In the recessionary spirit, I’ve been thinking through all the ways to get video to the living room and trying to decide which ones are the most economical. The Netflix/Roku box, at $99, is a solid option that performed well in my report at Forrester, but it’s only a piece of the home entertainment puzzle.
Enter the videogame console. This is a trojan horse — in theory, these gaming systems end up in millions of homes and then one day, people wake up and find that they can also use them to watch DVDs or Blu-ray discs, and that they can download or stream video. Cool, right?
Could be, but isn’t yet. I recently spoke on a panel with the head of home video for Warner Brothers who shared research with the audience about how Blu-ray disc purchases (or attach rate if you want to be nerdy) for people with standalone Blu-ray players are twice as high as they are for PS3 owners. In other words, people with a PS3 are only half as into the Blu-ray player they have compared to other Blu-ray owners.
The point I’m making is that videogame consoles are game machines. Period. All the other stuff has yet to catch on. Yet. What will it take to change that?
I recently sat down with Shane Kim, Corporate Vice President, Strategy for IEB at Microsoft to talk about the Xbox 360’s upcoming UI refresh, slated to hit November 19. Together with Christina DeRosa, General Manager, Xbox LIVE Marketplace, the two answered some of my questions about the future of video in the Xbox 360 world. Here’s what I learned:
- Roughly 14 million Xbox 360 users are Xbox LIVE members, 30% of whom have downloaded or streamed video, whether for free or pay.
That’s a good number — it means nearly 5 million people, far more than have an AppleTV or even a TiVo. My assumption, which I shared with them is that those 30% will spend no more than a third of their time and energy on video vs. gaming in Xbox live. Like good soldiers, they would neither confirm nor deny my assumption, but that means at most, 10% of content flowing over the net to the Xbox is video related.
- The entire online revenue for Xbox LIVE, including Xbox LIVE Marketplace, has topped $1 billion since its inception.
Apply my maximum of 10% to that $1 billion and it suggests a ceiling of $100 million in downloads and rentals sold via the Xbox 360. This is complete back-o-the-napkin modeling so don’t hold me (or them) to it. This makes Xbox the #2 digital download store next to Apple iTunes, though the Jobster has a comfortable lead if my estimate is close.
I’ve watched video on my Xbox 360, spending time with the HD version of Hunt for Red October. (A classic, btw, I always live for the moment where the Russian dialogue changes to English on the word, “Armageddon.” Powerful.) But I haven’t done so recently. (The house is in the middle of a remodel so I haven’t done the Netflix/Xbox 360 thing yet, but when I do I’ll blog about it.)
Tell me what you think: have you watched video on the Xbox 360 or on the more recently video-enabled Sony PS3? If so, what do you think? If not, why not and would you ever?