Over the Christmas holidays I bought LEGO Indiana Jones for 5 bucks and it has provided HOURS of entertainment for my two kids. Meanwhile we borrowed a Wii from friends and after plugging it in and setting it up they played for a bit and then wanted to play LEGO Indiana Jones on the PC yet again.
With 2 USB controllers + some software to make them compatible with the PC Games it's soooo cheap to have my kids (and myself thanks to Humble Bundle sales and Steam Sales) gaming.
The same PC that acts as my Media Centre for all of my movies/tv shows as well. Total cost for cable is under 10 bucks/month because of a Netflix account (that we probably don't need but have anyways) + the cost of internet. We have yet to find a movie or television series that we can't find for free through streaming using an XBMC setup.
For gaming and all of my music/media needs the PC kills what I had setup with an XBox 360 for a fraction of the price overall. If I was a hardcore gamer who wanted to run everything at the highest graphic settings it might not work quite as well, but I have yet to have issues there with my homemade setup.