To allow real-time feed crossbarring like that, you'd be looking for an HDMI matrix switch... and not a cheap $200-400 one, either. It'd have to hold EDID and not disturb outputs that aren't being switched. I have a 4x2 and both flicker any time I switch either output... you'd probably want a 4x4 (minimum) plus local HDMI splitters so you wouldn't have to run an HDMI cable back to each TV from the matrix. Also test to make sure the splitters won't freak out if you're hooking one side into a matrix; I have one that sometimes blackscreens if it's connected or disconnected (eg: switched to/from by the matrix) without turning off the power to it first.
PCIe, multiple capture cards are the way you'll probably want to go. AverMedia C985s should be pretty cost-effective at about $120 each, and capture both audio and video together. You'd need one per player though to switch in-software.
You can take a look at other options like the Datapath Vision-e2s, which will get you two inputs per PCIe card, but don't capture embedded audio, so would need to run each through an HDMI->RCA breakout and into a mixer, and unmute the right channel for each one.
All in all? Depending on how many players you want to be able to spectate determines how expensive things will become.
My advice:
- (2) Yuan SC-512 PCIe capture cards ($200 ea, SabrePC, will record up to 1080p@60fps, with embedded audio)
- (1) HDMI Matrix 2x6 minimum ($200-20000, depending on quality)
- (?) HDMI splitters ($20 ea, one per console-station)
- (?) EDID Spoofers ($60-80 ea, one per splitter, only needed if the splitters flicker on source change on the matrix; I use a Gefen HDMI Detective)
This will allow you to have two scenes, each feeding from one capture card. You can switch between players on the non-active cap card before switching scenes, to keep the smooth fade effect/avoid the hard-cut and renegotiation on the cap card reconnecting to each source. The EDID spoofer will protect your splitters from 'seeing' that they've ever been disconnected, and should avoid any technical problems or blackouts (especially important given that it's a tournament).
Total price, around $1200 in hardware, give or take. $600-700 for the core switching setup, plus $80-100 per-seat for the no-glitches-guaranteed route, including a couple bucks to cable each setup (one from console-splitter, one splitter-TV, one splitter-EDID_Spoof, one Spoof-Matrix) assuming you grab these in bulk from Amazon, with some spares in case of DOA or attendee damage. Likely will also want a 4x6 matrix with a local TV hooked up to one of the extra outputs, so you can easily find the right input before switching the non-active card over to it... avoid wrong-feed problems more easily like that.
Doing everything in software with all feeds always-active will require a LOT more capture cards (and therefore expense), one for each seat. You'll also be limited by the number of PCIe slots in your streaming machine, and possibly have audio re-sync issues to worry about with the Datapath dual-channel cards if you want to double up.
So yeah, the question is less 'can it be done?' and more 'what is your desired scope and budget?'.
(edit)
Could also probably go with a bunch of USB 3.0 devices like the XCAPTURE-1 or Extremecap U3, though you wouldn't be able to hook them up to hubs thanks to the bandwidth concerns. Would probably be simpler, just buy an Extremecap and a non-spoof splitter, and keep the cap devices on the same table as your casting rig. Raises the price to around $240/seat, and adds the potential compatibility problems of USB 3.0 into the mix, along with the Extremecap's known finicky glitches.