Xi3 is in a tough spot. It has a not-so-secret deal with Valve. But Valve isn’t saying what that deal is, and everybody is assuming that Xi3 is making the fabled “Steam Box” for Valve, a console that will run Linux and play downloadable games from the Steam digital distribution service in the living room.

Valve chief executive Gabe Newell has been creating and dismissing rumors as far back as early 2012¬†about a so-called Steam Box. But Valve hasn’t launched anything. And Xi3 clearly feels like it is stuck in the middle. The company issued an extraordinary clarification about its quandary on Tuesday evening. Meanwhile, Xi3 announced it would soon begin shipping its $1,000 Piston Console, which is a PC fashioned to run games in the living room.

The statement this evening is perhaps the longest non-announcement of a product and its possible close-relative product that I have ever seen.

“We reaffirm the fact that we received an investment from Valve, as we previously disclosed during the 2013 International CES trade show, and we did so with Valve’s written permission,” said Jason A. Sullivan, founder, president and CEO of Xi3, a Salt Lake City company which makes tiny modular computers. “Second, we were asked to build a product specifically for Valve, and both companies showcased this product — the Piston Console — in their respective booths at CES 2013.

Sullivan added, “Then, during a meeting with Valve at CES, Gabe Newell personally asked me that we not disclose additional information about our relationship with Valve. We have honored that request and will continue to do so. That said, there are other items we need to cover.”

He said,¬†“For example, the assumption of many in the media has been that Piston is the ‘official’ Steam Box. We’ve never said that, and neither has Valve. That hasn’t changed. But just because Valve may not ‘currently’ have any ‘involvement with any product of [ours]’ doesn’t mean that such involvement won’t exist in the future.”

“It’s also important to note that the Piston Console will allow gamers to access Steam regardless of what our relationship is or isn’t with Valve. Additionally, Pison will also support a raft of other Internet-based gaming and entertainment platforms, which is more than what Valve apparently has planned for its official Steam Box. In this way, the Piston Console could be perceived as something more than just a Steam Box, which makes sense because at its core the Piston Console is a Modular Computer that can run any operating system or application designed to run on an x86-based 64-bit computer.

“To be clear, the Piston Console will ship initially with a Windows operating system specifically because that’s where the vast bulk of game software and computer gamers are today. That said, the Piston Console can also run Linux, and other operating systems, which means it can support the Linux-version of Steam.

“Contrary to Valve’s vision, Xi3 believes that the way to take this to market today is to do so with a Windows OS at the core, coupled with the ability to not just get to one platform/store for games, but to get access to all game stores/platforms. Studios should have the option to go through Steam if they choose or to go direct to the end-user if they so choose. That will be the difference between Piston and other Steam Boxes. You’ll be able to access Steam if you choose, but you’ll also be able to access other platforms as well–all through the Piston Console.

“We have opened Piston Console pre-orders and have been amazed at the interest and amount of pre-orders we have received thus far. This just reaffirms to us our decision to open pre-orders, because we are seriously concerned we will not be able to meet the demand for Piston Consoles for the 2013 Holiday Season.

“In closing, what Valve does or doesn’t do with its Steam Box will be up to them. So Gabe, it’s up to you. The ball is in your court.”

[Pictured at top: David Politis with Piston Console at CES; photo by Dean Takahashi]