing hardware development. It's also working on a "big picture" mode intended to make Steam easier to navigate from the couch. Demos of that TV-friendly UI were reportedly given at CES using a console-sized Mini-ITX system, which no doubt helped to fuel the rumor mill.
I have to admit, I'm a little disappointed by the news. While hardcore gamers may be in no hurry to trade in their custom-built desktops for something built by Valve, a Steam-centric system could be an attractive alternative for gamers choosing between the consoles offered by Microsoft, Nintendo, and Sony. Valve already has the software distribution side of things figured out, and Steam's library is overflowing with titles that would run well on even modest PC hardware—especially since there would be little need to scale the resolution beyond 1080p.
Forbes recently added Gabe Newell to its list of billionaires based on his ownership of more than half of Valve's stock, which is estimated to be worth over $3 billion. That's a rather substantial sum, and it suggests Valve at least has the resources to come up with a console of its very own. Given the company's history, though, such a project would likely take ages to complete. Big-picture mode has been in development for more than a year now, and we haven't seen so much as a screenshot of the new UI.
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