Charlie Demerjian from The Inquirer claims Apple is working on a new game console. He points out that the company has hired the technical brain behind the Xbox 360 and some GPU guys, and believes Apple owned semiconductor firm PA Semi could provide a low power PPC SoC for this console.
PA Semi has several low-power, high-performance modular PowerPC chips on the market now. They are basically SoCs, just slap in a GPU (see last paragraph) and you have - wait for it - a console.
To have a successful console, you need software people. If you are going to do it in a sane way, you might want a robust digital delivery and payment system. Something that looks a lot like itunes. They could build it, but they already own it. See a product coming coming into focus yet?