Valve may have its sights set on shaking up the videogame industry. It wants to bring Steam into your living room and compete with the Xbox 360 and PlayStation 3, claims a report by The Verge, citing unnamed sources and rumours.

The Steam-maker's strategy would create an open platform for videogame consoles, mirroring what Google has done with Android in the mobile space. Third party manufacturers would be able to build and sell devices running Valve's software. Content would be delivered through Steam.

Valve has apparently been working on a hardware specification and associated software which would form the basis of such a "Steam Box". The software would be "readily available to any company that wants to get in the game." The baseline hardware specifications include an Intel Core i7 CPU, 8GB of RAM and an Nvidia GPU. Having a baseline hardware specification will give partners "a clear lifecycle" for their products, with changes expected every three to four years.

The site further claims that a hand-built version of the device was demonstrated to potential partners at private meetings held by Valve during CES in January.

While it wants third parties to make the boxes, Valve may also be planning to manufacture the device itself. In a recent interview, Valve co-founder Gabe Newell told Penny Arcade: "Well, if we have to sell hardware we will." He reiterated: "We'd rather hardware people that are good at manufacturing and distributing hardware do [hardware]. [But] we think it's important enough that if that's what we end up having to do, then that's what we end up having to do."

The Steam Box would be compatible with "a wide variety" of USB peripherals, and would likely ship with a proprietary controller. Valve filed a patent last year for a controller with swappable, modular components, which might make its debut on the platform. The modular components enable players to pull out the sticks and plug in a D-pad, for example. The patent suggests: "This allows for dual analog sticks, a combination of analog and trackball, or further any combination of touchpad, directional pad, or additional components." Valve has also tested biometric feedback technology which would allow the controller to detect the player's pulse rate or skin galvanic response (sweating).

The report does not state what operating system the Steam Box would run, however several signs point to it being Windows based. The Verge claims that "the devices will be able to run any standard PC titles" – most of which require Microsoft's DirectX – and that it will "allow for rival gaming services (like EA's Origin) to be loaded up." Origin is only available for Windows. If the Steam Box did run Windows, the regular Windows desktop would need to be hidden behind a custom shell to allow the system to be fully controlled without a mouse or keyboard. Valve has already announced it is working on a Big Picture Mode for Steam which does just that.

Because the Steam Box would be PC compatible, game developers would not need to purchase expensive development kit hardware to make games for the device, as they do for Microsoft, Sony and Nintendo's platforms. Nor would Valve charge any licensing fees to create software for the platform, the report claims. As gatekeeper to most of the content that would be consumed on such a device, however, Valve would stand to profit handsomely from its adoption – the company takes a 30% cut of all game sales on Steam.

According to The Verge, Valve wants to take the fight to Apple as well. Apple has long been rumoured to be developing a television, which would integrate features from its Apple TV set-top box and enable easy access to iTunes content on demand, including movies, music, apps – and games. In an interview with The Seattle Times, Newell questioned whether Apple's strategy is good for users: "On the platform side, it's sort of ominous that the world seems to be moving away from open platforms." He added: "They build a shiny sparkling thing that attracts users and then they control people's access to those things."

If it exists, the Steam Box may be unveiled at GDC next week – or Valve might hold off until E3 in June.