It looks like Google is taking the gloves off and planning to enter the gaming arena alongside Microsoft, Sony and Nintendo.
As stated in a rumor report from Kotaku, five separate sources (a mixture of first and secondhand reports) familiar with Google's operations have outlined the gist of the company's gaming plans, which consist of producing some form of gaming hardware, spearheading a new streaming platform, and recruiting developers.
Though details are extremely light, what's there is telling: the streaming platform will handle heavy-duty computational processes such as rendering graphics, meaning games can be offloaded to Google's servers and streamed, sparing consumers the need for powerful hardware. This makes sense, given the reports' claim that Google's hardware would be linked in some way to the streaming platform.
Google might very well be looking to launch a console that doesn't have to compete with the price points of Microsoft's, Sony's and Nintendo's offerings, but in order to sell said console cheaply it would also have to be cheap to produce. The easiest way to reduce costs would be sacrificing expensive physical hardware (high-end GPUs and CPUs) in favor of relying on the aforementioned streaming service, which might be what Google's plans are.
As for acquiring developers, word on that front is all but nonexistent. But don't be surprised if Google commits some big bucks to major acquisitions, should these rumors turn out to be true. After all, we just saw Microsoft buy a good number of big-name studios, including Ninja Theory. Google's not one to enter battles unprepared, so we should assume they'll be trying to match, if not exceed, those sorts of studio gains. After all, exclusive IPs and properties are what set apart gaming's current giants.
While all of these rumors sound neat, gamers should be cautious when getting excited about the idea of a streaming-centric gaming model. Services like Onlive have proven that consumer-grade internet might not be ready for such a task, and even more recent, improved game streaming offerings like PSNow have proven divisive. We'll see, though — if there's any company with the resources to overcome these sorts of infrastructure hurdles, it's Google.