Well it finally happened this week – Gabe Newell confirmed what we all assumed was going to happen – a Valve software branded and controlled PC for gaming and computing in the living room.  We first started grumbling about the "Steam Box" back in March at GDC when Valve announced the Big Picture Mode for Steam and rumors of the hardware platform first began.   The next moth, Valve's Doug Lombardi denied the rumors but fell short of saying it wouldn't happen in the future.  In September the Big Picture Mode for Steam went into beta bringing the Steam interface into the world of TVs and 10-ft design, followed this year with the full release. 

And let's not forget the Linux client beta currently on-going as well as the capability to buy non-gaming software on Steam.  Valve has been a busy PC company.

Big Picture Mode was the first necessary step

Based on an interview with Gabe at Kotaku, there are a surprising amount of details about the hardware goals that Valve will set for the "Steam Box" in addition to the simple confirmation that it is a currently running project. 

He also expects companies to start selling PC packages for living rooms next year—setups that could consist of computers designed to be hooked up to your TV and run Steam right out of the gate.

HTPC builders have been making "Steam Box" computers for some time…

Interestingly, Valve is saying its contribution will be more tightly controlled than we might have thought:

"Well certainly our hardware will be a very controlled environment," he said. "If you want more flexibility, you can always buy a more general purpose PC. For people who want a more turnkey solution, that's what some people are really gonna want for their living room.

No time tables were discussed and we are left once again with just a hint of what is to come.  I think its pretty obvious based on the direction Valve is going that we are going to see a Linux-based small form factor PC with Steam pre-installed available for consumers in 2013.  If Valve starts pushing Linux support as hard as we expect it could mean quite a bit of trauma is ahead for Microsoft in the enthusiast community, one that is already reeling from the problems with Windows 8.

If you were to potentially add to the "Steam Box" a pre-configuration tool like NVIDIA's GeForce Experience that sets game options based on your hardware for you, the PC could easily turn into a solution that is nearly as simple as the console for gamers.  And because Steam is already accepting non-games, it won't take much for there to be Netflix and Amazon apps in addition to anything else you currently have running on HTPCs or tablets.