It doesn't matter what they're trying to compete with. If the games can't be profitable because of the microscopic install base, then it isn't going to get new games.
It's going to be a hard sell from the get go because of the fact all the games will come to devices everyone already owns, because of said small install base making it impossible to profit from.
I don't even think you are grasping the situation, or what I even brought up. You specifically mention a "microscopic install base" but what if a
microscopic install base is their goal? How is that failure? They aren't competing with big business.
Let's work this out as a logic problem.
From Jaeger:
If (A) the games can't be profitable because of the microscopic install base, then (B) it isn't going to get new games.
A= microscopic install base makes it unprofitable
B= it isn't going to get new games
From Hero_of_the_Day:
what if a microscopic install base is their goal?
Well then, to answer your question using simple if A then B logic, that means this console isn't going to get new games with a microscopic install base. I feel a console has died when it doesn't get new games, that's where it might fail.
And yes, we know they're not going after the big three, that's a given. When people are talking about this console failing they're describing the multiple ways this idea can sink either before or after it goes into production [
if it makes it that far]. There are examples out there.
Take this one, it was a kickstarter for a $69 iPhone 4 controller. Not a game console, just a controller. What happened? They ordered most of the parts, then figured out their logistics weren't going to work, cancelled the project and now have to deal with trying to give refunds.
There are multiple ways that this project can fail. I'll still be surprised if this can make its Kickstarter goal. I know there are some of you out there that are passionate about wanting to collect for a neo-90's game console. I just don't think it'll be enough to reach the Kickstarter goal. But that's just me and how I read the market.