It wasn't too long ago when a Valve job posting heavily suggested the company would begin developing hardware. Last month a survey appeared looking for beta testers of both hardware and software, which pretty much confirmed that earlier job posting. Now, Gabe Newell has said the hardware is already in beta testing and three different controller prototypes are in circulation. Newell believes these controllers are just another part of bringing Steam into living rooms. He also doesn't think current controllers are cutting the slack, as Newell explains: "The reason we're doing controllers is we didn't think there was enough interesting innovation going on."
Hopefully it isn't very long before Valve can officially show off these new controllers and maybe show other companies what's missing.