what's interesting is that, by desktop x86 standards, cpu power is power in these consoles is going to be rather anemic. AMD "jaguar" cores, are optimized for power not performance at only 1.6GHz, meant that max single threaded performance (which is still important in games) is probably going to fall short of even what today's base-model 11" macbook air is capable of (1.7 i5, and the i5 core has a lot higher IPC than any core of AMD's). And that's at launch, how will these cpu's compare to laptop/desktop cpus just a few years after launch? not well.

But the design will allow for small, sleek and quiet boxes.

It's clear that the competition they are really targeting here, from a hardware perspective, is tablets, appleTV's and anything ARM-based. Those AMD cores will still wipe te floor with any current ARM designs, esp when coupled with an AMD GPU unit. The designers of both platforms have apparently decided that PC gaming isn't worth competing with, it's device-based gaming (and google and apple's game/app stores) that they are targeting with this form factor.

Meanwhile the gap between what a PC can render and what a console can render is only going to get a lot wider this generation.

Or maybe we all just need nVidia's grid solution to come to reality and disrupt the whole model. (e.g. end the hardware race by just putting huge racks of GPUs and CPUs near the edge of the cloud and run your games as VMs on any handy screen or device)