I could see people like me getting it.  Im to not nerd nuff to build my own PC, and way to lazy to try.  And Gaming PCs are expensive.  This would be a solution.

But it needs exclusice content.

It's the only console that plays DOTA2.

Well atleast I'll have a warrenty, dispite what you suggest so I can get a free replacment.  What do you think the hardware failure rate will be?

Or you can just buy a PC and play PC games on it while you play your console games on your standard console.

There is just absolutely no need for a convergent medium of the two. And how the heck do you RTS or MOBA with a controller?

I really like the push it will give to Linux gaming (well, Metro LL is already remarkable), but I agree it will bomb pretty hard. Besides that, Steam's main public is basically people that already have good PCs and good GPUs, so grabbing an entire new device with less compatible games is a hard sell.

How much more powerful is the $699 steam box than the current gen?

It was the old times on market, with less competition and no heavily stabilished brand. After Atari dominated the scene, everyone that tried to get in the market started having serious trouble. Nintendo had to change the way the game was played to enter the market and Atari was weakened (what caused the crash). Sega entered the market when Nintendo was taking it easy with the NES and not even a bit worried about its sucessor. Sony entered the market right when Ninty was having problems to launch N64 and they changed the way 3rd party studios were treated (Nintendo treated them like trash) and focused on an adult public. MS gained relevance with 360 when Sony was weakened by all the bad decisions on PS3 and counting on 3rd party support of studios that didn't wan't another gen of Sony dominance because that is bad to their business.

All the times a company became dominant/relevant was when the dominant player on the market was simply doing something stupid or doing nothing at all even with the competitor's moves happening right before their eyes. Right now, Sony and MS are doing a great game and Ninty, besides the horrible start, is doing at least decently (home consoles, since it's about Steam Machines, handhelds are other story), so I don't see a good situation to break in. Q4 2012 would have been better, before the next gen onslaught and with time to fix any issues and build some mindshare. Now, Q3/Q4 2014? They even gave time for PS4 and One build user bases, cut costs and gather a respectable game library. They will just collide with Halo/Destiny/Uncharted and discounted Titanfall/InFamous/Watch Dogs.

Questionable names?  Alienware & Gigabyte are tops.

Required huh, is Xbone a required product, how about Wii U, is it required.  Truth is no gaming device is required, it's a luxary product for entertainment, & don't tell me "Required to play exclusives." because exclusives themselves aren't required either.

Me myself, I'm not buying a closed console ever again, If I don't buy a Steam Machine I'll build my own, although buying a prebuilt one would save me having to research hardware compatability.  For me the current Linux library already looks pretty good & it's only going to get more fleshed out next year with more AAA games launching in support of Steam OS.  I wouldn't say it's a forgone conclusion that it will fail just because you don't want one.

I know VCS was from the 70's, a much different time, but it likes to say hello.

The way I see it 240-220 million 7th gen gamers will still not have upgraded to 8th gen by the time Steam Machines start shipping, it's not like they are launching into a satiated market.

It's a better option for people who's time is worth more money then they could save buy researching and building their own.

So is "This" the Steam Machine or the Steam OS, because you suggested that I would just build my own using the Steam OS.

Prebuilt PC's aren't required either, but people buy them by the million.

Edit: Sorry for the back to back posting.