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Designing your own hardware (and the entire OS on top of it) is expensive. Using off-the-shelf components and an Android base will help that immensely. If Ouya can manufacture its console for slightly less than its $100 price (assuming the kickstarter pledge level to be the price goal), it can build its profits off the game store.

If they can make it reasonably easy to Ouya-fy an existing Android game, there will be reasonable incentive to add games to the store. In my mind, this is the riskiest part. Tablet and phone games are designed around touch. Many of them won't convert to a controller well, which will limit the number of games ported and make them more dependent on made-for-Ouya titles. They'll need to be a good-sized market for that.

That they made the system hackable and open, however, means there's the possibility that the Ouya can use a smartphone or tablet as a controller in a similar fashion to the Wii U.

I think that the creativity from the side projects that come out of Ouya have more potential to be disruptive than the console itself.

Why not play the game on the smartphone/tablet then?

And you could get the same deal with XLIG and Smartglass

Having hooked my iPad up to the tv so my boy and I can use our iDevices to play Fifa Soccer, I can attest that the differences between playing on the tv and playing on device are significant.

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