Apple's Game Console will Change the Living Room

Well the problem is Battery. Since you are using the processing power directly on your Phone. It will required to be constantly charging. And this means if this was used for serious gaming the battery will use up all its recharge cycle much quicker then used otherwise.

AirPlay needs more work and my guess is that a 5Ghz only, Less interfered, Beam Forming mandatory, WiFi standard is required. Hence 802.11ac. Although i believe the Wifi lantency doesn't matter much if the developer had the intention of developing their games for AppleTV play they will have to use some tricks to minimize those Latency.