According to sources, the company has been working on a hardware spec and associated software which would make up the backbone of a "Steam Box." The actual devices may be made by a variety of partners, and the software would be readily available to any company that wants to get in the game.

Apparently meetings were held during CES to demo a hand-built version of the device to potential partners. We're told that the basic specs of the Steam Box include a Core i7 CPU, 8GB of RAM, and an NVIDIA GPU. The devices will be able to run any standard PC titles, and will also allow for rival gaming services (like EA's Origin) to be loaded up.

Many speculated as to why Cook would be visiting Valve, maker of popular game series like Half-Life, Team Fortress and Portal. Valve also boasts an incredibly robust online PC gaming platform called Steam that operates similarly to Apple’s App Store.

Our sources also say that Apple’s television set will come with an Apple-branded, Kinect-like video game console. The interface will rely heavily on motion and touch controls.

"We think that our business interests are served best long term by operating in a way that's consistent with open, collaborative approaches with both our customers and our partners," Newell said. "I'd say Nintendo and Apple are a lot closer together than Valve and Apple are. They both have such a strong, clear design ethic, and if you want to go along for the ride, you can. But it'd be hard to see the Steam Workshop coming out in the context of something that Apple does."