Geogirl brings up a good point -- If this is your staged house, get it on the market already! It's clean, fresh, decluttered, and very attractive. Since it is the staged house, clear out the TV & cabinet altogether and don't worry about orienting the seating towards watching a TV that isn't there. Your first photo is VERY attractive, making the room look spacious, welcoming and bright. I WOULD like to see a kimono on the wall there, and think it would be the perfect accent to your Asian-themed room. All it would take is a nice curtain pole and a few screws, and the wall would be visually filled in a beautiful, elegant way. I even have a few kimono I'd be happy to lend you that I bought on eBay over the years -- very attractive, but not expensive, and not heirlooms, so no worries. (I have a bit of a kimono thing.) If that sounds appealing to you, just email me privately through GWeb and I'll ship 'em out. You'll have them in a few days. But above all - get that pretty house on the market! ;-)

is that the dining area or is the dining on the other side of the kitchen? If dining area you could do a large seating bench for your table with storage underneath- make it cozy w pillows etc- would not cost allot to make. If its you LR/FM you could do a bar area with a wine bar etc. Hard to tell without understanding overall layout

I would not put the TV above the fireplace. The fireplace is small and I think the TV will dwarf it. I do think that the mantel should be lowered or maybe removed. It looks way too high, like it was a later add-on by someone without a good eye for proportion and scale. If it makes sense for your TV to be on that side of the room, I don't see a problem putting it to the left of the fireplace. It's hard to judge whether that is optimal without seeing more of the room. Your furniture seems awkwardly placed, especially the sofa. If you post more pictures and ideally a floor plan with dimensions, you will get some good suggestions on furniture layouts. I would think that the sofa would work better floated in the room rather than pushed up against the wall.

You had a lot of wasted space the other way as well, truly you should add a chair to the other side. Because this looks amazing. you could make the chaise side longer now. The arcade games feel like part of the flow rather than baby in the corner. the room is rounded out. Dont be discouraged. lets see what some others think, i think its a vast improvement and seems much more cozy and inviting than before.