Part of the point the article made is that your Xbox 360 being used for Netflix and Hulu is no longer a game console, but is instead an internet connected set top box that happens to also have game playing capabilities in it.

Microsoft makes no profit on the console itself; it depends on licensing fees on games sold. Your console, if you aren't buying games for it, would be a loss for Microsoft if not for the Xbox Live subscription required to use Netflix or Hulu.

These services are now being built into TV's themselves themselves.

But so far, they're terrible at it. The difference in usability between my Vizio TV's preloaded Netflix and such vs. the Xbox with Kinect is so vast it's not even funny. The living room is where voice command really shines.

It's hard to tell if they are poorly written, or the hardware is too slow, but I agree.

At least it is functional once you've got a video going though.

Yes, and the TV makers are /clueless/ about user interface. I mean, it's comically bad. Samsung has a gesture and voice recognition system in one of their high-end TVs and I was actually laughing at how miserable it was ("TV, channel two!" and it would turn off, that kind of thing).

Now, team up a TV maker with someone with a sense of design and you're talking turkey. (Now you get into cool stuff like: TV makers really only want to run Linux, 'cause it's free, which counts out Microsoft and Apple, and TVs have to meet rather interesting power constraints, which are often tough to meet).

True, but once you've bought a TV you're very limited; none of my smart TVs offer Netflix, for example. They are capable (they run BBC iPlayer, LoveFilm, YouTube etc) but LG aren't exactly releasing updates thick and fast.