Is Valve making a Steam based console?

Is this inconspicuous picture uploaded to Twitter by chatty Valve employee Greg Coomer a prototype for a console that runs Valve's Steam game service and all it's games? For those not in the know Valve (maker of such games as Half-Life, Portal and Team Fortress) runs a digital video game portal for PC and Mac called Steam, essentially iTunes for PC games. It's vastly popular and most modern games for the PC or with PC/Mac ports release through Steam.

What Valve is doing here is leveraging their customer base to essentially enter the video game console market up against Sony, Microsoft and Nintendo. This could potentially be big, here is the story.

Back on October 22nd of last year Mr. Coomer tweeted a link to an article with Valve CEO Gabe Newell talking about a possible Valve console in the future with the comment, "What I'm working on." Then fast forward to November 2nd when he tweets the picture you see above lamenting the build difficulty of the tiny PC and mentioning it runs Portal 2 (a Valve game) "FAST".

Fast forward to this week when The Verge reported that Valve was actively making a console dubbing it the "SteamBox" and even mentioning basic specs for the unit. "We're told that the basic specs of the Steam Box include a Core i7 CPU, 8GB of RAM and an NVIDIA GPU." If we go back and check out Greg Coomer's tweets about the PC he made... check, check and double check, he mentions all three are in his build.

Either way on this one, take it with a grain of salt. But we could be seeing a new entrant in the console race soon, seeing as Valve has been potentially working on this product for many years now.

[UPDATE:] Another wrinkle in the grand story here has appeared. Apparently, in November of 2009 Valve filed a patent which has recently been retrieved from the belly of the US Patent Office. The patent in question, which reads, "one or more main control input interfaces on the game controller consists of generalized sockets...a variety of modular input interfaces can be plugged into these sockets". This mumbo jumbo can be read by normal people as the ability to swap different types of controllers as they see fit possibly putting an end to the thumbstick controller vs. mouse and keyboard, basically play your SteamBox how you want to. (Maybe even with Xbox and PlayStation controllers?)