The Ouya is a $99 game console that runs on Android and features hardware similar in spec to a modern tablet. Its focus is on free-to-play gaming. Every game will, at the very least, have a free demo mode and many others will probably be like mobile games that earn their revenue from optional micro-transactions or advertisements.
Each console is also a developer’s kit allowing anyone to develop their own games and apps for the device. Hacking and modifying the device is encouraged, this isn’t a closed system like Xbox Live or Playstation Network.
Ouya is being crowd funded with Kickstarter and if you fund $99 you get yourself one of the consoles from the first shipment. To me it sounds like Xbox Live Arcade but with the ability to develop and publish your game with a lot less red tape. The only questionable thing is the longevity and possible limitations of the hardware.