Sega will make profit on the original sale of the console just as nintendo did with the Wii. They could easily release older games for it.
Don't they need some kind of gimmick that opens it up to "casual gamers" to grab sales like Nintendo did with the Wii and DS? No matter what old games they bundle with it, it's unlikely going to grab the interest of everyone to pull off that kind of sales.
The point I am getting across is that there are thousands of people out there that would write games for it, and why pirate it if the majority of games are fan based games or mods of other games.
Again, the whole hosting issue here. Who's going to host all these games? You say not Sega so that they save money, so who then?
Where's the profit in it for 3rd parties to make it worth their while? Obvious answer would be stick ads in the games. No thanks. I'd rather pay for a game then suffer ads. And if there produce a paid for versions without ads they'd be pirated.
Along with this comes the quality control... Are you just going to let everything be released without censorship?
90% of good games and programs would be missed or drowned out in the sea of other crap out there. Even with censor ship there'd be tons of crap titles. Ever looked at the iPhone app store?
Game developerers are interested in the newest systems only, the PS3 and 360, they want to make shiny pretty games and the majority of them are rubbish. Most wanna-ba games developers can't afford the kit and licences needed to develop for these consoles. If someone came along and offered them a cheap solution to get their games made and out there I imagine many would jump at the chance. Not to mention, Sega can not compete with sony or microsoft.
If the community development side takes off there will be no need for Sega to really bother with any other games.
This idea has been around for a long time
Ever heard of
Net Yaroze or
XNA? More than affordable for a "Wannabe Developer" if they're serious about it.
Better still, why not go and develop some indie games for the PC, that's free!
There's hundreds of games from small developers on steam, and from other sources.
Some of the houses that produce good ones get noticed, and get funding allowing them to spread further.
Ever heard of a PopCap Games?

They started off tiny, and have got loads of games on XBLA and steam now.
They've got a little casual title called Bejeweled, 25 million units across all platforms now I believe.

And a lot of their other stuff is selling by the boat load too.
It's nice to see some ideas bounced round, but I just can't see any thought put into yours at the moment.

I think you're trying to solve a problem that doesn't exist.
