Personally, I wouldn't expect this device to be a console in the same way that the current console manufacturers are producing consoles ...
I would expect valve to create an "operating system" and a definition of the system's capabilities to enable hardware manufacturers to produce a set-top box that can play steam games; and developers would be able to produce games that were released on steam that targeted both the PC and the set-top box. Depending on how valve managed it, hardware manufacturers could produce either low end or very high end systems that sold to very different markets without segmenting the market too heavily; in other words one manufacturer could produce a $250 system that played games at low detail at 720p@30fps, while another manufacturer could produce a $1,000 system that played the same games at ultra-high detail at 1080p@60fps.
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