The Wall Street Journal has spoken to people familiar with the projects who said the devices could be available as soon as this autumn.
A video game console would provide a significant opportunity for the leading internet search engine to expand Android's reach beyond its stronghold in smartphones and tablet computers.
Android software powers three quarters of all new smartphones and more than half of all tablets.
Google would not comment on the report.
Google is increasingly involved in the hardware business as it seeks to better compete against iPhone-maker Apple. It acquired mobile phone company Motorola Mobility last year and Google is currently testing a wearable computing device known as Google Glass.
The Wall Street Journal also reported that Google is working on a revamped version of its Nexus Q music-streaming device.