Wednesday, February 09, 2011

PS3, Xbox 360 Pose a 'Larger Threat' to TV Service Providers

It's been said that both Microsoft and Sony are in the console space not just for games, but to take over the entire living room. With increasing penetration of broadband and more people connecting consoles to the Internet, both companies are getting closer to that goal. A new Parks Associates report found that 64% of U.S. broadband households with an Internet-connectable game console have it hooked up to the Internet, which represents a sizable change from 2007, when only 25% had their next-gen console connected.

"Multimedia content, such as Netflix streaming services, and popular games with online components, such as Call of Duty and Madden NFL, are driving households to connect their game consoles and creating a new foundation for future growth in online video," the market research firm noted.

Not surprisingly, the high-definition consoles are leading in this category while fewer Wii owners both connecting to the Internet. "PlayStation 3 and Xbox 360 have higher connectivity rates among the current generation of consoles, showing the power of multimedia offerings and popular game franchises in getting gamers online," said Pietro Macchiarella, Research Analyst, Parks Associates. "Despite the Wii's built-in wireless capabilities, it has been less successful in getting users online due to less compelling online games and multimedia content. However, with its large installed base, it still is a significant player in this market."

Parks Associates is forecasting that households will connect more than 260 million game consoles worldwide to the Internet by 2015, and these consoles are becoming total entertainment hubs, which means TV service providers better start paying attention to the trend.

"Location and high penetration of game consoles make them ideal devices for distributing digital content," added Macchiarella. "Our Digital Media Evolution II found 65% of U.S. broadband households with a game console have it in their living rooms, where they loathe adding another black box. Therefore, consoles are the perfect Trojan horses in the competition for content distribution. There have been recent speculations Microsoft wants to create a new TV service on Xbox 360 by aggregating content from multiple sources. While these are still rumors, the reality is that the aggregation of premium content on consoles has already been happening for some time and is posing a larger threat to TV service providers."

From the article "PS3, Xbox 360 Pose a 'Larger Threat' to TV Service Providers" by James Brightman


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