Yes, it's happening.

Well we're getting closer - some lucky hardware testers, possibly as soon as next year, reports Engadget. Jeri Ellsworth, a hacker/inventor who has recently been hired by Valve, was interviewed yesterday, and gave away some details about the progress on her hardware development team's prototypes, such as the primary focus ("To make Steam games more fun to play in your living room."), and the keyboard/mouse to controller conversion.

From Engadget:

It sounds like gamers will have a chance to give feedback on those designs, as Valve's hardware team is planning a beta for its various products. Ellsworth is hoping to have one for the team's first product in the coming year -- we'll of course know much more about the product by then, she says. Internal beta tests are already underway, and a variety of the team's prototypes are available in the office for other Valve employees to tool around with.

Obviously, this is still early yet, but Valve's goal is clear - getting Steam on the TV for gaming as easily and functional as possible. Big Picture Mode was just the start. 

Julian "Mirai" Williams