will you create an operating system of this app?

Sorry, but I don't understand what you mean by operating system , Could you give more details?

It sounds like they might want something similar to SteamOS or Bazzite, where you have the whole games-first frontend integrated directly into an OS.

That would be nifty I suppose, but crazy ambitious. Might be better to just add it as a non-Steam game on your media center/handheld/etc.