An AppleTV currently costs $229. A Sony PS3 is $350. An Xbox 360 Elite is $280. A Nintendo Wii is $200. Windows Media Center Extenders are priced all over the place, and the Boxee Box hasn't been priced yet.

On the high end, the incremental value you get out of the PS3 or the Xbox makes it hard to justify the AppleTV. On the low end, I'd be curious if the various Windows Media Center Extender gizmos have gotten much market traction, and whether the Boxee Box will take off.

One thing's certain: if Apple were to build a brand new AppleTV, they'd probably use similar guts to what's in the iPad. I bet that would get their costs down. It would certainly get their power consumption down. And, who knows, maybe they'd come up with a migration path for all the iPhone apps and they could compete with the Wii for the casual gaming market.