This is a guest post by William Judd.

This Consumer Electronics Show has been an unusually good one for PC gamers. Not only has Nvidia announced Project Shield, a hand-held Android games console that uses their new Tegra 4 processor to stream videogames from your PC, but Valve has finally officially announced their Steam Box.

The idea of the Steam Box is that it is a Valve-endorsed gaming computer designed to be hooked up to an HDTV in the living room. The Box hooks up to Valve’s Steam online store and gaming community, allowing you to play PC games with the ease of a console. Steam recently released their “Big Picture Mode” update, which added a console-style UI suitable for using with a controller on an HDTV. The Steam Box should have a small physical footprint and should offer a fairly good price to performance ratio, allowing it to play the majority of games at HD settings.

Speaking to The Verge in an extensive interview, Valve Software CEO Gabe Newell described three levels of hardware: “Good”, which would cost around $100 and would come down in price from there, “Better” which would cost approximately $300 and “Best” which could cost as much as any top-of-the-line gaming PC.

Valve would look to build its own Steam Box running Linux, but would also work with other hardware partners to create an entire new class of computers running along similar goals. While the Valve-built Steam Box would have tightly controlled hardware standards like a traditional games console, other Steam Boxes could have a range of specifications and features decided on by their manufacturer.

The Steam Box created by Valve won’t just be useful in the living room, however. The Box would also work as a server, with next-generation versions of the box running post-Kepler Nvidia architecture being capable of running as many as 8 disparate displays and controllers.

Valve are also investigating innovative new game controller. Newell stated that Wii Sports, the launch title for the Wii, remains the pinnacle of motion-based input, so Valve have moved onto other options. Biometrics look like they’ll provide a potentially new avenue for exploration, as instead of replacing mouse and keyboard or controller based input, they would instead add new inputs that would allow the game to respond to your heart rate and other subconscious clues. Gaze tracking was also mentioned by Newell as an area of interest.

Overall, the Steam Box definitely seems to be an interesting new development for PC gaming. For too long, the attention has been on fairly inconsequential mobile gaming developments like tablets and iPhone accessories - with the Steam Box, we may see something much more exciting. Valve revolutionised the industry with their Steam gaming service and marketplace, and it looks like they could have a similar evolutionary leap on their hands with the Steam Box.