Pardon my skepticism.
Notice how Gabe is talking about how Apple is a threat not to consoles, but to PCs moving into the living room (i.e. his company's plans). To people who don't know the industry well, this might not be easily differentiable, but the reality is that the two come from fundamentally different lineages.
The thing that sells gaming platforms is not "natural progression into the living room", not an "upgrade cycle", not "development tools". It's the games.
If Apple takes a similar approach to living-room gaming as they took to the iPhone, with an open development platform, or an "Apple TV" that plays games, but is not primarily focused on games, you'll see roughly the same quality of games come out there as on the iPhone. And notice how no iPhone apps sell for more than 99¢ these days.
Apple has no history of game development. It's not a part of their DNA. And the gaming industry is a difficult business to succeed in. So to take any other approach would be monumentally difficult for them.
The biggest threat to console gaming is not Apple. It's the consoles themselves.
Consider the case of the iPhone vs. handheld consoles. The iPhone was released in the heyday of the Nintendo DS. The DS sold like hotcakes throughout its lifecycle, and didn't slow down at all even as the iPhone's app store exploded onto the scene.
It was only once the 3DS came out that handeld consoles started to have difficulties. Of course now everyone starts blaming smartphones for taking the market away from them, but look at the console: it has a lineup of games that's mediocre at best, it focused on 3D features that nobody cares about, it had hardware flaws like a terrible battery life, and it was very expensive at launch. No wonder it disappointed.
If consoles end up failing, they will fail on their own merits. It won't be because of an app store.