Comment Possible cases. (Score 1) 94
The lowest risk option is to focusing on the controller/biofeedback stuff, provide drivers for Windows, and expect people to buy Windows Media Center with the requisite video cards.
Going further with a SteamBox would be a gusty move. It would run either on Linux or bare metal -- not Windows. I wonder if Valve and Google are talking about this and ChromeOS. Valve (as successful as it has been) can't lose the kinda money Microsoft, Sony, or Nintendo can on each console, but if they don't play the game that way, there is also no need to lock down the box. It would need to be a market-priced PC box. The DRM is there to protect the software from being duplicated -- not the hardware from being re-purposed.
Look for a video card partner or two (ones with existing Linux drivers). Look for a PC vendor partner. Controller/biofeedback stuff is the missing piece.
Unlike software, hardware still has to go through the channel. Maybe Valve and Steam are established enough that CostCo/Target carries it, or maybe it is only available for purchase on-line. Returns would be deadly. Spec'ing a platform, providing or guiding the biofeedback elements, and partnering with existing PC vendor would be lower risk.
Still, it would be very gusty. Microsoft did the X-Box to forestall someone making a beach head like this. To just make the beach head anyway will not go unnoticed.
Still, look at the risks to Valve if they don't do anything. PCs giving way to mobile and in this economy, Sony, Microsoft, and Nintendo controlling the the power and time frame of their consoles, and unwilling to give Steam a place on the menu.