Valve is preparing to enter the console market with its "Steam Box" gaming hardware, but Microsoft doesn't consider it as a competitor just yet. Speaking at Microsoft's TechForum this week, Don Mattrick, president of the Interactive Entertainment Business, fielded questions about the strategy for Xbox and its competition. Asked about viewing Valve as a competitor, Mattrick simply said "no" before noting Valve is "doing some innovative stuff" and creating some great experiences. "The scale of products and things that are being brought to market are probably a little bit richer when I look at Sony, Nintendo, Apple, and Google," noted Mattrick.

"I love Gabe..."

Despite not viewing Valve as a competitor in the console space, Mattrick has huge respect for its founder Gabe Newell. "I love Gabe, I was there for his lifetime achievement award so it's wonderful to see what they're creating." We spoke to Gabe Newell at CES, and he's clearly bullish on Valve's chances of disrupting console gaming. "The internet is super smart. If you do something that is cool, that's actually worth people's time, then they'll adopt it," he said at the time. Since then, Newell has admitted that Apple is the Steam Box's biggest threat, at a time when the industry is anticipating Microsoft's next Xbox move.

Xbox could face some fierce competition in the living room

Nat Brown, a founder of the original Xbox concept at Microsoft and former employee, recently noted that Apple poses a serious threat to the Xbox as a gaming and entertainment platform. I asked Mattrick about any possibilities for opening up the Xbox platform fully to third-party developers, but it seems he's happy with the curation approach. "There's a certain level of technical and production competency that people have to get through because we're trying to curate great experiences," he explains. "We're trying to make sure that what exists upon our service on our system is done to a quality level and has interest for people who are likely to use it."

It's clear Microsoft's Xbox platform needs to move more closely to its Windows and Windows Phone platforms, making it easier for third-party developers to create apps and games to run on its next-generation console. With Xbox Live Arcade games costing developers thousands of dollars to patch, and an antiquated process for Xbox app and game development, Microsoft will face some significant challenges if it doesn't capitalise on its early lead in the living room. Here's hoping that Microsoft doesn't leave it all up to its own idea of curation.