I agree with your points, especially with respect to games and codecs. Possibly more with
games. The console wars are vicious with all sides trying to shave off whatever costs they can
to maximize both sales and profits. If top-end game engines would run better under Linux,
proprietary possibly custom-modded embedded OS' would be less attractive. They cost money to
maintain, money I'm sure the vendors would prefer to be profit.
That ideally requires Linux to provide even better real-time guarantees, better low-latency
performance at the same time, to have an alternative GUI that has the necessary performance
requirements whilst being highly compact, to have truly hot parallel performance on something
like the Cell processor, to support any weird hardware used on consoles (such as cartridges),
and to have some easy way of porting existing code which, because it won't be inteded to be
portable, will be ugly.
If a distro provider could satisfy even 3 or 4 of those 5 and approached a console vendor with
a sackfull of cash and a viable strategy, Linux would gain more games in a week than it has in
the past 16 years.