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PostPosted: Thu Nov 12, 2009 1:03 am 
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Wall Street Journal wrote:
Beyond Gaming: Watching TV on Your Xbox

By YUKARI IWATANI KANE
* NOVEMBER 12, 2009

Ben Schefers bought his first Microsoft Corp. Xbox 360 console four months ago to play games remotely with his friends. But the 33-year-old database manager now spends more time using it to play movies, television shows and documentaries.

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The new Facebook feature on Microsoft's Xbox 360, part of a push to make game consoles all-in-one devices.

"It's something that my wife and I can both agree on," he says, adding that he plays Xbox 360 games only a few times a week—and often only after his wife is asleep. Each night, he and his wife, who live in Berkeley, Calif., spend an hour or two catching up on TV shows with the console. "It's kind of taken over from our DVD player," says Mr. Schefers.

Videogame consoles like the Xbox 360 and Sony Corp.'s PlayStation 3 were designed primarily to play games, but the gadgets are increasingly evolving into multimedia home-entertainment devices as manufacturers add nongame features.

Last year, Microsoft and Sony began offering console owners video-watching services—Microsoft through a partnership with Netflix Inc. and Sony through its own service. Later this month, Microsoft plans to launch new features on its Xbox Live online service for premium members to stream music from Last.fm Ltd., download high-definition movies from its Zune Marketplace store, and easily access Facebook and Twitter's social-networking sites. Sony, which tried and failed to market the PS3 as an all-in-one entertainment device when it was introduced three years ago, is giving it another go. The company has also begun offering access to Netflix through the PS3.

Microsoft has said that one million of its premium Xbox Live Gold members activated the Netflix application within the first three months of its launch a year ago and watched 1.5 billion minutes of movies and TV episodes. Sony, which lets all users surf the Web and manage digital media such as music and photos through the PS3, says those features have become important factors in purchasing decisions by consumers.

Nintendo Co. has been slower to integrate Internet technology and video-downloading services into its Wii console, though it allows all users to surf the Web, share photos and check out news and weather information. In Japan, the company is experimenting with limited video downloading through the Wii. Many analysts expect Nintendo to also offer streaming video through Netflix in the future. The company declined to comment.

Netflix spokesman Steve Swasey says his company's goal is "to be ubiquitous on any device that you watch movies on."

Waiting It Out

While many game players seem open to the idea of doing more with their consoles, they also say they are still figuring it out. Ruven Chu, a 22-year-old Stanford University graduate student and Xbox 360 owner in Palo Alto, Calif., says he is interested in trying the console's Facebook and Twitter features. But he expects them to be integrated into the videogame experience in a way that's not possible through his PC—allowing users to find friends on Facebook that they can play games with, for example. "I think it all depends on how it's been implemented," he says.

Console prices have fallen dramatically, providing an added incentive for consumers. An entry-level Xbox 360, for example, now starts at $199.99, down from $299.99 four years ago. Sony's PS3 starts at $299 for a model with a 120-gigabyte hard drive and a Blu-ray player and Wi-Fi wireless connectivity. In 2006, a model with a 20-gigabyte hard drive debuted for $499.

To stream movies and access other media content, console makers have created miniature keyboards that can be attached to the game controllers. Consumers can also type Web addresses and text messages by hooking up a computer keyboard to the console or punching in letters on a virtual keyboard on the screen.

Companies such as Intel Corp. and Apple Inc. have spent years trying to come up with a product that brings the Internet into the living room. Many of the devices have been slow to take hold because they were awkward to use and had little attractive content available. They also required the purchase of additional devices.

Now, as technology has advanced and more content has come online, more device makers are vying to be the top living-room gadget. Research firm iSuppli Corp. estimates there are over 50 Internet-enabled TV models from the top five manufacturers on sale now, more than double the number last year. Blu-ray players from companies like LG Electronics Inc. and Samsung Electronics Co. let people stream video from Netflix. And Apple, TiVo Inc., Digeo Inc. and Roku Inc. make specialized set-top boxes that people can use to download or stream TV shows and movies over the Internet, as well as manage other content such as music or photos.

Go-To Devices

For many consumers, though, videogame consoles appear to be the go-to living-room device—particularly for those who already own one of them. Microsoft, Sony and Nintendo have already sold over 45 million units collectively, according to the companies. That compares with the 5.3 million networked TVs, Blu-ray players and set-top boxes estimated to be sold by the end of this year, according to consulting firm Envisioneering Group.

"Active game consoles have a lot of momentum because they're already attached to televisions," says Envisioneering analyst Richard Doherty. "They are a part of the family."

Analysts also say that part of the reason why consoles have become such a popular way of viewing streaming video from the Internet is that cable and satellite companies have been slow to embrace such services.

Fred Potter, a 27-year-old software developer in Los Altos, Calif., splits most of his TV viewing between Netflix on his Xbox 360 and the Hulu streaming video service on his laptop computer. "The only thing we use basic cable for is for watching shows the day they air," he says.

Write to Yukari Iwatani Kane at yukari.iwatani@wsj.com

http://online.wsj.com/article/SB1000142 ... lenews_wsj

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