"Steam Box" Valve's Partner at CES (photos)

uncle_sam_ie

It's looks really cool and has an interesting design but, it's a bit expensive. Valve will need to put it in the same price as consoles for it to do well.
http://www.polygon.com/2013/1/7/3849284/piston-valve-steam-box-xi3

roast

According to Lombardi, Xi3's "Piston" is only one of a number of prototypes that Valve are considering.
Surely they'll eventually choose a few different models (probably by the same manufacturer) at different price points.

Gabe Newell

Gabe Newell wrote:

The way we sort of think of it is sort of "Good, Better," or "Best." So, Good are like these very low-cost streaming solutions that you’re going to see that are using Miracast or Grid. I think we’re talking about in-home solutions where you’ve got low latency. "Better" is to have a dedicated CPU and GPU and that’s the one that’s going to be controlled. Not because our goal is to control it; it’s been surprisingly difficult when we say to people "don’t put an optical media drive in there" and they put an optical media drive in there and you’re like "that makes it hotter, that makes it more expensive, and it makes the box bigger." Go ahead. You can always sell the Best box, and those are just whatever those guys want to manufacture. [Valve's position is]: let's build a thing that’s quiet and focuses on high performance and quiet and appropriate form factors.

Something that small would probably only be a streaming client using Miracast or Grid.