Non-gamers may not know that Valve is the company that created the popular Counter-Strike, Portal, Half-Life, and Left 4 Dead games, along with Steam, an online video game store for both PC and Mac.
Steam allows purchasers to buy video games and download them to any computer they own as long as they log into their Steam account. Physical media (CDs) isn't necessary, and Steam sells far more than just Valve software.
That online store may be why Apple is talking to the company, but it is unclear.
In 2007, Valve co-founder and managing director complained about Apple's approach to gaming. He said,
"We have this pattern with Apple, where we meet with them, people there go 'wow, gaming is incredibly important, we should do something with gaming,' and then we'll say, 'OK, here are three things you could do to make that better,' and then they say OK, and then we never see them again.
"And then a year later, a new group of people show up, who apparently have no idea that the last group of people were there, and never follow through on anything. So, they seem to think that they want to do gaming, but there's never any follow through on any of the things they say they're going to do."
With Mac OS X gaining more market share, and with Apple hardware being far more gaming-friendly than in the past, that may be changing (although the upper end of Windows hardware is still more powerful than Apple hardware).
In 2011, in an interview with The Seattle Times, Newell, “raised concerns” about the walled garden approach of iOS.
There is an iOS app for Steam, but it is used only for chat and buying games.
So what could Apple have been discussing with Valve? The rumored iTV? More support for iOS? The most likely topic would seem to be Mac OS X Mountain Lion. Apple is building Game Center into the version of OS X, which could mean some competition between Game Center and Steam, although hardcore gamers will probably still stick with Valve.
On the other hand, Apple has surprised before, and has a ton of cash on hand. Who knows what Tim Cook has up his sleeve?
Update: Valve's Gabe Newell has weighed in, saying the meeting never happened, shooting down all the above speculation.