First Thoughts on Xbox NetFlix Streaming, Other Xbox 360 News from E3

At Microsoft’s E3 event today, they finally made official the Netflix streaming service that has been rumored for months. This looks like a in-dash implementation that doesn’t rely on Media Center’s Online content, which is a good thing given how clunky Microsoft online offerings have been through Media Center. The service will offer the same movie library that consumers of Netflix get through the Netflix offering, which is about 10% of their total movie library. Like with all of these services, there is a big contractual overhang issue from studios and their agreements with other streaming services, DVD windows and other windows such as the VOD and those signed with HBO and Showtime.

That being said, its a good step. I think Netflix continues to push their service onto more platforms, which will likely help set them up as a viable option for some for their first online streaming service. Of all the stream-to-TV services, the video game-centric ones are likely going to be the first to be widely used, perhaps even moreso than Apple TV, which still has a very small installed base (likely well below 2 million at this point).

As for Microsoft’s other announcements, they also announced a major refresh of their online dashboard, making it very Wii-like with an Avatar-centric approach. There is an increased focus on community as well as more content deals such as that with NBC/Universal. Overall, though, I get the feeling this is a slow-news year for the Xbox 360, and I increasingly see the PS3 nipping at the 360 for installed base. I tend to think the swap-out of the existing 20 GB Xbox 360 models at $349 for a 60 GB model at the same price is not enough to counter the fact the 360 doesn’t have a Blu-ray drive, and their online gaming service is no longer the differentiator it once was. They needed to cut prices across the board, and would be wise to do so before the Christmas season or risk having Sony overtake sometime next year in installed base.

Lastly, I didn’t see anything mentioned about Xbox Live Anywhere. Two years ago Bill Gates made an appearance at E3 and this was their big announcement. Now, for all practical purposes, it seems to be another Microsoft effort that has gone nowhere.

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Filed in: Content Providers, Industry Buzz, Streaming Media Devices