To publish, yes. Though you could just use it to make games that have a home on console hardware and played whereever you physically bring it yourself. Not as appealing as sharing it with a community of gamers though. It's actually very easy to develop on. Install the USB drivers and you can compile right to it from Oxygene or whatever other development tools you use just like you can with an Android tablet or phone. You can even "sideload" the apk "bundles" as an alternate means of getting your game on the platform for testing.
Java actually isn't that bad anymore. I used to hate it, but seeing how it's used these days I'm much more impressed with what you can do. Especially on the OUYA's Tegra 3!
Because it's a tablet hooked up to a TV running tablet games on a TV. It's not a game console running console games on it.
OUYA isn't just another Android device, it's a game console for indies and gamers who like those games with an intergrated store front. It just uses Android as it's engine.
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