According to the Natural Resources Defense Council ( http://www.nrdc.org/energy/files/settopboxes.pdf ) there are approximatley 160 million set top boxes in the US. VGChartz shows there are nearly 70 million PlayStation 3 and Xbox 360  in homes across the US. Both Microsoft and Sony are setting themselves up to make that number grow exponentialy. PS4 and XBO are both aiming there sights directly at joining or replacing the cable box. Microsoft looks to align itself with all providers via the XBO's HDMI port, while Sony looks to take on the entire industry by ushering in the era of IPTV.

What do you guys think? Could this be the key to the next mass expansion of the console market?

If Sony and Microsoft could see console sales this gen take off. Sony took the industry from 50M with the SNES to 100M with PS1, then they grew the Market to 150M with the PS2. I think that if they can pull off their Cloud TV service they could potentally see a leap to 200M with PS4. Additionally I think MS could easily see XBO cross the 100M mark. These are the two most capable devices consumers can put under there television, and they are the most well integrated devices as well. Each system works hand in hand with smart phones, both will continue to grow their suite of apps, and create a sigular experiance across all of your devices.

I can see Sony offering PS4 at little to nothing for a 2 year commitment to Cloud TV, and many cable companies doing the same for XBO. The consoles would come with a more TV style remote to be more familiar to current cable subscribers. This would revolutionize the way people use their TV's, and change the landscape of entertainment.

Your thoughts are the following, eh?

Well in the meantime, I admire your optimism but I don't see it happening. Why? Because gaming consoles are still gaming consoles. They're awfully more expensive, and aren't designed for the single purpose of watching TV, so 90%-odd of people wouldn't even consider it.

It's kinda like saying they'll more than treble the PS360 LT sales because that's how many tablets there are, and people buying tablets play games and browse the Internet, something you can do on your new console. Unfortunately, it doesn't work like that.

One other small thing, no console this generation is going to beat their equivalent from last gen. The gaming excitement has peaked on the 7th gen, and most "casuals" will be content with their system, and not want to spend a large amount of money to make their games look slightly better (in their eyes at least, I've heard this a fair few times).

So, all things combined, there's no way that the PS4 and XOne will topple their counterparts, let alone US only. And those people buying one for the sole purpose of watching TV (or at least the primary one) will be incredibly slim.

So in short, nice idea but illogical in practice.

I think the whole landscape of the Cable world is about to change in the next two years. Many new ways of watching live TV are going to emerge, and people are going to start to look very seriously at these other options. New players are going to try and bust the current package model, and allow cunsumers to pay for what they want, and not force filler channels on them. Many massive companies are going to attempt there own services at extreamly affordable prices ala WWE network. I can see WWE Network setting the ground for MLB, NFL, ESPN, ect. 

The way thing look to me, the days of watching TV from local cable providers are numbered, and people are going to go to these more social devices to enhance there viewing experiance. I think by the end of this generation, the majority of sports broadcasts will be viewed through XBO and PS4.

Counter argument:
1) Games consoles are considerably more expensive than a set top box and tv sub
2) People view games consoles as a specialist piece of hardware for games - if they dont want games they wont buy it
3) TV subs are quickly declining in US, meaning some of the integral functions of XBONE are going to become redundant to alot of people in 5+ years.

Or the Roku, which is about a quarter of the price of these consoles, and provides basically the same streaming functionality

But do they offer the connected experience of PSN and XBL? That is what I think will make the biggest impact. XBO and PS4 will bring the social aspect to a new level I think people are going to eat up.

Some people sure.

Majority of people? No way.

Edit:

I think its a massive misconception that everyone wants everything connected to everything else.

Time at home watching the TV is reserved as a quiet time for alot of people, something to get away from everything else, chucking facebook sharing and intrusive skype calls into this will deter a lot of people