This story was written by Joseph Tartakoff.
In the console wars, Microsoft (NSDQ: MSFT) has apparently scored a win. In announcing an update to its Xbox Live online service, which features Netflix (NSDQ: NFLX) streaming, Microsoft described its relationship with Netflix as “exclusive” and said the “Xbox 360 will be the only game console to offer this movie-watching experience.” There had been rampant rumors that Sony (NYSE: SNE) and Nintendo were both considering bringing Netflix streaming in some way to their own consoles (Via Engadget).
Microsoft has used Xbox Live as a way to differentiate its console from its competitors—and Netflix streaming has been one of its most popular features (Microsoft says that the Netflix application has been downloaded more than one million times since its debut on the Xbox 360 in November). At the E3 gaming conference this year, Microsoft announced it would bring even more digital content to Xbox Live, including music from Last.fm as well as streams from Twitter and Facebook. Those features will debut this fall.
The update Microsoft announced Tuesday lets users download full Xbox 360 games onto their consoles and also allows members to watch Netflix movies simultaneously with friends (See full details here).
It’s unclear whether Microsoft paid to make its relationship with Netflix exclusive—or what the terms of its previous relationship with Netflix were. A Microsoft spokeswoman said,“We dont discuss the terms of our partnerships, so youll have to contact Netflix for any questions about its business strategy. With the ability to update your instant Queue right from your television, and support for unique Xbox LIVE Movie Parties, Xbox 360 offers a custom Netflix experience that simply cant be found anywhere else.” The partnership has been widely considered be a win-win for both companies—and it’s viewed as a significant driver of both Netflix and Xbox Live subscriptions.
By Joseph Tartakoff