Analyst Dispels Apple/Valve Game Console Rumor

Despite the rumors and a possible Tim Cook sighting, Brean Murray's Todd Mitchell has serious doubts about a console from Apple and/or Valve.

Over the past several weeks, gamers from all over the world have been intrigued and excited by the reports that Valve -- the famous developer behind some of the most iconic PC games of all time -- had begun to work on its own hardware. Most assumed that this hardware would be developed into a console. Valve denied that assessment but did not rule out the possibility of hardware development. In fact, the company practically confirmed that one day it is likely to happen. "What you're saying is, there's definitely nothing coming any time soon, nothing at GDC or E3, but what you're not ruling out is the possibility that, hey, maybe some day Valve would make hardware," Doug Lombardi, Valve's marketing director, told

last month. "I think that's accurate." The rumors started up again when Valve began looking for an electronics engineer

. This revelation was further enhanced when a Valve developer blogged about his hardware R&D project -- which turned out to be wearable computing -- on

. End of story, right? Wrong. Aside from the fact that Valve did not specify that wearable computing was its

hardware-related project, reports came in that Apple

CEO Tim Cook dropped by Valve's HQ this month. With so much information but very few facts, Benzinga turned to Todd Mitchell, the Managing Director of Equity Research at Brean Murray, Carret & Co., to get his take on the situation. "You know, Apple is like Google

-- they're a huge company and they probably have all kinds of R&D projects that they take a look at," said Mitchell. "But no, I don't think it's a primary thrust of Apple." With regard to Valve's rumored entry into hardware manufacturing, Mitchell also expressed doubt. "I doubt that they would go in the hardware market," he said. "They don't have the resources to go up against any of the [console manufacturers], if you look at what it costs to develop a game console." If Valve

working on hardware, don't expect it to be anything like a traditional game machine. "I think Valve, if they're looking at developing a hardware extension, it would be something to the equivalent of a Roku for gaming," Mitchell explained. "What you'd get [would be] a low-cost device that would help you in terms of streaming or helps you in terms of storage but doesn't have a lot of processing power on the end." Finally, Mitchell addressed the rumor that Apple wouldn't simply enter the game industry on its own, but that it would do so by joining forces with Valve (either through a partnership or an acquisition). "I think Apple, if you look at their model for distribution, they don't really own content," said Mitchell. "Not that Valve owns content either. I don't think that they would look at the gaming business [as something] that's acceptable to run end to end." Whatever you believe, it's best to take Apple-related rumors with a grain of salt. "Apple is rumored to be disruptive for every digital media business," Mitchell added. "I think Apple's smart enough to focus on what they do well and not try to take over the world."