Valve said to be working on Steam Box gaming console with partners

Specifically, there have been rumors that the company has been toying with the idea of creating a proper set-top console which could potentially pose a threat to the Xbox 360 and PlayStation 3. Valve co-founder Gabe Newell even recently told Penny Arcade: "Well, if we have to sell hardware we will."
At a glance that would simply be interesting fodder for a gaming forum debate, but we’ve uncovered information that suggests that not only has Valve been secretly working on gaming hardware for the living room, but that the company is actively pursuing a strategy which would place Steam at the center of an open gaming universe that mirrors what Google has done with Android. Backing up that concept, in the same interview we quote above, Newell says that Valve doesn’t really want to do hardware on its own, stating, "We’d rather hardware people that are good at manufacturing and distributing hardware do [hardware]. We think it’s important enough that if that’s what we end up having to do, then that’s what we end up having to do."
That jibes pretty well with this rumored arrangement.
According to sources, the company has been working on a hardware spec and associated software which would make up the backbone of a "Steam Box." The actual devices may be made by a variety of partners, and the software would be readily available to any company that wants to get in the game.
Adding fuel to that fire is a rumor that the Alienware X51 may have been designed with an early spec of the system in mind, and will be retroactively upgradable to the software.
Apparently meetings were held during CES to demo a hand-built version of the device to potential partners. We’re told that the basic specs of the Steam Box include a Core i7 CPU, 8GB of RAM, and an NVIDIA GPU. The devices will be able to run any standard PC titles, and will also allow for rival gaming services (like EA’s Origin) to be loaded up.
Part of the goal of establishing a baseline for hardware, we’re told, is that it will give developers a clear lifecycle for their products, with changes possibly coming every three to four years. Additionally, there won’t be a required devkit, and there will be no licensing fees to create software for the platform.
We’re hearing that a wide variety of USB peripherals will be compatible with the boxes, though it will likely ship with a proprietary controller. It’s possible that the controller will even allow for swappable components, meaning that it can be reconfigured depending on the type of game you’re playing. Think that sounds odd? Well Valve filed a patent for such a device last year.