It's too late. Wagons have been circled and the narrative has had a day to be set. The market will determine if this is viable.
That's not a fair statement. I'm having some good conversations in this thread, though I can't speak for others I guess.
"The market will determine if this is viable" is a truism. We can still discuss it and speculate.
You can't lure console gamers to PC boxes, it's apples and oranges. Xbox consoles, even if they come every 3-4 years or maybe longer in some instances when more powerful hardware is not needed are still very much relevant and still the go to product for the consumer masses. A PC with Xbox games is not a replacement, just an option for more people and helps boost the Windows Store and Microsoft ecosystem just like Windows 10 on Xbox One helps boost the Windows Store and Microsoft ecosystem. They need to cater to everyone, putting all your eggs in a PC box and leaving the Xbox console hardware business is nonsense.
I agree you can't lure console gamers to PC boxes. But I think that's exactly what Microsoft wants to attempt. They're definitely the best-suited to do so.
Despite the ongoing PR platitudes of "this is to UNIFY and CROSS-PROMOTE and ECOSYSTEM", at the end of the day this is a very straightforward attempt to lure console gamers into the PC/smartphone/tablet platform. Microsoft's walled-off platform, to be exact.
They're moving away from the traditional console business (i.e. one device with a walled garden) to a walled garden (Windows Store) that encompasses all Windows 10 devices. The overall OS strategy is about mobile experiences, where you get to take your experience with you across any screen. The idea of a device under the TV fits perfectly within the overall strategy, but the traditional console business of locking down games to a single device does not. They'll still want an option for people who play games on TV as long as it's a big money making opportunity for the Windows Store.
By offering a single store where your purchases work on a number of devices they can acquire customers on any one screen, perhaps starting with the TV customers they have now, and entice them to pick up a Surface tablet or phone later to keep using and building on their digital library.
Again, they're not going to leave the TV. They're absolutely leaving the traditional console model of locking software down to a single device though.
EDIT: For the record, I think the moment Sony purchased Gakai they laid a foundation to leave the traditional console model as well. I actually think it's funny that Sony is more prepared to go device agnostic than Microsoft is.
I am aware of Microsoft's PR and their grand strategy. I do not believe they will be successful, and I hardly believe this is all there is to it. By believing the above, you are simply taking PR at face value. There is no critical thinking involved if you believe that Microsoft is doing this to "expand the ecosystem" because that's exactly what they are saying.
A bit of critical thinking and evaluation may still lead us to the same conclusion, but from my perspective there are too many pieces of this puzzle that don't quite fit. Therefore, I do not believe Microsoft's official PR-laden "vision" for this move. It hasn't worked this way in the past so it's natural to speculate if Xbox can buck the trend.
Might they be doing kinda like Sony is doing with PS Now and cross-play/buy and a more unified account system? Sure, maybe. Sony has done a good job of that in my opinion. However, Sony appears to be using their console as the foundation while the other compatible devices are tertiary. Even if Sony announces PS Now for PC (they just announced Remote Play for PC, for what it's worth) I don't think it would necessarily be an equivalent situation.
Microsoft appears to be demoting the Xbox One (for lack of a better term). It is clearly not their priority any more. They've stated as such numerous times. Xbox consoles -- as a console platform that gets exclusive developers and exclusive development -- appear to be on the way out. Instead, the Xbox is simply another device that connects to your centralized Windows account, which Microsoft has said over and over and over and over again is their goal. This is good for some people, but it does not change the fact that Xbox is being de-emphasized in importance, which leads to all other sorts of possibilities (both good and bad). Moving out of the dedicated console hardware market is easier than ever for Microsoft after these decisions, and it certainly isn't a sign of Microsoft's confidence in the stand-alone viability of the XBox console brand.
Even if people are excited about the implications and possibilities for their gaming habits, I don't see how ANYONE could say that the above paragraph is untrue.