So, link first, then my two cents:
The TL;DR version:
Basically Newell is saying that the way Microsoft is closing off the operating system will be disastrous for many OEMs, as well as for services like Steam. Also, this is a main reason why Valve has started embracing Linux.
Anyways, while Newell's remarks sound much like his ignorant words regarding the PS3 a few years ago, and I think he is exaggerating regarding what the OS's effect on the industry will be, I think he does have somewhat of a point. Microsoft has demonstrated that they have no fucking clue how to effectively compete in the digital distribution market. Their incompetence with XBLA, Games on Demand, and GFWL serve as proof of this. I don't think its beneath Microsoft to just close off the system completely and force everyone to use some sort of integrated GFWL in their next operating system. And before anyone accuses me of hating on Microsoft, I'm not saying it will definitely happen, I'm saying that it isn't an impossibility. Microsoft has fully demonstrated in the past (multiple times I might add) just how anti-consumer it can be, and once you get stung by those practices, it hard to forget it.