I think there's a middle ground of people who just are not interested in building or upgrading a gaming computer (or just don't like their typical form factor in the ready to go out of the box gaming PCs) but also don't want the completely closed off ecosystem of a console.

I think if the Xbox ended up being more like the Steam Machine (i.e. more like a PC) then this middle ground that the Steam Machine sells to would probably go away as I don't think the group of folks who care that it's Linux based is high enough to support production.