But basically they could converge the Xbox and Windows-based gaming.
Universal binaries - not that hard since the Xbox is x86 again.
Buy our shiny, ready to run your games optimally, Xbox, or make your own box/PC - they run the same exact games. Build some extra functionality into the Xbox... keeping the 10ft interface and the comfy couch in mind.
I can even see this could potentially leading to something more close to yearly updates a la iPhone etc. Because newer hardware would take immediate advantage of the games, which would be scalable.
Oh, btw. Digital only. Fuck everything else.