Valve Confirms New Game Console on Its Way

In an interview with Kotaku's Jason Schreier at the Spike TV Video Game Awards, Valve co-founder Gabe Newell confirmed that a "living-room-friendly PC package," designed to "compete with next-gen consoles from companies like Microsoft and Sony," will be available for purchase starting next year.
What makes a PC a PC
Most of the machines Newell described, which he expected "companies" would "start selling" next year, would be powered by Microsoft Windows like normal PCs. However, they would be more like home theater PCs than regular computers; they would be designed to fit in the living room and plug into an HDTV, and they would use a much-simplified interface which eschews pointing and clicking in favor of using a game controller.
Getting the (Big) Picture
That interface is Steam's Big Picture mode, launched last week as a free upgrade to the Steam digital store. Gamers can click a button on the Steam window to be taken to a screen much like an Xbox 360's dashboard or PlayStation 3's XMB, where they can use a game controller to buy things from the store and play their installed games.
Games which can be played using only a controller get special branding and status in Big Picture mode. Steam held an enormous sale to promote such games when Big Picture mode launched, including titles like Sonic Generations which are also available on game consoles.
Steam-powered penguins?
Besides Big Picture mode, Valve's other big project as of late has been porting Steam to Linux, starting with the popular Ubuntu version. The Linux version of Steam, currently in beta, also supports Big Picture mode. Newell said in the interview that a working Linux version would "give Valve more flexibility when developing their own hardware," and dozens of games are already available for Linux gamers on Steam.
What will this hardware look like?
Newell's talk of "companies" making computers like this suggests a Valve-created standard, like the Intel ultrabook or like Google's requirements for Android devices, which PC manufacturers would have to adhere to. He also talked about Valve making its own hardware, which might be similar to Google's Nexus lineup of tablets and smartphones.
Besides that, these game console style PCs won't be as "malleable" as a normal computer, according to Newell. Like with today's laptops, it may be difficult or impossible to get at the internals and upgrade parts, the way dedicated PC gamers like to do with their machines.
How much will these machines cost?
Newell's statement that they will compete with "next-gen" consoles from Sony and Microsoft, which probably means the long-awaited new PlayStation and Xbox consoles expected next year, implies that they will be cost-competitive in some way. Gaming PCs typically have prices starting at $600 - $800 at the very lowest, while the PlayStation 3's $599 USD launch price made it a pariah of the game console world for years. A Steam-powered game console may have to invent its own price bracket.

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Valve Confirms New Game Console on Its Way