I actually don't mind this idea, but as it stands, a lot of Android games are made with mobile and touch screen in mind, and very few are meant to take advantage of a big screen and desk/couch environment. Android integrating information into more traditional setups will go a ways to convincing developers to develop for those settings, but right now, playing mobile games in a non-mobile environment will not be an A class gaming experience.
On the other hand, there are a lot of Android games which are just pain good, mobile oriented or not. A cheap console that plays them will get a few people interested...
I am obviously not the market they are looking for, so take my opinion with a grain of salt, but I really wonder how many people will be in the market for this. I mean, I have a larger phone, and I have played quite a few games from the win8 store on my PC, and they simply do not scale well to higher resolutions or screen sizes. On top of that, what makes mobile games great is that they are mobile, and the few I have played on the desktop with a controller or keys/mice loose a lot in translation from their native touch interface. You are either going to need a multi-touch pad on the controller, or else some sort of kinnect/leapmotion tech to really make games as fun on the TV as they are on the phone/tablet. I have serious dobuts as to how popular these new android consoles will be just from that practical issue of translating touch to a controller, much less the issue of essentially repurchasing games you already bought on the phone.
That being said, I have 2 kids, one of which who is going to be ready to start playing simple games, and perhaps a device like this or one that is entirely made of vowels would be cheaper and have more appropriate games than forking over the money for a wiiU or something.... but then again I might just dust off the PS2 or Wii and get them started on those instead.
Caeden, one advantage I see consoles like this having over traditional consoles is that, unlike a Playstation or XBOX, software does not need to be made specifically for these consoles continually. MS and Sony have had to put in significant investments developing and promoting and personally programming for their platforms in order to get software on them one way or another and, in doing so, further sales. If they didn't foot a huge initial bill, they would just be boxes with no software. Sony and MS have to make, promote, and further their own ecosystems from scratch - Android consoles, not at all.
These Android consoles, on the other hand, could have ten people buy them total and still have hundreds of games with more in the pipeline at any given time. I doubt the companies making these expect them to be extremely popular - but since they are piggybacking off of an existing gaming ecosystem rather than trying to create their own from scratch, they can offer a product that will have support with low initial investment and as such expect far lower returns while still making a product.
Niche product, in my eyes, and I doubt the companies making them think otherwise.