Does the new tv not fit in the other spot?

I am a little confused as to what is where? If it fits, i believe the other entertainment system would be more useful.

I am not normally in favor of sectionals. but if it is comfortable, and it looks that way, why not get max usage while the children are young? How about a pillow refresh?

I think you could also do with some rugs? I know you have carpeting but, it could also help control the ever spreading toys, ah I remember those days well! You know, everything for this area must stay on this rug.

Maybe a curtain update, what colors do you like? style?

You need to define your areas. Fortunately you have a really large space to do it all. Do you like your sectional? Then keep it so the kids can have a bit more freedom than they would on a brand new one. As mentioned above, hold on to it until the kids are a bit older. Looks like you have an art corner. Add a little table and chairs so the kids can do creative art projects there. That will help keep art supplies more organized. Move the two white entertainment towers on either side of the big TV. That will free up that wall for the large toys ( playhouse?) rocking horse etc. on that wall. Move the smaller TV onto the horizontal shelve below the windows. Looks like that window is unfinished? Add some wooden blinds on that window.

For years, my hubby and i have kept a large old tv under the new one for playing games, would that work for you?

i saw your preference for that in your idea book. But the sectional is tan, correct? and children do love color. in this room maybe a little more color might be good?