I don't sit in my living room to play iOS/Android games, the fact that the device is hooked to a bigger screen won't change that.
Also, they seem to be confusing two target audiences here. People that grew up with games as a central part of their lives are (in my experience) people that STILL play a lot of games and prefer to do so on consoles and a PC, while people who are into social and mobile games are mostly casual people that won't be bothered to sit in front of a big screen to play anyways.
I've felt like the console market was ready for some change for a while but envisioned it as a kind of Steam-console more than a big screen phone. That being said, I wish the best of luck to these guys, it's an ambitious and exciting project.
[1] http://www.theverge.com/2012/3/2/2840932/exclusive-valve-ste...
I would buy it in a heartbeat though.
Remember, the XBox 360 is now coming up fast on seven years old. By the time this comes out, eight. It's a bit fuzzy when a phone/tablet gets released that completely beats the XBox 360/PS3 due to the inability to easily directly compare the stats, but if it hasn't already happened it'll certainly happen next year, no question.
Also, that video was of games, not just video. I mean, how much more concrete a proof do you need that games are possible than... games?
Next year's hardware should also be 4-5x faster in GPU performance than Tegra 3 (that includes Tegra 4, as well as other chips), and around 300 gigaflops each, which I think already surpasses the Xbox 360 and PS3, or it's around as powerful.
If Google and many of their partners would put these chips in $99 set top boxes/consoles, and let them play 3D Android games, it could disrupt the console market, simply by flooding the market with the help of multiple manufacturers, a low price, and a decent gaming platform, that could only grow bigger if it takes off, not unlike how Google dominates the smartphone market through the sheer number of Android devices released by many, many manufacturers.
I just hope Google is smart enough to recognize this and actually go for it, instead of focusing solely on their "smart TV" strategy with their Google TV boxes.
Which makes it extra-stupid for Ouya to plan to ship a Tegra 3 console in 2013.
http://www.youtube.com/watch?v=CtxxbS_qhME
http://www.youtube.com/watch?v=HpzkCTe76Bc
http://www.youtube.com/watch?v=ZJz2UkWYqsA
And also all the emulator games up to and including PSX.