I think Nintendo's counting on the ridiculously low price to deter thieves and pirates. If you can buy a game for $5 why would you try and put effort into copying it? This is a great idea, something that all manufacturers should investigate for their old hardware.
AS for modding it, I don't see any chroma encoder inside which might leave access to RGB signals. (Actually I don't see any sign of the video output, lik-sang only showed the business side of the PCB). And what about 2-player games?
I'm surprised tho Nintendo's giving up their branding entirely, settling for a gold seal on the box and no other recognition. THere's no Nintendo mention on the PCB, chips, or controller or labels. It seems more like a Chinese co licensed the Nintendo IP than Nintendo themselves making any kind of push. And still no pics of the real kiosk? What's with that?
I'm not excited about this console, because it's merely an N64, a console with the lowest ratio of quality games since the 3DO. I am, however, excited about the prospect of Nintendo quality applied to cheap, 'throwaway' 2D titles that may be released to prop up the library between relaunches. IF they start digging out the archives to provide unique content it might quickly become a must-have.