Thursday, May 13, 2010

Xbox 360, PS3 vie to win digital connected home battle

EL SEGUNDO, USA: While the battle for the connected home has focused mostly on the competition among telco, satellite and cable Set-Top Box (STB) providers, video game consoles quietly have emerged as the largest category of Internet-enabled platforms besides PCs that are competing to dominate the living room, according to iSuppli Corp.

Video game consoles in 2009 represented 52 percent of all living room consumer electronic devices shipped with embedded broadband capability. Handheld video game units came in second at 44 percent of the market.

“Video game consoles continue to evolve past simply being gaming devices,” said Pamela Tufegdzic, analyst for consumer electronics at iSuppli.

“Because of this, game consoles no longer are just competing among themselves. With consoles now allowing for Internet Video-on-Demand (VOD) services to be streamed to televisions, the devices compete not only with STBs providing Internet Protocol Television (IPTV) but also with satellite providers, telcos and cable services. The unique nature of video game consoles could give them a strong chance of winning the battle for the connected home.”

VOD for you and me
Consoles of late have emerged as one of the main platforms for bringing VOD services to the home, rivaling the IPTV and STB segments, iSuppli believes. Video game consoles deliver Internet TV services such as Roku, Boxee and ZillionTV to users.

In its latest announcement in April, Sony Corp. said it is launching the MLB.TV service, which is coming to the PS3, for streaming live major league baseball games. Furthermore, VOD service from NBC Universal Inc. and Netflix, which began on Sony’s PlayStation 3 platform as of November 2009, have been brought to the Sony PlayStation Network. For its part, Microsoft Corp.’s Xbox 360 also offers Netflix through its Xbox Live VOD service.

While the primary focus of the Wii from Nintendo Co. Ltd. has been on gaming and does not involve the connected home, iSuppli believes that the next-generation console will start to offer more broadband functionality as Nintendo seeks new ways to generate income.

For the current Wii platform, Nintendo plans to offer Netflix VOD service in the spring of 2010, and the company possibly could team up with Hollywood studios to deliver films and television shows to its catalog. As the dominant video game console, the Wii could bring VOD access to a wide range of new users if it continues to add video services beyond Netflix.

Battling for the crown
LAN connectivity to video game platforms was originally implemented by the gaming community for a variety of uses, ranging from social networking, to online gaming, to content downloads, to game updates. With game consoles being the largest segment among Internet-enabled platforms within the living room, the devices can be considered as true contenders in the battle for control of the digital living room, undoubtedly evolving to include more services beyond game-related content.

For their devices to achieve differentiation from simply being video game consoles, Sony, Microsoft and Nintendo will need to accomplish a number of goals, which include keeping up with digital content trends, continually expanding storage capacity in consoles as well as implementing Digital Video Recording (DVR) capabilities. By doing this, these companies could make game consoles the preferred choice as media centers in the living room.

Source: iSuppli, USA

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