Apple and Valve making game console?

Apple CEO Tim Cook has been seen at the Valve head quarters, the makers of Steam, the hugely popular digital distribution store for games on PC and Mac.
The rumors are wild about what this means. Are they going to bring Steam in a more complete form to iOS with more games? Not likely, iOS doesn't really suffer from lack of games.
The Mac does, however. Steam was released for the Mac a year ago and Valve committed to releasing most of their main titles for the Mac, but there are still a huge market out there that is totally absent on the Mac.
Another interesting possibility is for Apple and Valve working together to create a new game console. Now, that's real interesting! Rumors about Valve wanting to build a game console has been around for a while but they don't have the hardware guys to work with. Well, Apple are pretty good hardware guys, and imagine the Apple TV maturing into a full-on game console with a huge game library along with the other media it supports today.
But this may be a clash of titans in the end. Steam predates the App Store (and iPhone) by a long leap and is currently the single largest digital game distributor in the world - would they really work well with Apple, who isn't really known for letting an outsider run any part of their end user communication chain? Doubtful. So, if Apple would bring the hardware to the table, what does Valve bring - other than years and years of experience?
It's hard to see how this could work out to anything substantial. The vast majority of the Steam catalog runs on Windows only so isn't applicable to any Apple product, and the few that are would make a paltry game selection for an Apple initiative.
And if Apple TV 4 runs games like it runs movies and tv-shows, surely they would be distributed via the App Store, coded by developers using the same tools available for the iPhone/iPad. I can't see where Steam or Valve fits in there.