Likewise, why buy a PC for $1000 when you can get a $200 gadget the connects to your TV and gives equal game performance.
Ahh, but see that is the thing- you don't get equal game performance. It's playable, but a good Gaming PC will always run it better. Some of the most recent console "refreshes"- the PS4 Pro and the upcoming "XBox One X" generally aim for higher resolutions like 4K, whereas a lot of gaming "purists" are really after much higher framerates; there are some people who even find 60fps unacceptable, and invest significant sums in being able to use 144Hz.
These people ironically and tastelessly often refer to themselves as the "PC Master Race", Because apparently now terms used to justify a genocide are funny.... but I digress. Reddit, effectively one of the biggest sites on the Internet now, has what is called a subreddit for it,
here. In the side it says right now "1,115,171 readers" which means that that many reddit users have explicitly decided to "subscribe" to the content posted to the subreddit. That's an awful lot of folks, I think. One of their arguments against console systems is that the price point is really in the range where you can actually afford an equally capable PC Build.
That Engadget article appears to look at some game consoles that ended up as duds, it isn't lookign at game consoles failing as a concept or in general. But they generally failed in the shadow of other game console systems.
If Anything, over time Game consoles have become more and more PC Like over time; nowadays they are, for the most part, locked down PCs with their own custom firmware and system software.
I also think the Surface Pro doesn't really factor in here, because it's not a gaming laptop. At best that would work towards your average consumer instead moving towards things liek tablets and smartphones for facebook and youtube or whatever average users do now. Gamers aren't going to want it because it doesn't offer good gaming performance, and your average user isn't going to want it because it is not really worth the price, so it's appeal is going to be largely limited to professionals. (at best).
Instead of a Surface pro, the "PC Gamer" archetype is more likely to go for one of those weird laptop abominations. Most laptop manufacturers have a special line for their "Gaming laptops"; MSI apparently survives almost entirely on selling gaming hardware; both desktops as well as laptops. Acer has their "Predator" series, and ASUS has their "Republic of Gamers" Brand, and so on; most of these systems are ridiculous and look like Optimus Prime changed jobs. But, there is a market for them.
With a lot of people playing games over the internet, The PC is no longer relevant. Any kind of dumb internet box that has a primitive video display will do the job. The real number-crunching stuff is done on a distant server. Back when the Internet was so very slow, CPU power was needed. But now with optical fiber Internet, local CPU power is superfluous.
Most initiatives for Remote play on a distant server haven't really gained a lot of popularity, either because they are a subscription service or because, realistically, they are used as a stopgap to allow people to play games because they cannot at that point afford to build a system capable of playing them. Otherwise, games that are played exclusively over the Internet are things like Facebook "Games", which would just lead back to the "average consumer" aspect, since you don't need a high-end PC to use Facebook.
