So is Linux

Well that is what both the Windows Api and SteamOS with OpenGL is what they are doing on an OS level, but if Microsoft would have done that say 12 years ago, what the evolution of the OS would have been today with 12 extra years key point for close to metal OS designed for Gaming.

It i think would have been better, For Microsoft to slow the chance for Adoption of another OS for Gaming, and if you look at whats transpired now, SteamOS and Android OS has a Target for just as much game Development as windows now its starting to  already get games that would have only been made for windows only!

SteamOS will be huge. Steam machines will flop. I think that's what he's getting at, he thinks Xbox as a box shouldn't need to exist but a direct to metal API for PC with exclusives would be so good even I who will probably never buy an Xbox Console would definitely go for it with my gaming PC.

Not really. I do think they screwed up the XOne's reputation, but that's their own fault.

And what that chart does not show , the increase of development of game's now also being released on other OS's that were at many time's would have been an exclusive for only a Microsoft Windows OS!

Add in Apple and the development Studio's also making games that would have been only made for windows as an exclusive are now multi-plats that include other OS's instead of excluding any other OS but Windows Only.

I can see steam machines flopping hard so no. When are they due to release anyway?

While I do Agree with what you are saying with a few things ,think in fact the Xbox should exist, I think Microsoft should have made the Xbox as a platform be as a XboxOS in other words not just making a Xbox console only made by Microsoft but allow the XboxOS to be designed like the SteamOS which is loadable on hardware that's agnostic, and like you said mainly as a direct to metal Game OS. That can be made to loadable on smart devices and open ended hardware.

Sure games are made for them, doesnt mean much though as its miniscule.

Apple is successful on the entertainment side because of Ipads and Iphone.  Not so much with Macs

That's the key, the main point is its really not about a "steam machine"  as a single piece of hardware ; it really is about a 

OS for Gaming ! made by a Game company, Which can be Designed to be loaded on any smart TV, smartphone, Tablet ; and PC hardware! That's completely free, but also has one of the best well known Gaming companies in PC making a Game OS!

And the OS is free, and the support from Valve in PC is top tier by many gamers Opinion.

 "doesnt mean much though as its miniscule.". 

I do not think, that Adoption rate of other OS based market penetration was very miniscule, and that more people and more game's are being made for Other OS's and not just only windows is a "miniscule" amount and Microsoft's recent moves in streamin xboxone games to PC  and now Mobiles also show this. Its not just against the console market.

Microsoft see what other OS's are gaining development investments into a other OS eco system besides Windows only. And its at a much larger pace that is really starting to make PC exclusive Games to be considered for other OS's. Take a look at Android and Apple iOS now add in Linux based Steam. Its very clear that The OS level Microsoft has had its Exclusive area of developments with games only being made for only windows only to be now moved to other OS's now.

Its about OS adoption has increased for other platforms that is no longer a nich area for OS's, that Microsoft has the largest market share anymore.