The Wall Street Journal is reporting that back in January, Google privately demonstrated a prototype set-top box at the Consumer Electronics Show. The box reportedly worked more like an Apple TV or a Roku than a straight Google TV device or the just-released Chromecast HDMI stick. The box was powered by Android and supported Hangouts video conferencing, according to the WSJ's sources, and also had a motion sensor. The device reportedly ran on the Android operating system and was shown off by none other than Andy Rubin himself before he left the team for another division within Google. The box was said to be able to stream YouTube, Google Play video, Netflix, and was compatible with Android games.
What's not known is whether the box is still an ongoing project or if it has been killed — the WSJ says the original plan was to have released it at Google I/O. It has recently been rumored that Google is shopping around for support from TV programmers for an internet TV service, something that would fit well on such a device. Google's Android@Home team has been relatively quiet since the Nexus Q was pulled, so it's not unreasonable to assume that the team had been working on a set-top box this past January.
With Google TV, the Nexus Q, Google Fiber, assorted partnerships for putting YouTube on set top boxes, and now Chromecast, Google has been trying every way it can to establish a presence on television sets. To date, the company hasn't met with much success. Rishi Chandra, director of product management for Google TV recently told The Verge that the company still intends to continue the Google TV project, "People are still buying TVs today. They're going to have an operating system built into it, and we believe that operating system should be Android." If this rumored set-top box ever gets released, it would fit well into the "embedded TV and set top box market" that Chandra is targeting.