On the heels of the unveiling of Google’s new Chromecast TV dongle, The Wall Street Journal is reporting that the company is developing a more feature-rich set-top box that would include a video camera for Hangouts and a motion sensor.

According to the newspaper’s sources, a prototype of the device was showed off behind closed doors at CES earlier this year.

It was clear from Google’s event this week that Chromecast is just one piece in the puzzle to occupy the living room. The company confirmed that the Google TV platform will get support for the Chromecast streaming technology.

IMG 9656 730x486 WSJ: Google working on a set top box with a video camera and a motion sensor

Google SVP for Android, Chrome and Apps Sundar Pichai told AllThingsD on Wednesday that Google TV is soon to be a “full-fledged Android for television”. He also teased that more partners would be announced at next year’s CES.

The Journal went on to note that it was unsure whether Google has continued work on the set-top box prototype, which was said to have access to Android games and the Google Play Store. At the least, the overwhelming customer response to the Chromecast, which originally came with a generous Netflix promotion that quickly sold out, should help validate the Chrome and Google TV teams’ efforts to augment the TV.

With Microsoft billing its next-generation console as an “all-in-one entertainment system” and Apple tinkering with its Apple TV hobby, Google will find itself up against serious competition next year as it moves forward with Google TV. Still, it’s a trillion-dollar market, so it’s not likely to get too crowded soon.

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