Retail giant Amazon will launch a dedicated games and entertainment device this year priced below $300.
Running the Android operating system, the system will compete directly with Sony, Microsoft and Nintendo, offering the streaming and download of games, music, movies and TV content, multiple sources have told VG247.
Senior publishing sources have been meeting with Amazon for a briefing on the hardware - which currently goes by a number of different codenames - and popular Android and iOS games have been used to demo the device.
The unit being shown to publishers at this point is said to be roughly the same size as the PSone redesign, grey in colour, oblong in shape and with sharp edges. However, the pre-production unit is likely to have a full makeover before any official release.
The hardware is being created in conjunction with subsidiary Lab 126, designers of Amazon's Kindle devices.
Amazon will target an affordable price point - we're told below $300 in the US - in a pricing move similar to Amazon's marketing of the Kindle Fire HD against high-end iPad hardware from Apple.
The company already has a significant digital entertainment business covering the sale, rental and delivery of music, film, TV and games, as well as hardware success with the Kindle and Kindle Fire HD. The new console is designed as a central point in the living room to group all of those services together and make use of the home TV screen.
As well as competition for the big three console makers, the system will take on microconsoles like the Ouya or Gamestick that have so far failed to capture an audience outside of hobbyist markets.
The difference for Amazon is that it already has an active customer base of 200 million people along with their payment details, 10 million of which are said to subscribe to the $79-a-month Prime Service. Some analysts expect Prime numbers to grow at 5 million per year.
Earlier this month Amazon sent invites to a recruitment event in Boston for "a new revolutionary V1 [Version 1] product that will allow us to deliver Digital Media to customers in new ways and disrupt the current marketplace."
The most suitable games for the console are likely to be similar to those currently taking tablet devices by storm, where companies such as Rovio, Supercell, King and Kabam are forging ahead in the free-to-play business with a combination of accessible gameplay and high marketing spend.
But Amazon is also heavily recruiting across its games development team, with many positions requiring extensive knowledge in triple-A games across production, art, tech and design roles.
VG247 understands that the Android console was due to launch last year but was delayed at the last minute and is now expected in 2014.
According to this TechCrunch report the console will be powered by Qualcomm's Snapdragon processors. Last year Gamasutra suggested Amazon had been courting US developers and suggesting they add controller support to future tablet games.