Nah I don't see it like that. I don't think this would have any drastic effect on PC gaming. I think steam would just become a service for consoles as well as PC. Maybe Valve would make their games with the limitations of the PS4 in mind, but Valve aren't exactly known for using cutting-edge tech (With the exception of maybe HL2) and consoles really only start to limit what devs can do compared to what they can do on a PC after around 3 years; we'll have Valves next major project (HL3) within the first 3 years of next gen for sure. 

I suspect that any move like that would put Sony in the drivers seat. I think what Valve are really considering in their long term planning is the inclusion of an App store in Windows 8. The royalties are significantly lower and having what is effectively an addon without the same OS integration trying to compete is likely to make it difficult to grow their marketplace.

That would pretty much make it a guaranteed purchase for me.

I'm thinking this might happen also because of the rumours about Valve making their own console, Valve lacks experience in the console business and could use Sony's expertise, also they would benefit from Sony's first party exclusives. PSN (SEN) wouldn't go away, it would just be merged with Steam on the home console so if you buy a game like LIMBO which is available on both Steam and the home console it would unlock on both platforms.

Also Sony needs help to beat the Xbox in NA, and Valve/Steam is very popular and has a lot of respect in the West. Half Life 3 would help a lot too =p

You mean rumours about Valve making their own console. Valve is the company you're referring to, steam is a service they provide :)

Opps, I wrote Steam instead of Valve my bad.

As much as I'd like that, it seems extremely unlikely. Out of the big three (and the PC), Sony and their Playstation got the most flack from Valve this gen for their developer solutions or lack thereof as well as marketing strategies and some economic moves. With Valve on the rise and bigger and better than ever before I can't see them teaming up with a massive company that has suffered some of the biggest fiscal losses in the industry lately and have crashed headlong from the throne they once sat upon.

I like the notion though! Personally, I hope Valve keeps focusing on the PC, they seem to be the only developer today who remember their roots and give thanks and pay homage to it daily through their services and work.

Name it the Steam Machine with Half Life 3 exclusivity. Bam, millions to be made.

SteamMachine? Dude, SteamEngine obviously...duh!!

Steam Machine sounds better brah. But I say you sould battle each other to the death in Sports Champions to see pick a winner.