According to sources speaking to the Wall Street Journal, Google is in the process of developing an Android based game console for people to use in their living rooms on their televisions, as well as a next generation wrist watch that can play media.
Allegedly these projects are a preemptive move to head off Apple, who is expected to release a similar device in the future as part of its next Apple TV product release. The word is that Google hopes to design and market the device, and will attempt to release at least one of them this fall.
Whether consumer will be interested in another Android based gaming console remains to be seen. The OUYA, another Android based console, just recently launched across the United States and the UK and it's a little early to get a good handle on how adoption of that device will play out.