The price point needs to be pretty low to make a dent in the console market. Realize that companies don't make a lot on the console itself. The model is really "give them the console so we can sell them the games". If they can adopt a similar model then they have a shot. Otherwise, to me it's too "single purpose". That said, I'm not a console gamer and have no real desire to have more crap plugged into my TV.
Outside of desk space and HTPC stuff, I've never seen the advantage of plugging in any sort of PC into a TV. I always find it more usable to just sit closer to a smaller screen (actual monitor with higher resolution) and use a keyboard and mouse.
All of that said, if they do it properly I think it has a chance of success. The interesting thing about consoles or fixed hardware like this is there are some clear advantages. You don't have to deal with an infinite number of platform configurations / compatibility issues and can optimize software to run on this specific system.