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Microsoft and Sony Were Right: Game Consoles Are the Future of Entertainment

If streaming video is an indication of the future of consumer entertainment, then Microsoft (MSFT) and Sony (SNE) were right all along in focusing on the game console. According to recent studies by ABI Research, devices like the Xbox 360 and Playstation 3 are the most popular options for watching online programming from Netflix (NFLX).

According to an email sent by ABI, a survey showed that game console users watched between 7 and 8 hours of online video every week on these devices, versus those using set-top boxes, Internet TVs, and connected Blu-ray players with integrated streaming features. And that's got potential ramifications for who could end up on top in streaming video and control consumer electronics in the living room.

ABI specifically looked at consumer electronics devices connected to home networks, so clearly the impact of video on mobile devices out of the home isn't represented. Here's a chart of the ones they considered and their relative presence:

Clearly some categories of devices, such as media tablets and Internet-connected televisions, are growing. But for the time being, game consoles are far more important for streaming video than even laptops and desktop computers, even though there are many more PCs than consoles.

Part of that may generational. Console users will skew younger and many probably use a console as a way of watching their choice in video without having to negotiate with parents. Still, the devices have to become an important part of a streaming video strategy. Companies that figure they can just deal with Netflix -- or even Apple (AAPL) or Google (GOOG) -- make the mistake of focusing on the channel of delivery, not on the heavy consumer who makes the choice of what to watch.

One additional point: 7 to 8 hours a week? Streaming video has a way to go before it clobbers regular TV, given that average time on the tube is 30 hours a week. Still, that's a significant chunk that's moved off cable, satellite, and broadcast. (Unless it's additional, in which case someone has to tell these people to get out of the house more often.)


Image: Netflix
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