Google is increasingly involved in the hardware business as it seeks to better compete against iPhone-maker Apple Inc (AAPL.O). It acquired mobile phone company Motorola Mobility last year and Google is currently testing a wearable computing device known as Google Glass.
Google's Android operating system is the world's most popular mobile software, featured on three out of every four smartphones sold. A video game console could provide a significant opportunity for Google to expand Android's reach beyond its stronghold in smartphones and tablets.
Google was not immediately available for comment.