Video Game Consoles Amp Up The Video

Game consoles are continuing their stealthy takeover of the living room. We've been seeing this trend for a while, but the pace is accelerating as the holiday season approaches.

The PlayStation 3 is going Netflix next month. The second console to get the streaming video service, this added functionality should help the PS3 sales for the holiday (which are already predicted to be high due to the lower price point of the PS3 Slim). The solution currently works using a disc shipped out from Netflix, though it's been confirmed that eventually a native client will be released. There are still rumors of a similar disc-based approach coming to the Wii.

The Xbox 360 just saw the release of Sky TV on the system for Sky subscribers in the U.K. This service has one up on the Netflix services already being used by Xbox 360 users in the U.S.: live TV. A number of Sky channels are available for live streaming to the system, including sports. And there's an on-demand content library. The Xbox 360 is also getting 1080p HD streaming for "Zune Marketplace" video content, with a system update coming next month (assuming a download speed of 8Mbps and an HDMI connection). This will apply to purchased and rented content within the video marketplace, and replaces the existing download method.

These trends in the consoles mirror a larger trend among consumer behavior. Streaming of full-length TV or movie content is on the rise in the U.S., increasing by about 100% year to year. For the general population, 26% have streamed a full-length TV episode in the last month (up from 11% eight months prior), and 51% of 18- to 24-year-olds have (up from 26%). These numbers mirror streaming growth reported on Netflix's earnings call this quarter, with 42% of subscribers viewing instant stream content today versus only 22% last year. As the ease of use and quality increase for streaming content to the living room, this behavior will likely continue to spread - and, at least so far, the consoles are sitting at the forefront of this transformation.

Xbox Looks To Have The Jump On Motion

Over the past few weeks Sony and Microsoft have offered new details on who/what will be used to launch their own entrances into the world of motion-controlled games, which has thus far been wholly dominated by the Nintendo Wii.

Judging from the initial list of titles for both Microsoft's Project Natal and Sony's as-yet unnamed motion control wand, Sony is looking to move first-party titles by catering to players who already own a PS3 and the titles that are being upgraded to be motion-control compatible, whereas Microsoft, with its partnership with top publishers like Ubisoft, Activision Blizzard and Sega, is looking to create must-own titles that will move consoles.

In the current environment, Microsoft's strategy is the right one. While the Wii was the only motion-control game in town, Nintendo could get away with having mostly shovelware titles with only a few games worth owning. Now that all the major players are getting involved, the list of motion-control titles offered by each platform really needs to be exceptional, and the third-party publishers Microsoft's lined up looks ready to make that happen.