This is what I thought

The reason why people aren't labelling it as Ouya is because it doesn't have to sell well to get games support. Consoles like Xbox, Wii or even Ouya need decent sales to get games made for it. Steam machines only need to sell enough to get the development costs and costs of production and distribution back.

We have no idea how many machines that will be for every single company releasing these machines but in no way do they need to sell millions which would be still too less for "standard" consoles.

Will they succeed? No clue, maybe some will and some not so tha we will have in the end only a few different companies working on them but they have to sell much much less as dedicated consoles not based on a PC platform where the support automatically comes from. 

Depends what defines a flop in this case. If you mean that not selling millions of units in the first year is a flop then yes it will flop hard. But I don't think anyone at Valve was expecting that at all. Steam Machines was never going to have a console like launch, and they were never meant directly compete with consoles. To hear Valve say it Steam Machines, SteamOS, in home streaming, the Steam controller and Big Picture is a long term initiative that was created because Steam users were increasingly wanting to have access to PC gaming in the living room with a controller. It was never meant to compete with the big three, but instead make it easier for existing Steam users to consume content in a wider verity of setups. The market for small form factor PCs for gaming in the living room has existed for years. Valve are just trying to make that experience better so that people will buy more games. The Steam Machines branding it's self really doesn't mean much more than a nice marketing slogan PC manufacturers can use for that market segment.

The SteamOS/Linux push was also because of moves that MS were making at the time to push Windows into a more closed ecosystem, which caused a lot of players in the PC space (not just Valve) to get very worried about how monopolistic Windows is. So they decided to start investing into an alternative as it would take years to set one up and if MS did go full retard it would be too late. Luckily MS seem to have pretty much abandoned their plans once they realized that the entire PC industry pretty much said FU. But competition is still good to have, and having a viable alternative OS for PC gaming allows developers to put more pressure on MS to improve which makes things better for everyone.

I thought they were out already, have they not already flopped?

What is the plus behind the steam IOS :o ?

It's not Windows... or OSX.

The best part about Steam OS is that it built from the ground as a gaming OS, and not as a multi-purpose OS with the gaming bit added as an extension up over the years.

Valve doesn't have anything to lose here. Some of you are forgetting that. Even if they adoption rate is veeeery slow they'll still make money off it.

I agree with you. I just don't get it either.

PC will eventually rule all. How many consoles there can be? Collectors will need warehouses for them soon. The only essential home console is PS2.