Im surprised by this news.
Said no one, ever.
I think the game companies are much better equipped to hold here against Apple TV, though other forces might blow them out. Apple TV simply isn't compelling. You don't bring a Game Boy everywhere, games are expensive, and they're mostly for kids. Who'd be happy with a $1 game.
You might be making the same mistake that console companies are. It used to be that on computers you had to have a dedicated game machine, and swap out graphics cards once a year to play the latest games. Over time, the "avg" computer caught up with the game industry, and suddenly you didn't always
need a dedicated computer for the task.
What's going to kill the console market? Microsoft, probably. They have the XBox and the computer OS. Apple, internationally, isn't much of a dent. XBox, if executed well, should do fine. Same with PS4. Nintendo seems to be missing the boat on online trends wanting to remain strictly a toy company.
It's what happens when the only tool in a market is a near professional level tool. Look at the Camera, where SLRs were what a lot of amateurs were buying with no intention of using it as a specialized tool. Now, with digital cameras everywhere that fill 99% of the use cases for 99% of the users, The "only a camera" market is dieing. But even if the Professional or "serious photographer" cameras go down in sale, they won't die because there will always be those users that demand a dedicated tool.
Laptops are the same way. Once a market diversifies people realize that the first tool on the market (laptop for portable computing) isn't the only way to satisfy everyone's desire and use case. Smart phones and tablets are filling a huge niche in people's lives. What that does though is it also draws a bunch more people into the "mobile computing" market by providing them a device that is cheaper and still fulfills their needs.
So it's of zero surprise to me that dedicated expensive gaming consoles are getting dwarfed by non-dedicated gaming machines, because the majority of "gamers" aren't "hardcore $600" gamers, they are $10 a month gamers.
What'll save them is that there will always be those people, like myself, that desire a dedicated gaming experience on my large plasma TV. I realize that I am not the average gamer. The positive thing is that as games diversify, and the platforms we can play them on, the number of "gamers" in the world sky rockets. Hopefully there will be plenty to go around.
The question I have is not whether consoles will die, but whether there is really the market for 3 players in it. I fear that historically Nintindo help onto the "casual" gamer, and won't make it without targeting "professional" gamers.