In an interview with the BBC, Gabe Newell announced that Valve has been working hard on the Steam Box, and hopes to offer prototypes for testing within the next few months.
Newell revealed the news at the BAFTA awards last night, where he was awarded with an Academy Fellowship.
We also got an inside look at the progress Valve is making with the console, and the problems that the company has come across.
"There are noise issues and heat issues and being able to [deal with] that while still offering a powerful enough gaming experience is the challenge in building it," said Newell.
He also discussed some new ideas that Valve is playing with, including the possibility of a controller that can track gamers' body states. So far, there is no confirmed design of the controller.
"If you think of a game like Left For Dead – which was trying to put you into a sort of horror movie – if you don't change the experience of what the player is actually feeling then it stops being a horror game," he explained.
The long-awaited addition to the console wars will apparently be Linux-based, and will be out in late 2013. No word yet on tentative prices or a specific release date.
Are you interested in what the Steam Box can offer in the next generation of consoles? Sound off in the comments below.