Sounds like a cool idea. Obviously there's nothing they could really do to get PC users to switch, but there's a lot of people who just want something they can plug in and it'd be cool to offer people PC gaming with ability.
Of course they can do something to get PC users to switch. Just give it decent hardware and subsidize it just slightly. Then watch how fast we hack it to run standard Windows and use a mouse and keyboard.
In fact this is probably the biggest problem with their plan. If they lock it down too much it wont run standard Windows games, dont lock it down enough and you will sell a bazillion of them and lose your shirt as most never run steambox and buy the games you are trying to sell them.
It has to run Windows for DirectX compatibility. That means no performance advantage compared to a desktop PC.
Of course they can get a performance advantage, they just run a heavily cut down version of Windows that has nothing but the absolutely required processes running, and kills everything when a game starts. Tey can also give game developers a hardware profile to optimize for, have specially tweeked drivers, and game specific software profiles, all of which can lead to a lot of performance gains.
They also couldn't force-adjust old games to support controllers.
No, but most games these days already support controllers, and for the few that don't they just don't put the steambox flag on them and they never show up on the specialized steambox UI. This will actually lead to even more games having controller support.
If a console becomes a PC then its no longer a console!
I think it is going to be the other way around, PC's are becoming consoles. Just look at Windows 8. The future is going to be nearly ubiquitous disposable computers with locked in content.
Last year the biggest selling desktop PCs were all-in-one models where the entire PC is built right into the monitor. With future chips coming out like Haswell that use 15 watts or less you could upgrade even an all-in-one PC for crossfire just by plugging a second chip into the mobo in the back.
Cheap PC gaming is about to rock the world and within five years even tablet PCs will be capable of playing games like Crysis. Cheap is good. I like cheap. But that also means consoles and high end PCs will have to be capable of producing significantly better graphics then games like Crysis and Skyrim to remain competitive.
I'm talking resolutions so high the human eye can't detect it and jaggies become a thing of the past. Video games with graphics every bit as good as any animated film today and sometimes approaching photo-realism. In fact, there are already plans for making the first video games that use the exact same graphics as feature films. You may find yourself going over to friend's house and having to ask if they are playing a video game or watching a movie.
And this is why, while I would love to have that sort of graphics, it is just not happening.
We are seeing diminishing returns on graphic hardware, and AMD and Nvidia are already moving away from faster and better graphics and looking more at general computing with their future graphics cards.
This is in part because the standards are moving so slow. You don't have to beat the best and fastest graphics of last generation any more, just the graphics on a 7 year old xbox360.
So, while I would love to have a game playing in photo-realistic graphics, it is not happening until Sony or Microsoft can put it in a box and make a profit selling it for $400.
In the mean time consoles and PC's are going to move towards each other. The ultimate dream of Microsoft and other end user software companies is to have a computer that is so simple to use that anyone can operate it with no training and so cheap to produce that if something goes wrong you can toss it out and buy a new one.
The Xbox 360 has come very close to that first goal. That is why the Windows 8 UI is so heavily derived from it. The next goal, the disposable computer, is just a matter of changing the goals of hardware design from increasing raw compute to using die shrink to improve power use per cycle. Sound familiar?