That's the biggest problem of any company, you have an idea, build it from scrap and when it's done, 3 years later, it's already outdated and it's not pertinent anymore.
No one can predict the future.

The Steam Machine (Steambox isn't a thing) is PC hardware running a custom release of Linux that is currently barebones & in alpha release.  The PC hardware is fully capable of dual booting a second free OS like Ubuntu which gives you tons of functunality, but hopefully Steam OS itself gets a software manager to install things like Chrome, Libra Office, Transmit, VLC, Gimp etc, since those apps alone do 95% of my common PC tasks.  The current lack of a software manager is the only thing keeping me from making a Steam Machine rather then making a new Ubuntu machine + Steam, like I currently have.  The open source nature of Linux however means that driver and software advances made on Steam OS will migrate to other Linux distros, so even if I stay with Ubuntu I will still benifit from Steam OS existing & the advances made there.

Yes Linux, or any other platform for that matter has no chance of competing with the PC games library.  That's a fact I can't talk my way around, but it's not a deal breaker, just like it's not a deal breaker on any of the other consoles either.

With the ever increasing power of the AMD APU's it won't be more then a couple years, if that, before high power Steam Machines are hitting the market at $299, you could even build a low end Steam machine for less.  Yah, that controller is awesome isn't it, and yes Valve is making it available to all Steam platforms.

If you don't personally have an interest that's fine, Valve has said that this isn't meant to replace your desktop PC.  Steam Machines are meant to bring Steam to the Living room.  We havn't even talked about the PC game streaming.  I have no interest in the Xbox, but I'm not going to assume everyone has the same interests as me.

Everything you are saying has a valid perspective, but is clashing with the overall message Valve is looking to portray with the SteamBox. 

Sure you can install Ubuntu and Linux... many people do this on regular PCs. However this clashes with the intended market for this device. Is there a person out there that is unable to put together a PC like this and has to buy it from iBuyPower for $499, yet is able to set up a dual boot with Ubuntu and use it efficiently? I don't think a person like this exists... I am 100% sure that you will build your own Steambox and will not buy it from one of these 12 vendors. 

In terms of software...VLC, Chrome...I'm sure these are on the way or will be on the way shortly. The problem again is the intended market that SteamBox is going after which is the Living Room. Will NHL Gamecentrer make an app for this for? How about Plex? How about Hulu? What about ABC or CBS cable apps? Most likely not...  Steambox needs to be an entertainment hub with a boatload of media apps if it wants to take up 2 feet of room under the TV. It has to be more like iPad and less like Linux and Ubuntu which is downright impossible with open source. 

BTW I am not looking at this as someone that dislikes Valve or Steam. I am a huge PC gamer and love gadgets. I am looking at this strictly critically from a business perspective. Those 12 vendors will have a very hard time convincing people to take the $499 plunge for this product. I am willing to bet that Valve will have more Steambox computers running on DIY PCs rather than dedicated gaming machines sold by these vendors.

Evidently this is Valve trying to distance themselves from reliance on MS. As long as the manufactures are not looking for big profits and Valve can secure more Linux games, they can make this a success but it will not be quick.

One of the problems with this type of system is that it cannot compete with consoles because each manufacture needs to make a profit on the hardware. This limit the audience who would purchase one since there is nothing as of today that separate the Steam Machine from any other PC and so far it looks more limited.

The good part about the steam machine is that its an open system that Valve can make and improve probably faster than the console makers on their product.

The problem I see is that momentum is big for consumer products. I do not see how Valve is going to generate enough interest from PC gamers to invest in a steam machine and I really do not see it taking any decent chunk from the console crowd since price is big. The real problem with the Steam machine is that it sits in the middle and such products never really do well and only drain the resources of the company pushing it.

The problem valve has is far greated that Linux gaming library. They will never beat Windows in terms of game library and support... even if they only release Half Life 3 for Stemabox exclusively. :)

They best they can hope is to be on par with Windows a few years from now for all new releases. However by the time they are on par, they will be well behind a 2 other ecosystems in terms of livingroom penetration. Apple iOS and Android are spreading like wildfire in terms of market penetration (smartphones, tablets, built in to TVs, dedicated handhelds and consoles...) and they already provide a TV ready experience that Steambox will never match. They are also cheaper, serve a wider range of use cases and have a games library that is growing fast.

It won't take the place of regular gaming consoles. And "only" $500 (minimum)? Wow that's cheap.

Well yes & no.  The Steam Machine is a product that the average person can just buy & use, & not have a tough time, even if they have never used Linux before.

However, making a dual boot system from my experience is not difficult at all, it's the first thing I ever did in Linux and had no problems, I actually made a tripple boot system just for fun.

1. insert disk Plug in USB stick, reboot.

2.Wait 5 minutes for it to load into the ram.

3.Once the new tempoary instance of Linux launches click "install".

4.The auto partition manager launches and asks you if you want to install along side another OS & how much space you want for the new partion, choose an amount.

5.Wait a few minutes for it to install. done.

It's even easier if you wipe the original OS & use the full hard drive.

But if you just want to use it as a living room game console you don't need to do any of that.  So yes and no.

disolitude said: "They best they can hope is to be on par with Windows a few years from now for all new releases."

I don't get why that is such a checkmate against Steam Machines when the same applies to all other consoles.

Let's just choose to disagree, it's nothing to get worked up over.

The $1899 version promises smooth 4K gaming for everything
http://www.eurogamer.net/articles/2014-01-06-first-steam-machine-to-debut-this-month-for-USD1899

The beauty of the Steam machine is that the hardware will get better every year for the same price.
Wait a couple years and the 499 version will run circles around the current consoles.

In 3 or 4 years when consoles are again struggling to maintain 30 fps it will be the perfect time to buy one.

Some of you guys too closed minded.

This will be successful, maybe not 3 years from now. But 5-8years from now, this will be competing with Microsoft (and sony, if they decided to go for ps5).

While the consoles we know are stuck in long generation cycles, this will have much quicker cycles and evolve fluently, so market share wont start from 0 every time, will be very successful, mark my word.

I will buy for my entertainment room, cause will be able to put downloaded media with subtitles for sure on it. Thing I cant do with xbone or ps4, or wii U.

I hope you didn't think we were arguing here as that wasn't my intention at all.  I enjoy discussing things like this and I possibly get carried away which can be sometimes confused as arguing, but the my tone is nothing but respectful.

Truth of the matter is that I appreciate all constructive inputs and points of view and yours was great...