From Engadged:

There will be a new OUYA next year, and the year after that, unlike the traditional game console model, where new hardware ships in five- to seven-year generational increments. "Our strategy is very much similar to the mobile strategy," OUYA CEO Julie Uhrman told us in an interview this afternoon, following her DICE 2013 speech. "There will be a new OUYA every year. There will be an OUYA 2 and an OUYA 3," she added. One potentially featuring the recently revealed Tegra 4, perhaps, rather than the Tegra 3 powering the first units? It sure sounds like it. "We'll take advantage of faster, better processors, take advantage of prices falling. So if we can get more than 8GB of Flash in our box, we will," she explained.

But don't fret, nervous game buyer. Uhrman assured us that "all the games will be backward compatible" going forward. When pushed on how this will work, she said, "The games will be tied to you, the gamer," (like Steam is now) rather than tying your game licenses to the hardware you purchased (like, say, Nintendo's Wii U).

The first OUYA, set to launch for Kickstarter backers this March and at retail in June, comes with a quad-core A9 Tegra 3 that's been maxed out to 1.6GHz. Uhrman pointed out that, because of OUYA's home console form factor (which plugs into a wall, rather than relying on a tiny battery), the console will be, "the best Tegra 3 device on the market." It also doesn't hurt that OUYA's working directly with the Tegra 3's manufacturer, NVIDIA. She said that NVIDIA has a group of folks dedicated solely to getting the chip driving the OUYA to run at its highest capacity ever. We'll find out what that means when we get our hands on the console later this year. Should you like to hear more from Julie Uhrman ahead of that launch, she'll be speaking at Engadget's Expand event this March. Grab your ticketsright here!

http://www.engadget.com/2013/02/07/ouya-annual/

I'm going to put my OUYA next to my Phantom Labs system 

Yeah read that and pretty much saw it coming. Its the only way a mobile based game console can survive. So if you get a new one every couple years or so, you not only have 100% BC and all your digital content moves with you, but you likely spend less than a new console every 5yrs.

Yes, my thoughts exactly.  

The problem with gaming PCs were the high costs in regularly upgrading.  Consoles only upgrade every 5-7 years.   But if the lastest Ouya is only $99 then that's a much easier purchase to justify (especially when games are dirt cheap).    Ouya has a long ways to go to catch up to even PS3, let alone PS4. but with yearly updates, that could happen sooner than you'd think.    Even if it's in the same ballpark and 3rd parties can easily port to it, that'll start eating into regular console's market share.   

Still, I wish someone would announce a cross between wikipad and Ouya so I can have best of both worlds.

Very very interesting news. 5 years from now, an Ouya could be capable of delivering Wii-U level games.
I've been thinking this for a while.....can the Ouya sell better than the Vita or even Wii U?

yea just lost interest. every yr. is a problem for me. i wouldn't buy an iphone every yr. i want something that will last at the least 3 yr's if i'm going to back it.

i'd like to see being able to upgrade Ouya like a PC.

Flop. We'll see...

Just because it will have annual iterations doesn't mean you must buy a new one. Its not going to make previous content irrelevant just as your yearly iphone does not.

$99 every couple years or so is not that bad.

Why would you need to?   The older Ouya's will almost certainly play all the same games just not with all the same effects.   It's no different than not upgrading your PC to the latest specs every year or - yes - not upgrading your iphone every year.    You simply don't need to but can it you life to get the latest perks of newer tech/operating systems.

And at $99 you could update four times before you get to what PS4/720 will likely cost.  

sure but 100 every couple of years is not much less as once 400 for 6 years or so. that's why i am not interested in ouya as long as it won't get some indie games which i will care about and which won't be on other devices like pc.

i rather buy a new console for 400€ at release and play 6 years with it as paying 300€ for the same timeframe to have much worse games especially the first 3 years or so and everything else i can do with ouya is something i can already do with my pc or console. i don't need oyua to play old snes games per emulation or stuff.