Media-Minded: Will Game Consoles Rule the Living Room?

Media-Minded is our column charting how technology’s opportunities and challenges transform traditional media and entertainment, for better or for worse.

Netflix, Hulu Plus, HBO go and several other on-demand video services have found a market of viewers eager to watch their content. most people, however, want to watch on a screen bigger than their laptops or smartphones, paving the way for a new market of digital streaming boxes that connect directly to viewer’s televisions.

Apple TV, Roku and Vizio’s new Stream Player are just a few of the options for users to use digital video services on their televisions. but a funny thing happened as digital video services evolved: video game consoles have emerged as a viable outlet for their distribution, and they could be customers’ best option moving forward.

Microsoft & Sony Ramp up Streaming Video Options

One of the things that will set streaming boxes apart from competition is the selection of content, and the Xbox 360 has a ton of it.

Microsoft has been incredibly hands-on and proactive in bringing video content to its system. In addition to its own video marketplace that allows users to rent both new and cataloged titles, it offers apps for HBO, MLB, TMZ, UFC, NBC Today, YouTube, Hulu Plus, Netflix, Vudu and others. Comcast also has a deal with Microsoft, allowing its customers to access its video-on-demand services through their Xbox 360 consoles.

Several of these apps, like HBO, require subscriptions to the individual services for users to gain access, while others are free downloads from the Microsoft’s app store for customers with an Xbox Live subscription. While much of the content offered on the 360 is found elsewhere, Microsoft hopes to differentiate itself with exclusive arrangements. The company’s deal with Comcast is unique to the Xbox 360 and its ESPN content also cannot be found on competitors’ devices.

Sony’s PlayStation 3 provides similar options for its users. Netflix, Hulu, MLB and Vudu are all present, but the system has its own standouts such as an app for NFL Sunday Ticket subscribers and the Amazon Instant service. Sony is taking on Microsoft head-to-head in the streaming-console market as the two companies fight to offer the most impressive selection of digital video services.

Don’t Get a Cable Box — Get a Xbox

Microsoft and Sony are both in interesting positions with the Xbox 360 and PlayStation 3. The companies designed both consoles from the ground up to play games when they launched them in 2005 and 2006 respectively, but they were in the right place at the right time as digital video services took off, emerging as legitimate streaming options for millions of people who already owned these systems.

As a result, customers can consider what Microsoft and Sony are doing in the digital video space as a test run for even more streaming content on the consoles in the future. Analysts expect both companies to launch the successor to their current generation consoles within the next two years, and they will likely be marketed more as new hubs for all living room entertainment than dedicated systems meant only for gamers.

The current prices of the Xbox 360 and PS3, combined with the fact that they are designed to play games, mean they’re not an option for those looking for only a digital streaming box, even if they do offer access to some of the best content. The Roku and Apple TV can both be purchased for half the price of the consoles. but Microsoft and Sony know the best way to add value to their future-generation consoles is to move beyond gaming and into the areas of entertainment that interest the masses.

New consoles will still be about gaming, but both companies expect to make their systems worth a purchase for those who never plan to play a single game title. Redesigned and easy-to-navigate user interfaces, deals for even more video content and packages that bundle services together are all part of Microsoft and Sony’s plans to completely take over customers’ living rooms and bring their sales to whole new level.

The console makers aim to make their next systems the home entertainment device no one turns off — and if Microsoft and Sony execute their plans properly, users never will.

Media-Minded: Will Game Consoles Rule the Living Room?

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