A linux based Steam box of some sort seems like a fairly obvious guess. With the recent interest in wearable computing I wouldn't be surprised if this is more

A linux based Steam box of some sort seems like a fairly obvious guess. With the recent interest in wearable computing I wouldn't be surprised if this is more about peripherals than gaming rigs. Working on additional HID's (heads up displays, kinect-a-likes, voice) might well be a more valuable addition to their software platform than getting into the console wars. Or possibly a handheld. They seem to have 2 ends of the gaming market, high end FPS graphics fests which sell to people willing to build console smashing gaming rigs, and casual gamers who like the Bejewlled type games. It would be very hard to create a console that taps their existing muscle gamers, but capturing the gameboy, iphone casuals might be possible. If they did go towards console territory what I'd love to see rather than a closed box console would be a line of Steam certified hardware so you could build a PC that matched your pocket, upgrade in future, and be guaranteed compatibility with the Steam linux distro it runs.