The New York Times put out an interesting article about the future of Xbox Live today. With 20 million active subscribers, Xbox live is, in size, very similar to a cable television network. Microsoft believes that there is a potential for them to make a tidy profit by expanding the amount of media customers are capable of accessing from their console.
Today, things like Facebook access and Netflix streaming are still on the periphery of console services. Most people use their consoles for gaming most of the time. However, that is beginning to change. Consoles are turning into more connected devices, and Microsoft foresees them morphing into entertainment hubs that blur the lines between TVs, PCs and consoles.
Xbox already has its first live game show; "1 vs. 100", and more interactive virtual shows like it are on the docket. Microsoft is deep in the middle of talks with Disney and ESPN to add in more content. Live streams of sports games, access to more TV and movie content, and an expanded variety of interactive games could all be coming in the near future.
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60% of American homes have gaming consoles, and that number is only going to rise. The success of DVRs and the surge in popularity of media box set-ups are just harbingers. People want to be more connected and they want to have the widest choice possible. The manufacturers who can deliver that are the ones who will come through the next evolution of the Console Wars intact.