I don't think this device and a Steam Machine (just a PC with a badge on it) will be in the same realm of competition. This would most likely compete with the Ouya, where the Steam Machine would compete with the 5th gen consoles.

> it'll be interesting to see if they can compete with Steam Machine

Of course not. Different market - Steam Machine will be an expensive flagship hardcore gamer device, while this is firmly casual.

The better question is whether gaming on this device can compete with a VitaStation or an Ouya... or even a Wii-U.

FireTV is built on Android and has a real controller for gaming. It won't compete with Steam Machines for high-end games but there's certainly enough hardware to pull off some great games and apps.

Well this is running android and Steam Machine is running full fledged linux(debian?). Comparing a set top box to a personal computer isn't really fair.