What you are seeing in the picture above is not Photoshopped and is not an optical illusion. The Ouya game console *is* actually smaller than the handheld controller that works with it.
The Ouya was thought of and developed by Julie Uhrman who has a lot of experience in the wold of video games. She and her team took the idea, still in its infancy, to Kickstarter this past summer. When they were done with their Kickstarter fund raising, the company had raised $8.5 million. The device uses Android as its operating system.
The consoles are being delivered in a couple of different versions. The one currently shipping is the Developer Model which cost $699. However, this model is designed to be taken apart to give developers access to the internal workings of the device. The Developer Model, as the name suggests, is for people who want to learn as much about the device as possible so that they can create games for the Ouya which can then be sold to end users.
The second version is the actual consumer version which is slated to cost $95. This final consumer version of the product is expected to ship in April. If you'd like to pre-order one and be the envy of your friends, the company is currently taking orders.
As game consoles have grown in size over the years, it's pretty cool to see a company actually create a device that is tiny. I'm going to be following these guys closely to see how they do.