"If PCs can do gaming better, why do home consoles exist?"

Because the average population of the human race has an IQ of about 100. Consoles specifically target that 100IQ market. You don't see difficult and competitive games on console for that reason.

The console market is dominated by QTE games and linear corridor shooters, as well as endless and boring grinds that amount to absolutely nothing. These games are consistently the top sellers on consoles. The truly interesting and fascinating fall to the wayside, to be replaced by the next entry in the Uncharted, Cowadoody or Gears franchises.

The console player doesn't want to play the "better games" that PC can, they are simply interested in the next distraction.

19, currently studying chemical engineering and im currently midway through 3rd year out of 4. Have a really good paying part time job with lots of side jobs that pay from crap up to stupid good ($250 to accompany someone for their grade 8 sax exam, $250 an hour seriously wtf, I don't really remember too well it could have been more than that) so I don't really have problems affording games right now.

To be honest this announcement just seems silly, does Phil really believe the Scorpio is going to actually be able to output 4K? Maybe on release, but for how long afterwards? Technology is moving at a blinding rate, and I know developers have been dying to make the games they want without hardware restrictions cropping up all the time. I wouldn't be surprised if devs just made games that looked incredible to take advantage of the new console power and then they just ran at 1080P.

Specs are estimated at a GTX980, a card that already struggles to get anything done in 4K these days, and a card that will be another half a year old by the Scorpios expected release date of sometime 2017. If this is true, I don't see Scorpio doing 4K on anything except gimped AAA titles or indie games, but then what is the point? Beyond that it just seems strange that Scorpio wants to compete with something that has been around in the PC market for a while, with a feature that really only appeals to that particular audience. People who want 4K are just going to buy a good PC, they don't buy consoles for the graphical fidelity, they buy them because they are cheap and easy and good enough for the average gamer. The more serious gamer will turn to the PC naturally because it just has the better performance, as long as you are willing to put a decent amount of money down, and they won't buy Scorpio unless it is top of the line when it releases, and based on these specs it already isn't.

The final nail in the coffin is the cross platform approach with PC, so people who want to game at the high end the Scorpio is implying it will play at will have no reason not to just get the PC because all the games will run better and practically be the same.

So who does this console appeal to exactly?

If PC sold $100 worth of copies and Consoles sold $1000 worth of copies, what option would you pick?
A - $100
B - $1000
C - $100 + $1000
Assuming that the resources required to port a game to PC is seperate from the resources used elsewhere, there is zero disadvantage to porting a game to PC so long as it profits.

Um, OP never said this was the sample size, he said it was the number he chose to use for the calculations because he believes it is a number that represents the amount of active steam accounts (which he himself admitted was an uncertain number because this number is over a year old). Since steam reached about 8M (https://web.archive.org/web/20150515014514/http://store.steampowered.com/stats) peak concurrent players on May 15th 2015 and that number now peaks at just over 12M (http://store.steampowered.com/stats/) it is likely safe to assume that the steam userbase is growing. Now that number of 125mil active players is based on a steam released statistic around February last year, and OP used this same number as a worst case scenario, assuming Steam did not get or lose any active players. However based on this data I have shown, it is likely that 125mil active players is wrong, instead it is likely that this number is a fair bit higher.

Now I understand your argument is about using this number as a sample size and that his conclusion is just a suggestion. Despite this, can we really argue his numbers could be lower? Mathematically speaking:
1. I just showed that 125mil active players is likely higher
2. A sample size of even 1% of this number is 1.25mil people (steam likely uses a much larger number, but like you said not everyone has to do it). That is a lot of hardware surveys, enough that I would argue that this number can be safely extrapolated to roughly model the hardware data for the active number of steam players

You are correct in saying his numbers aren't fact, but it seems like a silly argument because OP never claimed it was fact, he claimed it was a worst case scenario calculation. From his argument and my argument, I think it is safe to say his numbers are at the very least a worst case scenario, and that the numbers are likely higher than what he gave.

No it isn't and let me tell you why.

Nintendo EAD and their games are a cultural phenomenon. They are basically responsible for the rise of Mario and Zelda, the former of who could be considered the most popular gaming icon today and has the best selling gaming franchise in the world.
Let's not forget the big gaming crash in 1983, caused by saturation of the console market and a flood of cheap, crap games. The gaming market could have been completely destroyed, if it weren't for Nintendo and the NES (basically the only console at the time next to Segas Master System, which was completely dwarfed by the NES), and the games created by NEAD that saved it, such as the original Super Mario Bros and Zelda 2: The Adventure of Link. Later came the SNES, which some would consider the most legendary home console ever.

But Nintendo EAD themselves are a large driving factor because even though they weren't responsible for the consoles themselves, they were responsible for the best games that appeared on them. Some of these include:
Ocarina of time - The highest rated video game ever made. A game so timeless that its remake 13 years later on the 3DS remains the highest rated video game ever made on that system.
Super Mario Galaxy 1 - The 6th highest rated video game ever made. Its sequel, SMG2, also made by Nintendo EAD, is the 7th highest rated video game ever made

Following this, we have Twilight Princess, Wind Waker, Link to the past and Majoras Mask. The only game made by Naughty dog that comes before any of these is Uncharted 2, with The Last of Us sitting just below Majoras Mask. We have 7 extremely highly rated classics vs 1 maybe 2. It isn't even a competition.

But these games carry a legacy that will likely span many more years. In 5 years, when no Uncharted game has come out after the 4th installment, nobody is going to remember Nathan Drake. Mario is still going extremely strong after 30+ years, Uncharted lasted 9 and won't have any more games. Nintendo EAD create games that have legacies extending into the realms of art. I have gone to schools and some have assignments in music that are based around analyzing the music found in EAD games. These are games that extend beyond the present, I mean who even compares games to the first Uncharted anymore? What about the second? These games are already forgotten. Orcarina of Time is still referenced and relevant today, evidenced by the fact that its remake is the top game on the 3DS. Games like Super Mario bros are achievements in game design, level 1-1 itself is a cultural icon, and the game still sees things like speedruns even today. You could ask some random on the street to hum the mario theme (the music that plays in the previously mentioned 1-1) to you and I believe they will be able to. Ask someone to hum the Zelda theme, I reckon a good number of people know that too. Now who here, without googling, can hum the theme to uncharted 1? Anyone?

To put it simply, Nintendo EAD are on a whole other level to Naughty Dog. ND don't even come close to the legacy NEAD has made.

Valve single-handedly took a platform and turned it into the behemoth it is today. The platform is currently home to the most profitable game in the world, among with many other top sellers. They also completely revolutionized cinematic storytelling and have created some of the highest rated games of all time.

Naughty dog just happens to make a few top games for a single console. Definitely highly rated, but none have really moved any genre or the platform forward in any significant way.

I do not know if you are speaking for yourself or if you live in AUS or not, but as someone who primarily games on PC and lives in AUS, allow me to shed some light on this:

The EB games price compared to the steam price after conversion is seemingly random, and depends on a lot of factors. Because EB sales are far weaker than steam ones, and also because it is easy to find small discounts for new releases from 3rd party sellers, EB is generally not the place to go to buy PC games. However, if there truly is no sale on any particular game online, then EB will often have a price that is ever so slightly better (an improvement that honestly is irrelevant if you consider fuel costs). However, sometimes it works heavily in EB's favor, for example Total War Attila was going for 50AUS dollars at EB, which matched the US price on steam (50USD, currently about 65AUS) which meant EB had the better deal by far. This however is rare, and usually PC games are marked up as one would expect from a physical product that is imported (XCOM2 is currently going for about 90AUS in pretty much every store that sells it).

There are only 3 reasons I would consider going for a physical PC product in Australia:
1 - If we have an Attila case, where the game is not marked up from the Steam price, and therefore is a far better deal. This is rare in my experience
2 - To get around the big download sizes of games, because Australian internet is generally slower than the rest of the world (I average about 1.2-1.4MB/s)
3 - Physical deluxe editions that come with stuff you obviously can't get when buying digitally

I don't understand how this game is underrated in anyway. GS gave it an 8 which is a great rating.

As others have said, there are so many but here is a list of the ones I have played that really didn't get enough attention (I will leave out visual novels because every single one is underrated):

- Puzzle Quest: An excellent bejewled like game with RPG leveling/progression. Extremely fun, the first game takes around 40 hours supposedly, but I never beat it. Others have said to stay clear of the others in the series because this one is the best one.

- Trauma center series: A common theme with Atlus is having underrated games, however this one went under the radar even for them. The only game I know of that captures the intensity and pressure of being a surgeon, very few games have made me pause and freak out due to being overwhelmed, and makes me admire those who do it in the real world just a little bit (especially since real life is more complicated).

- Might and Magic Clash of Heroes: A puzzle like RPG from the Might and Magic series. Has its flaws and quirks, but manages to entertain nonetheless. Definitely should have rated higher than it did.

- Meteos: Yet another puzzle like game that could have seriously benefited from a PC release with ranked online matchmaking, instead of being left on the DS and fading into obscurity.

- Puzzle Pirates: What is it with puzzle games being underrated anyway? This one had its hayday, but sadly has become a shadow of its former self. I would describe it as Eve Online with an actual game behind it. One of the few MMOs I know where a player can be better than someone else on Day 1 because they are skilled at the puzzles and not because they grinded for days on end.

- Scrolls: So underrated that it is going to be shut down later this year, and people still thought it was in beta when the shutdown was announced. A game by Mojang, who you would least expect to make something that just dies in a years time. It is a card game that uses the cards to summon creatures onto a tactical board, where they will fight and attempt to destroy the totems on the opponents side of the board. An interesting experience

- Infinity Wars: Another underrated card game that is currently looking at reviving its playerbase. A bit more traditional in its roots, but has a complexity and depth that beats out Hearthstone, and has some ideas that set it apart from the others. IMO this is the game that should have overtaken Hearthstone in its popularity.

- AI war fleet command: Basically the best RTS ever made. Anyone who tells you otherwise is ignorant and very likely hasn't played the game, or lacks the patience and brains to do so.

- Spacechem/Infinifactory/TIS100: The trio of games by Zachtronics, the guys who have been quoted to be a direct inspiration to Minecraft. Puzzle like games about optimization, and also noted for being difficult to the point where most will be unable to finish them. They all play differently, and they are all underrated.

- Puzzle Series 5 Slitherlink: A game that never saw an official English release, due to its lack of popularity, but is widely regarded to be the best puzzle game ever made by those who have played it. It didn't click with me as much as I would like, but the playtime on this thing is easily in the tens (probably hundreds) of hours. Very good regardless.